My son will be applying to colleges this fall since he is a high school senior. Should he wait until he is accepted into a college before applying for scholarships?
— Bryan R.
Your son should start searching for scholarships as soon as
possible. There are scholarships with deadlines in every month of the
year (more in the fall and spring than during the summer) and every
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year in school. There are even
children under age 13
Since scholarship sponsors receive more qualified applications than
they have funds available, to some extent winning a scholarship is a
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numbers game. Your odds of winning a scholarship are greater if you
apply for more awards, all else being equal. (But only apply if you
are qualified. You may be a wonderful person, but if you don't satisfy
the eligibility restrictions, you will be wasting your time.)
On the other hand, the Free Application for Federal Student Aid
(FAFSA) cannot be submitted before January 1 because it is based on
your income from the prior tax year, which ends December 31. This form
is used to apply for financial aid from the federal and state
government, all public and most private colleges. You should submit
the FAFSA as soon as possible after January 1 because some states have
very early deadlines. Some colleges also award aid according to
priority deadlines. Do not wait until you've filed your federal income
tax returns or have been accepted into a college.
I lost my job a year ago and only my husband works. We recently had
to file for bankruptcy (Chapter 7). I'm going to college right now
since my son is grown up and out of the house and I got financial aid
from the govenment. Will I still be able to get financial aid from the
government since I filed for bankruptcy? I have one more year of
school left and I am worried that I won't be able to graduate.
— Lorrin Y.
Federal student aid, including the Perkins loan and the Pell Grant,
may not be denied solely because of a bankruptcy filing. However,
colleges may continue to consider the student's post-bankruptcy credit
history in determining willingness to repay a Perkins loan. Also, if some of
the student's federal student loans are currently in default and were
not discharged by the bankruptcy, the student is ineligible for
federal student aid until the loans are rehabilitated. (Federal
student loans that were discharged in bankruptcy have no impact on aid
Federal PLUS loan borrowers, however, must not have an adverse credit
history. The definition of an adverse credit history includes having
had a bankruptcy discharge in the last five years. See
How does bankruptcy affect PLUS loan eligibility?
for additional details.
Private student loans continue to consider bankruptcy as part of their
credit underwriting, and most will deny a private student loan if the
borrower has had a bankruptcy within the last 7 or 10
years. Previously lenders would make exceptions for events that were
beyond the borrower's control (e.g., extraordinary medical costs or
natural disasters) or to compensate for a bankruptcy with a
creditworthy cosigner, but this leniency has largely evaporated due to
the credit crisis. Borrowers who filed Chapter 11 are more likely to
qualify for a private student loan than borrowers who filed Chapter 7
Why does your financial aid get cut off so quickly if you don't
maintain a certain grade point average? Cutting off the aid
effectively prevents you from going back to college. Shouldn't there
be at least a semester grace period to bring your grades up?
— Ollie J.
Federal law requires students to be making satisfactory academic
(SAP) in order to continue receiving federal student
aid. This involves maintaining at least a C average (2.0 on a 4.0
scale) at the end of the second academic year. The rationale is that
if a student is not making progress consistent with the requirements
for graduation, it is a waste of taxpayer money to continue funding
Most colleges will issue a warning if a student is close to or under
this threshold. This is often referred to as "academic probation". There
is also an appeals process whereby a school may temporarily waive the
requirements when the failure to maintain satisfactory academic
progress is due to special circumstances, such as death of a relative
or the personal injury or illness of the student.
Students may regain aid eligibility by improving their cumulative GPA
above the C average threshold. This often requires using their own
financial resources or borrowing private student loans.