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Continued eligibility for federal student aid requires the student to be making satisfactory academic progress (SAP) toward a degree or certificate. SAP involves both qualitative standards, such as minimum GPA requirements, and quantitative standards, such as maintaining a pace consistent with graduation in a reasonable timeframe. Each college and university sets its own written standards for SAP, subject to minimum federal requirements. SAP is reviewed for each student at least once a year in programs lasting more than a year and after each academic term (including summer terms, if attended by the student) for programs lasting a year or less.
The college’s SAP policy must specify a qualitative standard such as a minimum grade point average (GPA) requirement. In addition, federal law and regulations require students who are enrolled in a 2-year or longer academic program to have at least a “C” average (a 2.0 GPA on a 4.0 scale) at the end of their second academic year.
The quantitative standards require students to be taking and passing enough classes to graduate within the maximum timeframe. The maximum timeframe is 150% of the published duration of the academic program. For example, the maximum timeframe is 1.5 years for a 1-year Certificate program, 3 years for a 2-year Associate’s degree program and 6 years for a 4-year Bachelor’s degree program.
As soon as it is clear that the student will be unable to graduate within 150% of the normal timeframe, the student loses eligibility for further federal student aid.
If a student loses eligibility for federal student financial aid due to a failure to satisfy the minimum GPA requirements, and subsequently the student’s academic performance improves, it may be possible for the student to regain eligibility for federal student aid.
Usually, a student will have to pay for at least one academic term without federal financial aid before being eligible for reinstatement of federal financial aid eligibility. However, some colleges may place a student on a financial aid warning or a financial aid probation status. A student who is placed on a financial aid warning status may continue to receive financial aid for one academic term while the student tries to improve his or her academic performance.
At some schools, if a student becomes ineligible to receive federal student aid because of his or her lack of satisfactory academic progress, the college or university will replace the federal funds with state and/or institutional funds. However, generally, most schools will not replace the missing federal student aid funding.
Some students take advantage of possible loopholes in campus SAP policies to maintain eligibility for federal student aid. These loopholes include switching academic majors or transferring to another college.
Most colleges and universities allow students to appeal a failure to maintain satisfactory academic progress. Common grounds for an appeal include the death of a relative of the student, the injury or illness of the student or other special circumstances. The student’s written appeal must explain why the student failed to maintain satisfactory progress and what has changed to allow the student’s academic performance to improve by the end of the next evaluation period.
Students who borrow Direct Subsidized Loans for the first time on or after July 1, 2013 may not receive Direct Subsidized Loans for more than 150% of the normal duration of their current academic degree or certificate program. This maximum eligibility period is the same as the maximum time-frame restriction for satisfactory academic progress, but only academic terms during which the student receives a Direct Subsidized Loan count against the maximum eligibility period. (Students do not have the ability to opt out of the Direct Subsidized Loan in favor of unsubsidized loans. They can, however, opt out of all federal student loans.)
The maximum eligibility period is based on the student’s current academic degree program, and may change if the student switches to a different academic degree program. In some cases, a student may regain eligibility for Direct Subsidized Loans by switching into a longer degree program. If a student switches academic degree programs, the Direct Subsidized Loans received for previous degree programs will generally count against the maximum eligibility period for the current degree program, if the student has not yet graduated from the previous degree programs.
Students who lose eligibility for additional Direct Subsidized Loans because they are taking too long to graduate may also lose eligibility for the subsidized interest benefit on their current Direct Subsidized Loans. Generally, the federal government will no longer pay interest on Direct Subsidized Loans during the in-school deferment and other authorized deferment periods for borrowers who subsequently enrolled in a program of the same or shorter length after exhausting the maximum eligibility period without graduating. (Students who enroll in a graduate or professional degree program do not lose eligibility for the subsidized interest benefit; likewise, for students who enroll in certain preparatory coursework and teacher certification programs that do not lead to a college degree or certificate.) For first-time Direct Subsidized Loan borrowers, as of July 1, 2013, the loss of subsidized interest benefits is retroactive. The intention is to encourage students to finish their degree programs within the 150% maximum time-frame restriction.
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