Drug convictions and student loans: Here’s what to know
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Drug convictions affect your life in different ways. They hurt your chances of getting a job, finding reliable housing and — until recently — they could also impact your eligibility to receive federal financial aid, including student loans. Here’s what to know about how changes to the Free Application for Federal Student Aid (FAFSA) are making it easier for those with drug-related convictions to gain access to federal student aid.
Am I eligible to receive federal financial aid with a drug conviction?
Thanks to the FAFSA Simplification Act, which was enacted in 2021, students are no longer required to disclose if they’ve been convicted on drug-related charges as part of their FAFSA application. That said, students can still disclose this information if they choose to. However, their answers won’t impact their eligibility to receive federal financial aid. In fact, starting the 2023-24 FAFSA cycle, the question regarding drug-related convictions will disappear altogether from the form to avoid confusion.
How drug convictions used to impact students’ eligibility for federal student aid
Before the FAFSA Simplification Act was enacted, your ability to receive financial aid in college depended largely on your situation. For instance, if you were serving time for a drug conviction, you weren’t eligible to receive a Federal Pell Grant or federal student loans, and opportunities for a Federal Supplemental Educational Opportunity Grant (FSEOG) and work-study are limited. Although these restrictions ended mostly once you had been released, you’d still be asked if you’ve ever been convicted for a drug-related offense while you were receiving federal financial aid as part of the FAFSA. If you had, you’d need to complete a worksheet that the federal government used to evaluate your financial aid eligibility.
How long you remained ineligible for aid, however, depended on the type of conviction and the number of previous offenses. If you were convicted of possessing illegal drugs, the periods of ineligibility were:
- First offense: One year.
- Second offense: Two years.
- Third offense: Indefinitely.
If you were convicted of selling illegal drugs, the periods of ineligibility were:
- First offense: Two years.
- Second offense and beyond: Indefinitely.
If you were convicted of a drug offense after completing the FAFSA, you also risked losing your future eligibility. And, depending on your conviction, you could have been asked to return any money that was awarded to you.
Regaining eligibility for financial aid after a conviction also used to be its own process You usually were asked to complete an approved drug rehabilitation program or pass two unannounced drug tests administered by an approved drug rehabilitation program.
Your eligibility for federal aid — like grants and student loans — will get suspended for at least one year after you’re convicted of a drug offense while receiving financial aid, depending on the offense and the type of conviction. That said, you may be able to regain eligibility early by completing an approved drug rehabilitation program or by passing two unannounced drug tests administered by an approved drug rehabilitation program.
Also note that if your conviction is reversed, set aside or removed from your record, it will not count against your eligibility for federal aid. Eligibility also won’t be impacted by convictions received while you were a juvenile, unless you were tried as an adult.
Other ways to fund college
Federal aid is one of the best ways to fund college. It should be the first place you go to receive scholarships, grants, work-study and federal student loans.
However, financial aid packages can also fall short. If that happens, here are other options you can explore to help you pay for school:
- State and local funding. To access state and local funding, first, you need to fill out the FAFSA. Most state and local funding is need-based, meaning it’s awarded based on economic need and not merit. By filling out the FAFSA, these agencies can get a better grip of what your financial situation looks like and determine your eligibility for aid. You can also explore other types of aid through local and state nonprofits, for-profit businesses and organizations that don’t require the FAFSA.
- Institutional funding. Many colleges offer scholarships, grants and, in some cases, loans to help cover the cost of your education. See what your school offers and what you’re eligible for. You may find that college-level funding is enough to cover most of your education costs.
- Scholarships and grants: Scholarships and grants are money that doesn’t need to be repaid, and you can find free money that isn’t tied to schools or government entities. Scholarships tend to be based on merit, while grants are based on need. You might qualify for both, so it’s important to find as many as you can before looking for student loans.
- Private student loans. Instead of loans coming from the federal government, private student loans come from individual lenders. You’ll need a solid credit score and good credit history to qualify, or a co-signer who meets the requirements.
The bottom line
In the past, having a drug-related conviction meant you were limited when it came to receiving federal financial aid. However, all of that changed in 2021 thanks to the FAFSA Simplification Act. So even if you have a drug-related conviction in your record, you’re still eligible to receive federal financial aid in the form of grants, work-study programs or student loans, just like everyone else.