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Can a Student be Cut Off from Financial Aid After Taking Too Many Credits?

Mark Kantrowitz

April 30, 2012

I am currently in community college, hoping to transfer to a traditional 4-year college and then proceed to get my masters in teaching. Where my frustration lies is this: I had a different career focus before and was taking classes toward fulfilling that goal. Now my college’s financial aid administrator says that I have taken too many credits at the community college level and will not eligible for any government financial aid until I continue on to a 4-year institution. Is this really true? Is there any way around this? She mentioned maybe trying to enroll into another community college but she wasn’t sure that this would work either. I have never received financial aid in the past; I have simply paid my own way and worked full-time. I need to start going full time and can’t find many options. I received a private student loan last semester but only with a co-signer. My current co-signer will not do so again. — Glenda S.

Continued eligibility for student financial aid requires the student to be making Satisfactory Academic Progress (SAP). By federal law and regulations, college policies for measuring SAP must not only consider the grades earned by the student, but also the pace of progress toward a degree. In particular, the student must be on track to graduate within the maximum timeframe for the degree program. The maximum timeframe is 150% of the normal timeframe for the program, such as 6 years for a 4-year degree and 3 years for a 2-year degree. After violating the 150% maximum timeframe restriction, the student is no longer eligible for federal student aid and often institutional college aid as well.

Students who change majors repeatedly often encounter the maximum timeframe restrictions, especially if few of their previous classes count toward the new major.

One way of working around this problem is to transfer to a different community college. Depending on how many of the previous credits are counted toward the degree program at the new college, the student may be able to reset the maximum timeframe clock.

If a student already has enough credits to obtain an Associate’s degree, the student could graduate with the degree even if it isn’t in the student’s current field of study. This then resets the maximum timeframe clock, allowing the student to pursue a second Associate’s degree in the desired field of study. Eligibility for many forms of student financial aid for an undergraduate education ends when a student obtains his or her first Bachelor’s degree, but there are no similar restrictions on the receipt of multiple Associate’s degrees.

Another solution is to transfer to a 4-year college, if the goal is to ultimately obtain a Bachelor’s degree. The 4-year college will be more expensive than a community college, but perhaps enough of the community college credits will transfer to allow the student to graduate with a Bachelor’s degree in only one or two more years of classes. An in-state public college will be less expensive than most private and out-of-state public colleges.

The ability to reset the clock may become more restricted in the future, as Congress and the US Department of Education seek ways to eliminate waste and abuse. Perpetual students, also known as Pell runners, often enroll in low-cost community colleges in order to maximize the amount of money disbursed after tuition and fees are deducted from the financial aid funds. Pell runners use this money for living expenses without any intention of getting a college degree, treating student aid as a kind of welfare. Often a Pell runner will switch majors or colleges in order to stretch out the eligibility for financial aid. Overall, Pell runners represent a very small percentage of student aid funds, but they are much more prevalent at community colleges. Congress recently reduced the maximum number of semesters of Pell Grant eligibility from 18 to 12 in order to address this form of fraud. But this can also affect genuine students who are having difficulty choosing a field of study.

If at all possible, a student who intends to become a teacher should borrow only federal student loans. Teachers are eligible for a variety of loan forgiveness programs, including public service loan forgiveness. These loan forgiveness programs, however, are available only for federal student loans. Private student loans are not eligible.


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