Not everyone finishes college their first time around. Sometimes, you have to go back to school to get your degree—and sometimes, money stands in the way of this.
Of course, returning students have the same federal loan options as anyone else; however, they may also have some additional factors that affect their aid. If you want to return to school and can’t pay out of pocket, here are three things that you will need to think about.
1. Are Your Credits Still Good?
Why is this important? Well, other than the fact that you don’t want to have to pay for the same class twice, the number of credits you have will determine how much you are eligible for in federal student loans. The more credits you have, the more you can borrow.
So, are yours good? It depends. If you return to the same school, check the school’s policies on how long you can use your credits toward a degree. Some schools restrict credit lives, meaning you can apply credits toward a degree or certificate for only a certain amount of time. For example, your credits are good for 10 years after you earn them. After that, you need to retake the class to get the credits again.
If you go to a new school, check to see if it will accept any of your previous credits. Again, this will all be up to the discretion of the school and its policies. Either way, the registrar’s office is usually a good place to go with these questions. Every school will be different, so find out what you’re dealing with as early as possible.
2. Do You Have A Student Loan Default?
Once you’ve figured out if your credits are still good, you need to make sure that you are eligible for financial aid. I’m not just talking about filling out your Free Application for Federal Student Aid (FAFSA). You can’t receive federal financial aid (that includes Pell grants) if you have federal student loans in default. You will have to clear that up before you can again be eligible for federal and (most) state aid.
Even if you aren’t receiving phone calls or letters, you could have a federal student loan in default. Your loan holders may just not know where to find you. Go to the National Student Loan Database System (NSLDS®); it will list all of your federal student loans, who holds them, and their status. If any are in default, contact that loan holder ASAP to get the loan back in good standing. (Learn how to do that here.) Once all of your loans are out of default, you become eligible for aid again.
Note: If you decide to rehabilitate your loan, you will regain federal student aid eligibility after making six payments. Just make sure you keep making those rehabilitation payments after that, or you will lose eligibility again.
3. How Do You Get Student Loans Again?
If everything checks out with questions one and two, don’t just expect your school to automatically apply student loans to your account. If it’s been a while since you were in school or you are going to a new school, you may have to complete new loan paperwork.
Stafford and PLUS loan master promissory notes (MPNs) are only good for 10 years. If you return to school more than 10 years after you signed your first MPN, you’ll need to complete a whole new one. Some schools will also require you to complete an MPN every year or will require an MPN signed or entrance counseling completed at their school to disburse your funds.
Your financial aid or bursar’s office will be able to let you know what their policies are. They can also check to see if you have a valid MPN on file with the Department of Education.
So, What Are You Waiting For?
When there’s a will, there’s a way, right? Nothing should stop you from going back to school if that is what you want to do. Talk to your school about your financial situation. Hopefully, your transition back to school will be as graceful as Rodney Dangerfield’s was!
Are you thinking about heading back to school? What questions do you have?