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Students Lose Financial Aid for Failure to Make Satisfactory Academic Progress

Mark Kantrowitz

August 29, 2011

There is also a loophole in the rules concerning satisfactory academic progress that may allow a student to regain eligibility for financial aid by changing majors or degree programs or by transferring to another college. Depending on the college’s policies, classes that don’t count toward the new major may be excluded from the determination of satisfactory academic progress. This can effectively reset the student’s eligibility for federal student aid.

It is a good idea to start by reading the college’s satisfactory academic progress policy. All colleges are required to have a written satisfactory academic progress policy. The policy may be found on the college’s web site or in the course catalog. The college’s financial aid office can also provide a copy of the policy upon request. The college’s written policy must explain the procedures for regaining eligibility for financial aid and the appeals process.

Can students whose families had a zero EFC still receive financial aid even if they fell below satisfactory academic progress? Are there special entitlements for these kinds of people? I ask, because my family is essentially broke and I fell below SAP by only .007ths of a point. — Julie R.

No. Students lose eligibility for federal student aid if they are no longer maintaining satisfactory academic progress, regardless of financial need. There are no special exceptions to the satisfactory academic progress requirements for low-income students.

This is unfortunate, because low-income students often lack the resources to continue paying for college on their own without financial aid, not even for a semester or two. Low-income students are also unlikely to qualify for private student loans. This contributes to lower college-degree attainment rates by low and moderate income students, as compared with middle and upper income students. Low-income students who get bad grades are about half as likely to graduate with an Associate’s or Bachelor’s degree as upper-income students with bad grades.

Students should always file an appeal if the failure to maintain satisfactory academic progress is due to extenuating circumstances.

If a low-income student cannot afford to pay for tuition without financial aid, the student should ask the college about taking classes at a local community college. If these classes are accepted for credit by the student’s college, it will help the student regain eligibility at much lower cost.

Students who fail to maintain satisfactory academic progress are still eligible for the education tax benefits, such as the Hope Scholarship and Lifetime Learning tax credits. The education tax benefits may be claimed by filing a federal income tax return, based on amounts paid for postsecondary education.


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