What to Do If You're Denied a Student Loan

• Why you can be denied student loan aid
• Whether you can re-apply for student loans
• What you can do if you are denied a student loan
• Other ways to finance higher education.

Can You Be Denied a Student Loan?

Reasons You Might Be Denied a Federal Student Loan

1. You Don’t Meet Basic Eligibility Requirements

• Having a high school diploma or equivalent certificate that lets you qualify for college enrollment
• Being accepted as a regular student at an eligible higher education program
• Having a Social Security number
• Being a U.S. citizen or U.S. national, or have one of the below: 
  • Green card
  • Arrival-Departure Record
  • Battered Immigrant Status
  • T-visa.
• Submitting a signed Free Application for Federal Student Aid (FAFSA) certifying that you’re not in federal student loan default nor do you owe a federal grant, and that you’ll use federal aid for educational expenses.

2. Your Satisfactory Academic Progress Dropped

3. You’re Incarcerated

3 Top Reasons You Might Be Denied a Private Student Loan 

1. You Have No Credit or Adverse Credit

2. Your Total Financial Aid Already Covers Your Cost of Attendance

3. You Have a High Debt-to-Income Ratio

What Can You Do If You're Denied a Student Loan?

• If you believe you were denied for student loans in error, you can appeal the decision through a process called a professional judgment. However, this action is typically only applicable if you or your family have experienced an extenuating circumstance that affects your financial picture. 

• You might also address getting the right documentation (such as obtaining eligible non-citizen status, for instance) if that was the issue.
• If the issue is your GPA, then accessing help via academic support services at your school may help you get back to better standing.

• If your credit score is the issue, you can work on improving it. One of the key contributors to your credit score is paying bills on time. By automating bills payments, you may be able to make sure you pay them on time and possibly then possibly lift your score.
• Perhaps what triggered the rejection was your debt-to-income ratio. In that case, you will likely want to find ways to lower your debt, increase your income, or both to resolve that issue. 
• You might also see if you could have a cosigner on the loan to present a more credit-worthy package. Typically, a consigner is a relative.

Can You Reapply For Student Loans?

Alternative Ways to Pay for College

• Scholarships: As a type of gift aid, scholarships don’t need to be repaid. They are offered through federal, state, local, and educational institutions, as well as through private businesses and nonprofit organizations. Browse merit- and need-based financial aid on scholarship sites, like Fastweb and Scholly to discover programs. 
• Grants: Grants are another type of gift aid that typically doesn’t need to be paid back. However, some grants, like the Federal TEACH Grant, must be repaid if you don’t fulfill its service obligation. Ask your financial aid administrator for more information about grants you might be eligible for.
• Part-time work: Securing a part-time job is another way to pay your way through school. There might be on-campus jobs at your school which generally offer flexible schedules for its student-employees. Additionally, you can find a remote job or search for local, off-campus employment to fill financial gaps if you were denied student loan aid. 

The Takeaway