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Can I still get fafsa money if I have a financial hold on my transcripts?

ineffableahimsaineffableahimsa Registered User Posts: 3 New Member
Back in 2010 I dropped out in the middle of spring semester from a community college in MN because of medical reasons. At the time I was on a pell grant, so I guess the pell grant took the money back and the school I was going to says I owe them $2700 before they will release my transcripts. I also get letters from the minnesota department of revenue for this money I owe.
Since I cannot afford to pay back the money and I am disabled so I cannot work, I have been looking to see if I can enroll in other schools so that I can then get financial aid from them and use the money not used for tuition to pay back the other school, get my transcripts and start over.
It was hard to find a school that would take me with a hold on my transcripts but I found one that will and they said they have seen students in this situation before and it will work out but I am scared because one school I called before this one told me I wouldn't be able to get financial aid and no school would take me until the other debt was paid off.
I have filled out my fafsa though and it says that my EFC is 0 and I am eligible for 5,500 grants and 9,500 loans, so did this lady just not know what she was talking about? My question is will I be able to get FAFSA grants and loans despite this other school having a financial hold on my transcripts?
Post edited by ineffableahimsa on

Replies to: Can I still get fafsa money if I have a financial hold on my transcripts?

  • happymomof1happymomof1 Registered User Posts: 25,487 Senior Member
    Sorry, but it just doesn't work that way.

    Is the institution that is willing to admit you anyway an unaccredited or for-profit school? If so, you need to run away as fast as you can.

    Contact the original institution, and the MN dept. of revenue, and sort your difficulties out. If you are indeed permanently disabled, there is likely to be a way to deal with this.

    Going to school just so you can get a loan for the purpose of paying off another loan makes no sense at all. What would you propose to do at that future date that you are held responsible for paying back the second loan if your disability continues to impede your employment options?
  • ineffableahimsaineffableahimsa Registered User Posts: 3 New Member
    That is not the sole purpose of me going back to college. My goal is to graduate from college with a degree that allows to to work in an environment that would not aggravate my disability. Unlike working minimum wage at mcdonalds for the rest of my life...

    There is NO way to deal with it other than paying it back in full, I have contacted everyone I can and told them my situation and story, they are very unwavering and won't even do a payment plan even tho I am on SSI and food stamps and have a child.

    I don't care anymore really if this new school is for-profit or private, if that's the only school that I can go to until I pay off my debt then I am willing to go for a semester.
  • juilletjuillet Super Moderator Posts: 11,653 Super Moderator
    You should care. The default rates on for-profit schools are astronomically high, and a lot of non-profit legitimate colleges won't take transfer credits from for-profit schools. If you are planning on transferring from this college to another one later, you may find that you have simply wasted a semester or more of your time and money. A lot of employers also will be wary of a for-profit college degree.

    Many places will not do a payment plan if the loan is past due a certain date. They also have no incentive to, since student loan debt cannot be discharged in bankruptcy. They know that you can't get rid of it, so they have no incentive to work a deal out with you.

    The vast majority of legitimate colleges will not enroll you while you have a financial hold on another college's. On the most practical level, they will require transcripts from all previous colleges, and if you can't provide that then you cannot apply/enroll. On another level, their reasoning is: how do we know she's not going to do this to us?

    In addition to, that I don't see how that would work. Schools can't lend you over the cost of attendance at their school. If you are using your financial aid for tuition, fees, room, board, transportation, books, and supplies, where are you supposed to get "extra" money to repay a loan that you owe?
  • ineffableahimsaineffableahimsa Registered User Posts: 3 New Member
    I see that nobody here is really trying to help me with the ACTUAL question I have.

    I DO NOT want to know whether or not a school will take me without transcripts.
    I DO NOT want to know that how for-profit schools are a bad idea.
    I DO NOT want to hear about how I should go about paying the money back alternatively.
    I DO NOT want to hear about student loan debt as what I owe is NOT a loan.
    I DO NOT want to hear that I will not have enough money left over to pay back the debt as I already have calculated that I will.

    I already know all this stuff, I have researched all that stuff already!!

    I asked a simple question about FAFSA. WILL FAFSA STILL GIVE ME MONEY WITH A FINANCIAL HOLD? If you do not know the answer to that question, don't post.
  • sybbie719sybbie719 Super Moderator Posts: 20,889 Super Moderator

    Fafsa does not give you any money. All they do is determine your eligibility for federal aid. If you have a hold and are not eligible to receive the money that you think you should get due satisfactory academic performance, you could possibly be flagged and the money will may not be disbursed.
  • cptofthehousecptofthehouse Registered User Posts: 26,432 Senior Member
    When you fill out FAFSA, it will generate an EFC for you. If you are eligible for PELL, Stafford loans or any other money, you do have to deal with a college to coordinate getting those funds. The funds do not go directly to you. When you do the next wave of paper work to get that money, you will have to designate which school will get them.

    So if it is a college to which you owe money already, it depends on their policies if they are going to even process the funds so you can get them. Since the funds are for the coming year, they may refuse to lift a finger for anything to do with that time period until you clear up the balance. That is totally up to the school and you have to ask them.

    Now if you have managed to get accepted to a whole other school without those transcripts from the school that is holding them, they will likely process your loans and other money so that they come to your account which will be set up. But a lot of schools won't set up an account or do anything until the transcripts are received . You are in limbo until they are received. But it is possible they are not needed, in which case you are good.

    My son took a couple of college courses before going off to the college of his choice. If he had owed money for those courses, it would not matter a whit for getting any STafford money to his current college because they don't care about those college courses. Yes, they want the transcripts and he won't get credit for the courses until he provides them, but they are not holding up his financial awards to their school for any unfinished business at another school. However, if he were a true transfer student and not just have a couple of extra courses taken during high school, his acceptance to that college could have been put on hold and the money not be processed until his transfer transcript is received. IF your acceptance to another school is dependent on that transcript, the second school might not process your account until you are officially accepted which means that final transcript is needed.

    So all of this comes down to ---it depends on the school. Call the financial aid office and ask if they will process your Staffords and other things that your EFC allows you to have. You may not have to mention the transcript. Just ask what you have to do. But if you are waiting for next school year's money, it isn't going to be released for a while, not till August, I believe.
  • swimcatsmomswimcatsmom Registered User Posts: 15,693 Senior Member
    According to federal aid rules, if you owe money because of a federal grant that you are required to repay you are not eligible for federal financial aid.

    Student Aid on the Web
    To receive aid from our programs, you must... "certify that you are not in default on a federal student loan and do not owe money on a federal student grant."

    I would be a bit cautious with the school that knows you do owe money on a federal grant and tells you you will get aid anyway. My main concern would be that you might register for classes, end up not actually getting any aid, and end up owing them money on top of the the money you owe to the other school.
  • cptofthehousecptofthehouse Registered User Posts: 26,432 Senior Member
    Ineff, I just read your situation. If you owe previous PELL money, it is doubtful you will get any more until you clear up what you owe. I suggest you go to the financial aid people and tell them your situation, and perhaps they can work out something. It just might be possible for them to take out what you owe from your new award, but, I really don't think so. When the government puts a hold on your account for owing money, they usually will not process anything until it is cleared. It is not an issue of the transcripts which is what I thought was the question. Your problem might be what you owe the government, and that you did not complete a set of courses last year. When that happens there are often penalites and a hold before you can get aid again.

    But you need to talk to someone at the new school about this and see what that person can do for you. At least,s/he will be able to tell you what you can do and how long a hold will be there. Maybe you have to pay for courses for a term or a year and complete them successfully before you are eligible for more aid. I know there are consequences, but they do depend on exact circumstances. I know someone who had a similar issue and the aid officer of the new school spelled out exactly what had to be done before any more federal aid was forthcoming.
  • cptofthehousecptofthehouse Registered User Posts: 26,432 Senior Member
    Swimcatsmom, if you bail on courses while on govt aid, is there not some period that you are not allowed to get aid, and have to do something to become eligible again?
  • swimcatsmomswimcatsmom Registered User Posts: 15,693 Senior Member
    If you withdraw from all classes before a certain point in the semester (I think around 60% of the semester), you have to repay certain federal aid such as the Pell grant. Until it is repaid you are not generally eligible for any federal aid. It is not something the school elects to do, but is a requirement under the Federal Financial Aid Return Of Title IV Funds Policy.

    here is a fairly good explanation from the Drexel University website.
    Return of Title IV Funds | Student Resource Center/Financial Aid | Drexel University
    The school and the student share the responsibility for returning Title IV aid. The school returns "unearned" Title IV funds that have been paid to the school to cover the student's institutional charges received from Title IV grant and/or loan programs. If the student owes funds back to the Title IV programs, the institution will advise the student. The student has 45 days from the date of notification from the institution to take action on the overpayment. If the student's portion of unearned Title IV funds included a federal grant, the student has to pay no more than 50% of the initial amount that the student is responsible for returning. Immediate repaying of the unearned loan amount is not required because the student repays the loan to the lender according to the terms or conditions in the promissory note. The institution will advise the lender of the student's withdrawal within 30 days of determining the student withdrew.

    No additional disbursements may be made to the student for the enrollment period. If the student does not repay the amount owed to the Title IV programs or does not make satisfactory payment arrangements with the U.S. Department of Education, Drexel University will report to the National Student Loan Data System (NSLDS) that the student received an overpayment. The student loses eligibility for further Title IV aid until resolved.

    Title IV aid includes all federal financial aid - loans, grants etc. Assuming the original school did report the failure to repay, I am not sure how the new school can say they will award federal funds. I would be very wary.
  • sashawashasashawasha Registered User Posts: 1 New Member
    What's the name of that school so I can go. I am having the same trouble.
  • cptofthehousecptofthehouse Registered User Posts: 26,432 Senior Member
    Sashawasha, it may not be just the school that is the issue. The government may not release the funds if you dropped courses in the middle of a term or had unsatisfactory grades the last time you were in school. Never mind the transcript hold. The source of the money won't release the funds due to the dropping or failing of courses, or owing money that went towards those courses and was lost.
  • JacklynroseJacklynrose Registered User Posts: 2 New Member
    I am happy and sadden to see someone is in the same situation I am. in 2007 I decided to go back to school, I applied for financial aid and was accepted for pell grants. But because I started for spring semester I found out my grants didn't kick in yet so when I started school I had no money for books. I tried to hang in there for 3 weeks but I quickly realized that I wouldn't be able to work full time and go to school full time with the added headache of having to borrow books from classmates I hardly knew..so I went tithe college office and asked them if I could drop my classes and start in the fall, so by that time ill have the pell money and I could buy books and be more prepared. obviously the lady who worked there wasn't not informed on school policies because she told me it would be fine if I did that. four months later I received a bill in the mail for 1500 bucks for the semester I didn't attend. I called the school and they weren't very sympathetic. They told me there was nothing they could do and that I should call fasa because they were the ones who put me on a hold. I found out after that goose chase that fasa doesn't have me on hold it laguardia Cuny that has me on hold because pell didn't pay them since I didn't receive grades for that semester cause duh I dropped it, and because I didn't drop the classes on the first day of the semester I'm am obligated to pay for the semester because my seat is locked in from there. So since I dropped out they couldn't replace me with someone else. This has been a 6 year nightmare. I am so disgusted with what colleges are doing I could of repaid them with my tax refunds but I am just so ****ed off and feel like I was scammed. They don't care that they have forced me into a never ending merr-go-round of I don't get paid enough because I didn't go to college and I can't get a better job till I get a degree but I can't get a degree because a school has blocked me of the opportunity because it wants me to pay in full for a semester I never attended. It doesn't care about giving an education and opportunities to people all it cares about is money we're dollar signs not human beings. They won't even let me repay with a payment p,an or lower the amount owed, and they have the audacity to tell me well after you pay us you can negotiate a payment plan with collections because I owe in collections fees..that's when I gave them u can kiss my you know what look and left there office. That was a year and half ago and I've just been hoping that maybe Obama or someone will take notice to this issue and fix it.
  • JacklynroseJacklynrose Registered User Posts: 2 New Member
    Reading back posts for me I dropped 3 weeks into semester, I asked if I can just pay for the 3 weeks I attended. They told me no because they couldn't replace my seat. I talked with fasa they told me they have no issue with me nor do I owe mo eh to them. They never paid out any money it's Cuny who has me on hold because they lost out on a semester of money. And I did discuss with a counselor before dropping my classes to make sure there wasn't any penalties, it's not my fault they don't train the people working for them to inform pell grant students of this issue. I thought of applying to schools outta state but I'm worried about the stipulation that if u owe any money from fasa you will not be granted money again. But in my case fasa is telling me I don't owe the money to them but the school. So could I be able to apply to other schools and get money from fasa again?
  • sybbie719sybbie719 Super Moderator Posts: 20,889 Super Moderator
    This has been a 6 year nightmare. I am so disgusted with what colleges are doing I could of repaid them with my tax refunds but I am just so ****ed off and feel like I was scammed.

    You need to get over your mad, because while you may be winning the battle, you are losing the war and you will not be able to return to school.

    You would be in a much better situation just to pay the $1500 so that you can be eligible for TAP and Pell (which is going to be more than what you owe) and move forward with your life. Why would you let $1500 get in the way of you getting over $10,000 (this is the amount you would receive if you are eligible for full tap and full pell). The scenario you present is just plain foolish. Borrow the from couple of relatives if you have to. Save a little each week until you get them paid off, but pay them off.

    You will not be able to attend another CUNY or SUNY school until you get this straightened out. With the recent changes in the disbursement of federal aid (moving toward a 6 year limit), it is in your best interest to resolve the issue as quickly as possible.

    Eventually, you will have to pay back the money, whether it is a wage attachment on your job, a major ding on your credit report or the inability to get financial aid in the future. The financial aid office at your new school will see that there has been a financial aid distribution and may end up asking about records from your previous school (which you won't be able to supply because of the hold on your records).
This discussion has been closed.