Academic probation and default student loan, how can I fix this?

Question

What a tangled web I weave. My situation is the following; I failed over 6 classes between my freshman fall 2006 and spring 2007 semester due to my own mistakes and personal problems...whats done is done. I originally had financial aid, a $1000 pell grant, and a $2000 stafford loan. I paid my own summer 2007 semester (finan. aid does not cover) and finally made some progress and got B+ in both my classes. Now I find myself wanting to continue into the Spring 2008 semester but due to my academic probation and failed classes not only have i lost my financial aid but my stafford loan and pell grant have defaulted and i need to pay $3000 before ever considering taking another class. I know there probably isn't a straight answer to resolve this but has anyone experienced a similar situation or know what steps can be taken? Any help will be appreciated.

Per the first answer, I work full-time and go to school half-time, such as taking 2-3 classes per semester. Hope this information helps...once again thank you to those who answer.

Also i was told by the university that i CANNOT enroll until this debt is paid off.

Answer 1

Right now you currently have two completely separate debts. There is one debt for Pell Grant funds that you received but subsequently must repay for dropping from the courses or receiving all non-passing grades. You also obtained a Stafford loan, which went into repayment 6 months after you stopped attending. The loan then defaults after 360 days of non-payment, therefore the debt is now held with the Department of Education Debt Collection Services (DCS). So, at this point, you have one debt for Pell and one debt for Stafford loan, both of which are likely being held by DCS.

You need to contact them and begin making payments. There is really no way around this. Because of the defaulted debts your school is denying you enrollment and your financial aid office will deny you from receiving any more aid. Because repaying the debt is going to take time, I would rethink beginning in the Spring 2008 semester. This will give you more time to clean up the mess you have created and get ready to begin fresh with the new school year in Fall 2008 (Aug 08).

The defaulted debt requires a minimum of 6 consecutive, voluntary monthly payments before it will be eligible to be consolidated into a new debt, thus retiring the defaulted debt. Once the 6 consecutive payments have been made, DCS will send you a letter to confirm you regained eligibility and you can take this note to your financial aid office as proof of your cleared default. You must continue your payments on after the 6 months as scheduled in order to keep your loan from defaulting again. Your school is notified immediately when a student re-enters default, which will then halt your financial aid again, so it important that you keep up on your payments.

Keep in mind that once you default, you no longer have the option to defer for being in-school at least half-time until you have consolidated the debt.

So, when the 08-09 FAFSA comes available on January 1, 2008, file right away while continuing to make your payments. Once you receive the cleared default letter, submit a copy to your financial aid office, along with any other documents received, and you should be ok to receive further aid and re-enroll. You may also want to check with your financial aid office about your Satisfactory Academic Progress to ensure that you are meeting the minimum academic requirements to qualify for federal aid. If you find out you are academically disqualified from federal aid, inquire about an appeal or petition.

Answer 2

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Answer 3

Your situation at your previous college most likely will not factor in to your aid eligibility at the new college. As long as you are current on your loans, things should be ok. Generally, SAP (satisfactory academic progress) status doesn't follow from school to school. Each school will have their own policy, and especially since your prior work was 10 years ago, you'll probably have a clean slate and chance to prove yourself again.

Answer 4

If you are enrolled as a full time student you will not have to pay on your student loans. Are you able to get enrolled in the next Springs classes? Once you are enrolled they will postpone your loan payments as long as you are attending classes. Talk to the university financial aid office.