Facts of the Month

Colleges can deny access to Stafford loan

This was a first for us. We tend to think the federal Stafford student loan is automatic because there is no parent co-signer required and any student that is a citizen or has Permanent Resident (green card) status has access to this loan program. Recently, a student on academic probation was denied access to the Stafford loan. Based on the student’s low grade point average and the number of credits completed, a college has the option to deny access. Our guess is that the college involved considers the student a credit risk and thus could add to their loan default rate.

Publication Date: September 2009