Federal Financial Aid Eligibility Requirements

Are you eligible for Federal Financial Aid?

The U.S. Department of Education has established specific requirements for students to qualify for federal financial aid programs. Without meeting those academic or legal requirements, you cannot receive benefits.

At the time that you submit your application, you will be asked to verify that these requirements have been met. On occasion you will have to provide evidence.

Academic Requirements for Determining Federal Financial Aid Eligibility

The most important academic factor in determining eligibility is that the applicant must actually be permitted to receive a postsecondary education. Postsecondary educational institutions include 2- and 4-year colleges, community college, technical schools and some certificate programs. You are only able to attend such an institution if one of the following is true:



– You’ve received a diploma or General Education Development (GED) Certificate from a high school or GED testing center.
– You’ve completed a state-approved high school curriculum as a home school student.
– You’ve passed the ability-to-benefit (ATB) examination of a school you wish to attend.

What’s more is that you have to be on the college track. It is required that you be enrolled or accepted to enroll in a degree- or certificate-awarding program and maintain minimum academic standards.  Students of online education programs may also be eligible for federal financial aid, but only if it awards an official recognition such as a college degree.

Legal Requirements for Determining Federal Financial Aid Eligibility

Federal financial aid is only available for U.S. citizens or Eligible Non-citizens. Part of this requirement is that you possess a valid Social Security Number; however, exceptions exist for Eligible Non-citizens from the Federated States of Micronesia, the Republic of Palau and the Republic of the Marshall Islands.

It is not permitted for a recipient of federal financial student aid to use the funds for any purpose other than education. A current or former student who has defaulted on a previous student loan or ignored grant debts (which can result from dropping out of an institution) won’t be allowed to receive additional funds.

For male applicants aged 18-25, it is mandatory that you complete Selective Service Registration. Your Federal Application for Federal Student Aid (FAFSA) can serve as your registration if you give permission to the Selective Service System to use it.

Most applicants with recent drug-related convictions will be ineligible for aid. Question 31 on your application addresses this point. If your recent convictions disqualify you for federal aid, you should continue with the application. Even forms of students who are ineligible for federal aid can serve as gateways to other forms of aid such as state college grants and private scholarships. It can be a multi-purpose application.

While incarcerated, you’re unlikely to receive any federal financial aid. Unless you are in a federal or state institution (at which time you’re definitely ineligible), you may qualify for a Pell Grant.

Source: “Funding Education Beyond High School,” Guide to Federal Student Aid, 2009-2010, U.S. Department of Education, Federal Student Aid.



A Few Bad Apple Close Section 8 Housing Loophole

For the ten years preceding 2005, subsidized housing was easily available to college students, even with poor backgrounds. The U.S. Department of Housing and Urban Development (HUD) didn’t require an applicant to provide his or her parent’s income. Financial aid totals weren’t needed either. The reason for this was to increase the availability of higher education for poor students by lowering housing expenses.

What is Section 8?

“Section 8” is offered by HUD’s public housing department. The program benefits households with very low incomes by enabling them to live in privately-owned housing by covering some of the expenses. The alternative is public housing, frequently called “projects.”

Misuse of Section 8 Housing by Athletes

ESPN televised an investigative report in 2005 detailing the method by which many student-athletes were manipulating the Section 8 housing program. Because they were not obligated to declare parent’s income or financial aid of any kind, students were able to simultaneously receive financial housing benefits from university scholarships and the federal government.

Only a few universities were specifically identified as having manipulative students, but the problem quickly became so prolific that it took only four days before President George W. Bush closed the loophole.

How Does Section 8 Work?

Section 8 provides financial assistance for low-income families and enables them to live outside of projects, where crime is high and poverty can become cyclical. There are two programs. They are the Certificate and Voucher programs.

– Section 8 Certificate Program – A local Public Housing Authority (PHA) pays the family’s landlord (a private property owner) a sum directly. That sum is some number between 30% of their income and a “payment standard,” determined by the PHA. Generally, the standard is 80-100% of “fair market rent,” which is calculated by evaluating rental prices of the area. If that amount is insufficient to cover the rent, the family may pay what remains owed. If it is in excess of the rent, the family may keep the surplus.

– Section 8 Rental Voucher Program – The program is usually called the Housing Choice Voucher Program. The difference between these programs is that the voucher program allows a family to find an apartment on their own. The benefit is that 1) the voucher gives families options, and 2) high-demand neighborhoods (which charge higher rents than the fair market standard) are no longer off-limits to impoverished families.

A local PHA office can answer any questions about the specifics of either program.

The Relationship between the Federal and the Local

The U.S. Department of Housing and Urban Development (HUD) is a federal, nationwide program. The Public Housing Authority (PHA) is a local program. HUD determines the median income level for the area monitored by each PHA. It also compensates the local agency for their efforts in reviewing/accepting applications, recertifying accepted families, and ensuring rental properties are of a suitable quality. Lastly, it guarantees that families can use its assistance even outside of the area of the PHA that accepted it initially.

The Closed Loophole

When students could apply for subsidized HUD housing without reporting parental income and financial aid, poorer students could receive housing assistance. Nowadays, students must include that financial information, which could restrict their housing prospects. Applicants who are military veterans, are at least 24 years old, are married, or have children of their own need not include their parent’s income while applying.


U.S. Department of Housing and Urban Development

Roanoke Times, December 3, 2005.


Planning for Post-College Debt

Only about half of all students complete a four-year degree in less than six years, and when the average student does graduate, he is facing almost $25,000 in loans. Handling these situations can be a lot easier if a family plans to minimize the financial obligation from the outset. Receiving even small amounts of aid can be a huge relief after graduation.

When planning out your federal financial aid attack, consider these points:

– 1. Research – You have to know what a college education actually costs. Then determine what portion of the money owed to that specific college or university can come from scholarships and grants. You want to use as much “free money” as possible. But remember, a student needs to pay for tuition, books, food, room and board, classroom supplies, transportation and maybe even entertainment.

– 2. Apply – The paperwork for a federal aid application can be intimidating. You’ll benefit from systematically compiling all the forms you’ll need. Fill them all out completely and review them all before sending them off. Pay attention to deadlines, too.

– 3. Evaluate your results – After you’ve been awarded financial aid – whether it’s in the form of scholarships or grants – look them over. Compare what you receive from one institution with what you get from another. Don’t be afraid to contact a school and try to negotiate for additional aid.  Whatever you do, be sure that the aid you receive is sufficient before you commit to a school. The financial side of the issue matters. Don’t get trapped under unnecessary debt.

There’s no guarantee you’ll receive lots of financial aid, but creating a plan puts you in a position to obtain everything for which you are eligible. By planning today, you can save tomorrow. The lower your post-graduation student loan bills, the greater financial freedom you’ll experience. It’s definitely worth the effort.