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Financial Aid Cancelled Mid Semester?

blugirlami21blugirlami21 Posts: 6Registered User New Member
I successfully got my financial aid reinstated for this semester but I figured that I wouldn't be able to receive financial aid until the fall so I registered for one class and was going to pay out of pocket because that's all I can afford. I was fine with that since that is how it's been since my financial aid was suspended.

I get an e-mail saying that I'm eligible for state loans and a pell grant for about 2500 dollars. I was excited to take more than one class at a time so I accepted the pell grant and registered for four classes. That was about 1700 dollars and I spent 300 hundred more dollars on books. So I spent 2000 dollars all together. While this is going on I am trying to fix my student loans so that they don't go into default.

I am now a month into classes when my efforts failed and my loans went into default. The school immediately took back the financial aid and hit me with the 2000 dollar bill. I have already made plans to rehabilitate my loans but that's not going to help me right now.

I've read the federal financial aid refund policy several times and for the amount of time I've had class I can't understand why I owe the whole two thousand dollars. Shouldn't it be a fraction of it? I'm just disheartened by this turn of events and I'm not sure what can be done if anything to dig myself out of this hole.

Any suggestions would be welcome.
Post edited by blugirlami21 on

Replies to: Financial Aid Cancelled Mid Semester?

  • dodgersmomdodgersmom Posts: 5,672Registered User Senior Member
    You need to contact the school and find out how much you would owe if you withdraw immediately. You were billed for the entire semester because you enrolled for the entire semester. See if the school will reduce your bill if you withdraw now.

    Good luck!
  • kelsmomkelsmom Posts: 12,295Super Moderator Senior Member
    When did your loans go into default? While you were in school? That should not have happened ... they should have been put in in-school deferment. Regardless, if they went into default AFTER your student loan and Pell were paid to you, you can keep the payments ... you just can't get any future payments while in default. If they went into default BEFORE you received your Pell and loan, that is a different story. Please visit your financial aid office and make sure to speak with someone who is well-versed in the regulations surrounding default and aid (you may need to speak with a manager).
  • blugirlami21blugirlami21 Posts: 6Registered User New Member
    According to the NSLDS, my loans went into default effective 01/31/2013. I was enrolled in school full-time by 01/22/2013. The grant had been awarded to me on 01/15/2013 and I accepted on the 01/17/2013. Why did the school wait til now to cancel the aid? Can I use that to refuse paying them?

    The school has erased all evidence that they awarded me financial aid and I don't have a paper bill to show that the classes were paid for with financial aid. The bill now only reflects what I owe now without financial aid.
  • kelsmomkelsmom Posts: 12,295Super Moderator Senior Member
    You need to talk directly with someone at the school who can help you. From what you have told me, your loans should not have gone into default if you were in school ... and you would be able to keep the disbursement that was made prior to the default, anyway. Computer systems automatically back off your aid. You need to get a helpful human involved.
  • blugirlami21blugirlami21 Posts: 6Registered User New Member
    Does it matter if they never disbursed anything to me? I never received a check for the grant nor did I receive the leftover money that wasn't used. They just credited the money towards the courses and the books.

    I am going to talk to my loan officer today about it and see what she says. The advisor I talked to at the school didn't seem to interested in helping me fix my problem, I'll try to talk to her again as well. Thanks for all your help kelsmom, I appreciate you.
  • annoyingdadannoyingdad Posts: 1,904Registered User Senior Member
    If the finaid advisor isn't being helpful, ask to talk to her supervisor. Sometimes you have to be insistent which is difficult for many young people to do.
  • kelsmomkelsmom Posts: 12,295Super Moderator Senior Member
    Yes, you need to be insistent. Not all aid officers are well-versed in all regulations. It's not often that your situation comes up, so your aid officer may not even know the regulations as they apply here. It's important to talk with someone in the office who can review all the facts of your situation and determine how the regulations apply in your case.
  • blugirlami21blugirlami21 Posts: 6Registered User New Member
    So I have an update on this. When the semester started I was only going to take one class so that's what I registered for. I signed up for the payment plan because that's what I have to do to afford the class. When I got financial aid I was informed that the payment plan was cancelled because I had financial aid fine.

    A couple of days ago I get an e-mail saying that my payment plan has changed and a payment would be coming out of my account the next day. The school had brought the payment plan back and upped the bill from the class to the current charge of 2000 dollars a payment for 1000 dollars would be coming out the following day. I couldn't believe it. I contacted the school and they said since I had signed up for the payment plan at the beginning of the semester that there was nothing they could do, I had to let them collect their payment regardless of whether I had the money or not.

    I have been talking to my financial aid advisor and she basically said the same thing. She now informs me that the records show that I withdrew from classes before financial aid was disbursed so the bill is mine to pay. I don't even know what to say at this point. I don't know what to do about them lying and being shady about so many things. They never disbursed anything to me, they never planned to as far as I'm concerned. They knew about my student loans being defaulted for weeks and didn't say a word about them dropping me from financial aid.
  • kelsmomkelsmom Posts: 12,295Super Moderator Senior Member
    She now informs me that the records show that I withdrew from classes before financial aid was disbursed so the bill is mine to pay.
    ******
    If that is the case, then they are correct. Your posts seemed to indicate that money was paid to your account - if it was not, you do not have any eligibility. Once you withdraw from classes, aid cannot be disbursed - even if you were eligible before you withdrew. And because you are in default, even if you were in school, you could not get a disbursement. I can't really tell which came first here, but I can tell you that you cannot get aid. As for this: "They knew about my student loans being defaulted for weeks ..." --- I would say that YOU should have known about them being in default even before the school knew, because you borrowed them, you were responsible for repaying them, and you did not pay them.
  • swimcatsmomswimcatsmom Posts: 14,876Registered User Senior Member
    I'm really confused. Are you enrolled for one class? 4 classes? Did you withdraw from some of them? All of them?
  • blugirlami21blugirlami21 Posts: 6Registered User New Member
    Money was paid to my account and applied to the classes and to the books that I used for the classes. Before they cancelled the aid I was never given the remainder of the funds through a check nor through their funding company. I didn't withdraw from classes until the aid was taken away. I can prove that. I didn't withdraw from the four classes until I confirmed with her that the aid was cancelled and as I did it on a Friday it didn't go into effect until the following Monday.

    I honestly didn't know that being in default could affect your financial aid but at the time I was assured that the loans could be turned around but that's a story for another day.

    I am more than willing to pay what I have to I just don't want them putting things in my record that are not true or that will hurt me in the future. The way she worded made it seemed like it would be validation or compulsion for me to foot the bill and I just want to make sure that it's true and right what's going on.
  • kelsmomkelsmom Posts: 12,295Super Moderator Senior Member
    Okay, then money WAS disbursed to you before you withdrew. The fact that you didn't receive a refund doesn't mean it wasn't disbursed. That is actually important. If the school received notification of your default before they disbursed your aid but didn't realize it (which is possible), they would have to reverse your aid. That may be what happened here. You can keep aid that is disbursed before the school is notified of a default, but you can't keep it if they were notified before the date of disbursement. It isn't always easy to keep on top of the default notifications, so the timing may have been an issue.

    It takes at least 6 on-time payments on a defaulted loan to become eligible for aid again, so a default can't be cleared quickly or easily. A statement must also be obtained from the Dept of Education once the required number of on-time payments have been made that tells an aid office that you are eligible for aid.

    I am sorry that this happened to you. I am sure the school isn't happy that it happened, either, but they do have to follow regulations. Concentrate on paying everything off and getting out of default for now.
  • blugirlami21blugirlami21 Posts: 6Registered User New Member
    I am already making payments to turn the default around and I am doing the best I can to find another job or a miracle to pay this bill. It just seems like everything I thought to do to fix the problem was wrong. I really wished I had just kept the classes but once you drop the school won't let you go back. I'm basically paying for nothing now. But you can't go back in time and everything is a lesson.

    Thank you so much for all your help kelsmom, I really appreciate you taking the time to offer your time and advice.
  • kelsmomkelsmom Posts: 12,295Super Moderator Senior Member
    I work at a grad school, and I have a young woman who won't be able to join us this fall because she won't have her loan out of default in time - she is a talented artist, and we really wish she could attend, but it just isn't going to work. I know it's very disappointing for her, as the situation is for you, too. Truly, though, it is good to take that time to get everything squared away. It will be easier once you go back, knowing everything is set. Best of luck to you.
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