What To Know If Your College Loses Federal Funding
“Here’s the good news: A greater percentage of students are repaying their federal loans,” according to U.S. News and World Report.
“The most recent three-year student loan default rate dropped from 14.7 percent to 13.7 percent, according to data from the Department of Education.
But for a handful of colleges – and their students – these data come laced with some very bad news.
A group of 21 institutions, mostly for-profit technical and beauty colleges, are on the precipice of losing federal funding unless they successfully appeal. They landed on the list for having default rates topping 40 percent for one year or at least 30 percent for three consecutive years. …
For students enrolled at those schools, losing federal funding could mean several things, depending on what happens to the college. Check to see whether your school is on the list and keep these tips in mind if your school loses federal funding or you want to avoid a risky school in the first place.
You may need to find out about a school’s status on your own. The Department of Education encouraged the at-risk schools to notify students about the possibility of losing funding, but there’s no mandated notification in place, said a department representative in an email. …
You’ll have to find an alternate payment plan. …
Your federal loans may be forgiven. When a school closes, current students and those who have withdrawn within the previous 120 days can qualify for a federal loan discharge if they aren’t completing the program elsewhere.”