Defaulted loan/Pell Grant eligibility

February 21, 2013 7:41 AM

My daughter has a long-defaulted student loan. I am thinking of using my tax refund to pay off this loan, but I am wondering, will paying it off restore her eligibility for a Pell Grant right away? Or is there some kind of waiting period?

Their website says you can't have a student loan in default to be eligible, but I'm wondering if there is any fine print that addresses a recently-paid default.

I'm pretty sure she qualifies otherwise. She's 25, doesn't have a job, and has never received any grants for school before.

posted by Serene Empress Dork to Education (3 answers total)

She will need to work with her financial aid office. Most likely they'll ask her to get a letter from her lender once she is out of default stating that she now has Title IV eligibility (the type of aid that pell grant falls under), that should restore her pell eligibility.

Every school is a little different though. She needs to contact her school and ask them directly if this will allow her to get pell again.
posted by Think_Long at 7:46 AM on February 21, 2013

I used to work in financial aid. Our school just needed proof that the loan is no longer in default. This is documentation that you get from her lender. But as Think Long says, rules differ from school to school.

When you talk to her school, ask if she is otherwise eligible. Not having a loan in default is just one component of eligibility. Does she have a Bachelors degree already? If so, she doesn't qualify.
posted by daisies at 9:14 AM on February 21, 2013

Thank you, your answers are helpful.
posted by Serene Empress Dork at 12:17 PM on February 21, 2013