Student Loan Eligibility & Criminal Convictions

Even a good student can find him or herself on the “wrong” side of the law. When that happens, it doesn’t just affect your record–it affects your eligibility to receive student loans. Let’s explore further:

How can a criminal conviction affect my student loan eligibility to receive Federal Aid?

A criminal conviction can have a serious impact on your eligibility to receive federal loans and grants to attend college.

If you are convicted and incarcerated:

Simply stated: if you are convicted of a crime and sentenced to a period of incarceration in a Federal or State institution, you become ineligible to receive Federal Pell Grants or Federal Student Loans.

You are still eligible to receive Federal Supplemental Education Opportunity Grants (FSEOG) and Federal Work Study (FWS), but your chances of receiving them will be diminished. Why? The government prioritizes the FSEOG to those who also qualify for Federal Pell Grants. Since you cannot receive Pell Grants, you will not be prioritized for FSEOG. Yes, you may still be able to receive one, but your chances–unfortunately–decrease.

Similarly, you won’t be disqualified from a Federal Work Study, but being incarcerated makes it much harder for you to obtain and perform a FWS job.

Keep in mind that if you are placed in a facility that is not a Federal or State institution, you are still eligible to receive a Federal Pell Grant, but not Federal Student Loans. FSEOG and FWS are still available, but they are less likely to be offered.

Once you are released from incarceration, most eligibility limitations will be removed.

If you are convicted for a drug offense or sexual offense:

If your conviction was for a drug offense or a sexual offense, then your student loan eligibility will still be limited–even after you are released from prison. Similarly, your eligibility can be suspended if your conviction for a drug-related offense occurred while you were receiving federal student aid.

To regain eligibility after a drug-related suspension, you must successfully complete an approved drug rehabilitation program, or pass two unannounced drug tests administered by an approved drug rehabilitation program.

The type of conviction and when it occurred is crucial in determining your eligibility for financial aid.  According to the Office of National Drug Control Policy U.S. Department of Education, if you are convicted of possession of a controlled substance, you lose eligibility for federal student aid. However, the duration for which you lose eligibility will vary based on this being your first offense or a repeat offense:

• First Offense: You lose eligibility for federal student aid for one year.
• Second Offense: You lose eligibility for two years
• Third Offense: You lose eligibility indefinitely

A conviction for the Unlawful Possession of Marijuana (UPM) will result in ineligibility for any federal student aid; however, you may regain eligibility through the same process as for a conviction for other drug-related offenses.

In New York State, UPM is considered a violation, and not a misdemeanor, but the federal legislation was written to include all convictions involving the possession or sale of controlled substance.  This means that even though UPM is not considered a crime in New York, it is still a drug-related offense and therefore subject to the same consequences as a criminal offense.