10.13.09 | You Can Still Qualify for Federal Aid If You Do Poorly in School
If your GPA falls below a 2.0 you still may be eligible for federal aid. H0w the process works is that you are given a semester to raise your cumulative GPA to above 2.0 (the probationary period). If you are unable to do so you may be sanctioned to financial aid suspension or dismissal from the school.
If you get dismissed you will need to enter another school (most likely without the benefit of federal assistance), raise your academic standing, and then apply for reinstatement.
The other alternative, however, is to just enroll in a new school, file your FAFSA, and not have your transcripts sent over to the new one. That assures you will still receive federal aid, assuming you demonstrated financial need of course. The problem with this option, however, is that any previous credits you received would not be credited at the new institution. It would be like you were entering college for the first time in many ways.  You would also still be required to repay the loans you took out at your first school, and those amounts would be debited from your maximum allotment of funds as well.
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Check with your school. Some schools (such as ours) gives students a year on financial aid probation (in which the student can still receive aid) to be meeting SAP. Then after the year, if they are not meeting requirements, they will be placed on financial aid suspension and cannot receive aid.
November 16th, 2009 | #