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Maintaining eligibility

Once you have completed the Free Application for Federal Student Aid (FAFSA) and become eligible to receive Federal financial aid such as a loan, grant, or work study funds, you must continue to meet basic eligibility criteria throughout the academic year. Completing and submitting the FAFSA is free, and it is your access to the largest source of financial aid for college. You must also make Satisfactory Academic Progress (SAP) and meet certain time frames for how long you can receive Federal financial aid.

Basic eligibility for Federal financial aid

To qualify for Federal financial aid, you must meet the following basic eligibility requirements:

  • Demonstrate financial need (for most programs)

  • Be a U.S. citizen or eligible noncitizen

  • Have a valid Social Security number

  • Be registered with the Selective Service, if you are a male

  • Have a high school diploma or a recognized equivalent of a high school diploma such as a General Educational Development certificate (GED) or complete a high school education in a home school setting approved under state law

  • Be enrolled as a regular student working toward a degree or certificate in an eligible program at an eligible institution

  • Be enrolled at least half time to be eligible for Direct Loan program funds

  • Make Satisfactory Academic Progress (SAP), as determined by the college

  • Not be in default on a Federal student loan or owe a Federal grant overpayment or Federal loan overpayment 

Satisfactory Academic Progress

To continue receiving Federal financial aid, you must make Satisfactory Academic Progress (SAP), which includes maintaining a certain grade point average and completing enough classes to keep moving toward successful completion of your degree or certificate program in a specific time period set by your school.

Each school is required to have a written SAP policy for financial aid purposes. To view your school’s policy, check its website or contact the financial aid office for information. Your school’s SAP policy should list

  • The grade-point average (or equivalent standard) you need to maintain;

  • How quickly you should be moving toward graduation (for instance, how many credits you should successfully complete by the end of each year);

  • How an incomplete class, withdrawal, repeated class, change of major, or transfer of credits from another school will affect your SAP;

  • How often your school will evaluate your progress;

  • What happens if you fail to make SAP;

  • Whether you are allowed to appeal your school’s decision that you have not made SAP (reasons for appeal may be the death of a member of your family or if you are ill); and

  • How you can regain eligibility for Federal student aid.

If your academic performance does not meet the requirements of the school’s SAP policy, you will become ineligible to receive Federal financial aid. If this happens, contact your school’s financial aid office for the steps to regain eligibility. 

Direct Subsidized Loan eligibility time limit

If you are a first-time borrower on or after July 1, 2013, there is a limit to the maximum period of time (measured in academic years) that you can receive a Direct Subsidized Loan. If you are under this limit, you may not receive a Direct Subsidized Loan for more than 150 percent of the published length of your program of study. This time period is known as the Maximum Eligibility Period (MEP). The periods of time that count against your MEP are periods of enrollment for which you receive a Direct Subsidized Loan. The MEP is based on the published length of your current program of study. The published length of any program of study will be listed in your school’s catalog or on their website.

The chart below shows examples of MEP based on different program lengths.

Maximum Eligibility Period (MEP) Chart

Program Length Maximum Eligibility Period (MEP)

4 years

6 years

2 years

3 years

1 year

1.5 years

12 weeks

18 weeks

Because your MEP is based on the length of your current program of study, the MEP can change if you switch to a program that has a different length. Also, if you receive a Direct Subsidized Loan for one program and then change to another program, the Direct Subsidized Loan you received for the earlier program will generally count toward your MEP for the new program. If you receive a Direct Subsidized Loan when you are enrolled less than full time, the period that is counted against your MEP will be reduced.

If you continue to be enrolled in an undergraduate program after you have reached your MEP, and you did not complete the program or do not enroll in a longer program, you are no longer eligible to receive additional Direct Subsidized Loans. However, you may be eligible to receive a Direct Unsubsidized Loan.

In addition, if you enroll in any undergraduate program after you have reached your MEP, the Federal government will no longer pay the interest that accrues on your Direct Subsidized Loan. This is called losing interest subsidy. If the interest subsidy is lost, you become responsible for paying the interest on your Direct Subsidized Loan during periods of

  • in-school status,

  • grace,

  • deferments, or

  • certain periods of repayment under the Income-Based Repayment Plan or Pay As You Earn Repayment Plan (PAYE).


The chart below provides examples of when you become responsible for paying the interest on your Direct Subsidized Loan:

Loss of Interest Subsidy Chart

Do I become responsible for paying the interest that accrues on my Direct Subsidized Loan because … Yes No

I am no longer eligible for a Direct Subsidized Loan because I met the 150% limit and I stay enrolled in my current program?

X

 

I am no longer eligible for a Direct Subsidized Loan because I met the 150% limit, did not graduate from my prior program, and am enrolled in an undergraduate program that is the same length or shorter than my prior program?

X

 

I transferred into a shorter program and lost eligibility for a Direct Subsidized Loan because I have received Direct Subsidized Loans for a period that equals or exceeds my new, lower maximum eligibility period, which is based on the length of the new program?

X

 

I was no longer eligible for a Direct Subsidized Loan, did not graduate from my prior program, and am enrolled in an undergraduate program that is longer than my prior program?

 

X

I lose eligibility for a Direct Subsidized Loan and immediately withdraw from my program?

 

X

I graduated from my program prior to or upon meeting the 150% limit, and enroll in a subsequent undergraduate program that is the same length or shorter than my prior program?

 

X

I enroll in a graduate or professional program?

 

X

I enroll in preparatory coursework that I am required to complete to enroll in a graduate or professional program?

 

X

I enroll in a teacher certification program and my school does not award an academic credential?

 

X

Chart adapted from studentaid.ed.gov

If you become responsible for the interest that accrues on your Direct Subsidized Loan, any interest that you do not pay will accrue and be capitalized at the end of grace, deferment, and other periods. Capitalized interest will increase your loan principal, increase your monthly payment amount under most Direct Loan repayment plans, and cause you to pay more interest over the life of the loan. Your loan servicer will notify you if you become responsible for paying the interest on your Direct Subsidized Loan.

If you become ineligible for a Direct Subsidized Loan because you have reached your MEP, you may again become eligible to receive a Direct Subsidized Loan if you enroll in a new program of study that is longer than your previous program. If you regain eligibility to receive an additional Direct Subsidized Loan for this reason, the Federal government will pay the interest that accrues on your new loan during grace, deferment, and other periods. However, you will continue to be responsible for paying all of the interest that accrues on your previous Direct Subsidized Loan.

Federal Pell Grant lifetime eligibility

The amount of Federal Pell Grant funds you may receive over your lifetime is limited by Federal regulations to be the equivalent of six years. This limit is called the Federal Pell Grant Lifetime Eligibility Used (LEU). Since the maximum amount of Pell Grant funding you can receive each year is equal to 100%, the six-year equivalent is 600%. The LEU provision applies to all students regardless of when they received their first Pell Grant award.

To calculate the amount of the maximum six years of Federal Pell Grant funding you use each year, the U.S. Department of Education (ED) will compare the actual amount you receive for the award year with your scheduled award amount for that award year. A scheduled award is the maximum amount of Pell Grant funding you can receive for an award year. An award year is the period from July 1 of one calendar year to June 30 of the next calendar year.

If you receive the full amount of your scheduled award, you will use 100% of your LEU. If you do not receive your entire scheduled award for an award year, the amount of your LEU is calculated based on the percentage that you did receive. The most common reasons for not receiving the full amount of your scheduled award is because you were not enrolled for the full year or you were not enrolled full time.

The U.S. Department of Education (ED) keeps track of your LEU by adding together the percentages of the Federal Pell Grant scheduled award you receive for each award year. If your LEU equals or exceeds 600%, you may no longer receive Pell Grant funding. Also, if your LEU is greater than 500% but less than 600%, while you will be eligible for a Pell Grant for the next award year, you will not be able to receive a full scheduled award.

To view the amount of your Federal Pell Grant LEU, sign on to NSLDS. Once you have signed into your NSLDS account, click on each loan to find your loan servicer contact information. The Pell Grant LEU can be found on the Financial Aid Review page. If you have questions about your Pell Grant or feel that your LEU is incorrect, contact your school’s financial aid office.

Dropping classes or withdrawing from school

As a basic eligibility requirement to receive most Federal financial aid, you must be enrolled at least half time. Any time you change your enrollment status, it may be necessary for your school to re-evaluate your eligibility for Federal financial aid and to adjust the amount of aid you receive.

Before making a decision to drop a class or withdraw from school, be sure that you have considered all of your options. Talk to your teachers or faculty advisor to see if there are alternative ways to allow you to continue in your classes. Contact your school’s financial aid office to find out how changes to your enrollment may affect your current and future Federal financial aid.

Possible changes to your Federal financial aid due to dropping classes or withdrawing from school are as follows:

  • The six-month grace period will begin for your Federal student loan if you drop to less than half-time enrollment. Repayment of your student loan will begin after the end of the six-month grace period.

  • The nine-month grace period will begin for a Federal Perkins Loan if you drop to less than half-time enrollment. Repayment of this student loan will begin after the end of the nine-month grace period.

  • An in-school deferment status that you have on a previous loan will end if you drop to less than half-time enrollment.

  • A Federal student loan you were originally set to receive may be adjusted or canceled if you are no longer enrolled at least half time.

  • You may have to repay Federal financial aid according to the Federal return of funds policy if you withdraw from your last class, and you did not complete 60 percent of the semester.

  • Federal Pell Grant funds may be recalculated based on changes made to your enrollment status.

  • A TEACH Grant award may be adjusted due to changes in your enrollment status.

  • Adjustments to other Federal financial aid programs may be made to prevent overawards or to address overpayments that result from changes to your enrollment status.

If you decide to drop a class or withdraw from school, contact your school’s financial aid office for procedures concerning your Federal financial aid and to see if you are required to complete exit counseling. Also, it is important to notify your loan servicer if you are dropping to less than half-time enrollment or withdrawing from school. Be sure to keep all documentation.

Changing your major

Part of your college education is choosing a major field of study at some point. This is an important decision that will set the course for your program of study and help determine your career after college. During your time in college, you may decide to change your major. A change in your major may affect Federal financial aid.

Before making a decision to change your major, be sure that you have considered all of your options. Talk to your teachers or faculty advisor to discuss resources available to help you make your decision. Changing your major may extend the time it takes for you to complete your degree. Classes that you have already completed may not count toward your new degree. Contact your school’s financial aid office to find out how changes to your major may affect your Federal financial aid.

Possible changes to your Federal financial aid due to changing your major program of study may include the following: