How Drug Convictions Affect Student Loans

Are you ready to move forward with your education? Hoping to go back to college to prepare for a successful next step — yet a drug or criminal conviction is a stumbling block in financing that education?

A federal or state conviction for possession of illegal drugs, conspiring to sell them or selling them may disqualify you from receiving federal student aid, including grants and new student loans. But that doesn’t mean federal educational financing is completely off the table. Pell Grants, Federal Supplemental Educational Opportunity Grants, federal work-study and federal student loans may be obtained if you know what to do and where to turn for information to see if you qualify.

Here are some key things to keep in mind as you move forward in securing financing for college.

When you apply for federal student loans, you will have to complete the Free Application for Federal Student Aid, or FAFSA, which asks if you had any drug-related convictions while you were receiving federal student aid. If you answer “yes,” you are asked to fill out a worksheet that will help determine whether your conviction affects your eligibility for new federal student aid.

[Read: An Ultimate Guide to Understanding College Financial Aid.]

Note that if you get convicted of a drug-related crime after submitting the FAFSA, you could lose aid eligibility and may have to return funds you received during the period you are determined to be ineligible.

If time has passed, a drug conviction may not be an issue at all. Convictions only count against financial aid if the crime was committed while you, as a student, were receiving federal student aid. If you are on probation or parole or living in a halfway house, you may be eligible for federal student aid.

Read up on federal student aid eligibility requirements to fully understand your options if you have a drug conviction, and consider taking the following actions.

Make a Change to Regain Aid Eligibility

In some cases, students who have had their federal financial aid eligibility suspended can get out of this status early by passing two unannounced drug tests administered by an approved drug rehabilitation program, or by completing such a program.

[Read: Understanding the Types of Federal Student Loans Available.]

Contact your school’s financial aid office right away if you regain aid eligibility during the award year so that you can get any aid for which you may be eligible.

Understand How Long Aid Ineligibility May Last

Under current rules, if you are convicted of drug possession, you have one year of federal student aid ineligibility from the date of conviction. A second conviction earns two years of ineligibility. A third offense suspends your eligibility indefinitely.

A conviction for selling drugs means two years of ineligibility for the first offense and indefinite suspension for second and subsequent convictions.

Look Into Reversing the Conviction

Students denied eligibility for an indefinite period can regain it if a criminal conviction gets reversed, set aside or removed from their record.

But remember that everyone’s situation is different. Check with relevant legal resources to understand your specific set of circumstances.

Research Other Funding Options

If you were incarcerated due to illegal drugs or certain other offenses, your student aid eligibility may be more restricted. While not eligible for federal student loans, students serving a criminal sentence may qualify for some federal grants as well as federal work-study. It is worth looking into these options.

Even if you are ineligible for federal aid, you should still fill out the FAFSA, since most colleges and states use information on the form to award nonfederal aid. You might be able to obtain some of these nonfederal funds.

Most important, you need to know your financial aid options and eligibility as someone with a drug conviction. A conviction status may complicate your aid options, but it doesn’t have to dictate or define your future. If you have a drug or other criminal conviction in your past but are looking to work toward a brighter future, a financial or educational counselor can be your best first step.

[Read: Ban the Box: Opening the Door to College for Felons.]

There are resources available for people in various circumstances — including options for those currently in prison, and for their children, to help fund their education.

A good place to start exploring your options is a free consultation with an organization certified by the National Foundation for Credit Counseling. A conversation with a counselor at an independent, nonprofit resource is a good way to begin to assess your situation and create an action plan to move forward.

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