Federal student loans offer one of the easiest ways to get funding for a higher education, which is becoming increasingly expensive. While almost every U.S. citizen is eligible for federal student loans, some things can disqualify you. Let's take a look at what can keep you from getting federal student loans.
Key Takeaways
- If you don't meet baseline eligibility requirements, or if you've previously defaulted on a loan, you may not be approved for a federal student loan.
- You must maintain "satisfactory progress" in school to be approved for student loans.
- You can take steps to regain or improve your eligibility for student loans.
Factors That Can Disqualify You From Student Loans
To secure funding for higher education, you can apply for either private or federal student loans. Private student loans have varying eligibility factors depending on the lender. Often, private student loans require a more stringent credit check instead of being based on borrowers' needs like federal student loans are.
Federal student loans are generally easier to qualify for, but they do have criteria. If you want to get federal student loans, it's important to understand the eligibility requirements as well as what might disqualify you from receiving financial aid.
Not Filing Out the FAFSA
To get any federal financial aid, you must fill out the Free Application for Federal Student Aid (FAFSA). This form collects information about your status as a student and your family's financial situation to determine what federal grants and programs you're eligible for. It's also required to get student loans.
You must file the FAFSA each year to remain eligible to receive federal student loans while you're in college.
Having Criminal Convictions
Certain criminal convictions can reduce your eligibility for federal student loans. Drug convictions no longer impact your qualifications, but if you're incarcerated, your eligibility is limited. Once you're out of incarceration and you're serving probation or on parole, you might be able to receive federal student aid again.
Not Being a U.S. Citizen or Eligible Noncitizen
In general, you need to be a citizen of the United States to qualify for federal student loans. However, some eligible noncitizens can still qualify for student loans. You need to have specific documentation, such as an I-551, I-151, or I-94. A T-Visa, which is used for those who are victims of human trafficking, might also help you qualify for student loans.
Undocumented noncitizens, including DACA students, aren't eligible for federal student loans.
Not Having a Diploma or GED
You must have a high school diploma or equivalent to be eligible to receive federal student loans. Usually, if you don't have a diploma, you can also qualify with a GED. In some cases, you can even qualify if you've completed a homeschool program, but you may need to provide additional documentation.
Not Maintaining Satisfactory Progress
Once you have student loans, you're expected to meet the requirements of your school program. This includes being enrolled at least half-time in your eligible program and making progress toward your degree or certificate. If you're not meeting your school's requirements for forward progress, you might not be able to get a student loan for the next year.
Defaulting on Previous Student Loans or Grant Refunds
Do you have previous student loans? If you do, and you're in default, you won't be approved for additional student loans.
The same is true of grant refunds. If you want to be able to take out more federal student loans, you need to rehabilitate defaulted loans.
Not Meeting Other Baseline Eligibility Requirements
There are other eligibility requirements, such as consenting to have your federal tax information transferred to your FAFSA, that you need to meet. If you're under 24, unmarried, or working toward an undergraduate degree, you'll need to include information about your parents as well. If they don't fill in the information, you won't qualify for federal student loans.
Private Student Loans Eligibility
In general, it's harder to qualify for private student loans. Most private student lenders have income and credit requirements, which are not part of the criteria for federal student loans. If your federal student loans don't cover all of your expenses, you might need to fill the gap with private loans.
Eligibility for Federal Student Loans
Basic eligibility for federal student loans is fairly straightforward. You don't need to worry about a credit check. The eligibility requirements include:
- Be a U.S. citizen or meet the requirements of an eligible noncitizen
- With few exceptions, have a Social Security number (SSN)
- Be accepted to, or enrolled in, an eligible higher education program
- Continue to make satisfactory progress toward your degree or certificate, as defined by the school
- Not be in default on other student loans or owe money on a grant
- Affirm that you'll use the student loan money for education
- Allow your tax information to be used on the FAFSA
- Complete high school and show that you have done so with a diploma, GED, or approved homeschool program
How to Regain Eligibility for Student Loans
If you're disqualified from getting federal student loans, you can take some steps to regain eligibility.
One of the most common issues is student loan default. You can rehabilitate your student loans with the help of consolidation or use the Fresh Start program offered through the U.S. Department of Education. With the Fresh Start program, you can work toward getting your loans out of default so you're eligible to borrow again.
To gain eligible noncitizen status, you can go through the process of getting the right paperwork. If you've been a victim of human trafficking or you've been abused in your country of origin, you might be able to get a visa that makes you eligible. Depending on where you're coming from, you might be able to apply for the right forms and visas to change your status or regain your status. The U.S. Citizenship and Immigration Service can help.
You might also need to talk to your school about getting back on track if your grades have fallen or you had to leave school for a semester. Your school can help you enroll in the proper number of classes and help you begin making progress toward regaining eligibility.
Additionally, there are ways to establish your eligibility even without a high school diploma or GED. The "ability-to-benefit" alternatives offered by the Education Departmentinclude taking a special test at your school or completing six credit hours toward a degree or certificate without federal aid. Afterward, you might be eligible for student loans to finish your education.
Is There an Income Limit for the FAFSA?
No, there is no income limit to fill out the FAFSA. Anyone of any income level can be eligible for unsubsidized federal student loans. However, grants, subsidized loans, and other types of aid may have income limits.
What Federal Student Loan Is the Easiest to Get?
The unsubsidized federal student loan is automatically provided to everyone who meets basic eligibility criteria. This makes it the easiest to get because anyone can receive it.
What Is the Lowest Credit Score to Qualify for Student Loans?
There is no credit requirement for federal undergraduate student loans. Basic credit requirements need to be met for PLUS loans. However, credit scoring generally isn't used to determine eligibility for federal student loans.
The Bottom Line
Federal student loans are fairly easy to qualify for compared to private student loans, but these loans do have standards. Not everyone will be eligible for a federal student loan. Understanding the requirements of what you're applying for will help you take steps to increase your chances of getting approved.
