Can a person who has 2400 dollars worth of 5 year old defaulted student loans qualify for financial aid...?

Question

...even if they don't set up a payment plan on the defaulted loans? (The loans have been in default for a few years).

This person is a Texas resident, and lived in Texas when they got the loans.

Again, I am not asking for myself, so please be nice.
:-)

Can they qualify for financial aid *of any kind*?

Answer 1

No. If a person is currently defaulted on federal student loans they are not eligible to receive further federal financial aid.
They may be able to qualify for outside scholarships if they apply.

Here are 4 options given on the dept of eds website.
Going Back to School

It is now easy to restore your eligibility to receive additional Title IV federal financial aid. Basically, your options are:
*Repay or satisfy the loan in full.
*Make six agreed-upon monthly payments over a six month period. Your payment amount must be approved in advance by the Department. Every qualifying payment must be timely (received before the due date) and you cannot make all six payments as a single lump sum payment. Once your eligibility to receive additional federal financial aid has been restored after making six consecutive monthly payments, you must continue to make timely monthly payments to maintain your eligibility or else it will be permanently lost until the debt is resolved entirely. In other words, you may qualify for this program only once.

*Consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program.
*Rehabilitate your loan through our loan rehabilitation program.

Since defaulted student loans have no statute of limitations for enforceability, you would remain ineligible for additional federal financial aid until you complete one of the options mentioned above.

Answer 2

Yes and no;

Having loans in default will prevent all federal financial aid and most state level aid. There is a possibility of scholarship funding from the school or from private sources. Getting a private loan will be next to impossible.

$2400 is a tiny amount. If the person has a job and half-decent credit, get a loan (or credit card) and pay the default amount off with it. Or, tighten the belt and just pay off that loan amount over a few months.

Another alternative is to make payment arrangements to bring it out of default and keep up with those payments for 6 months. How did $2400 go into default - payments on that are near nothing? That doesn't add encouragement for someone to make a loan of any size.

Answer 3

Defaulted loans do not help someone qualify for the FAFSA financial aid packages. In addition, student loan companies would probably reject the application. The person could qualify for outside scholarships. I have included some free reading on the subject. Good luck!

Answer 4

No. Eligibility, however, can be reinstated once the borrower makes 6 full on time payments on the loans. Talk to the guaranty agency holding the loans - or the Direct Loan Program.

Answer 5

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