It’s a question we hear often at College Benefits Research Group (CBRG):
“What could disqualify me from financial aid?”
For families counting on assistance to make college affordable, the idea of losing eligibility or being denied aid outright is understandably stressful.
The good news? Most causes of financial aid disqualification are avoidable.
Whether you’re applying for the first time or renewing aid for another year, understanding what could jeopardize your eligibility is the first step toward protecting your financial future.
Here are the most common reasons students get disqualified from financial aid—and how you can avoid them.
Understanding Financial Aid Eligibility Requirements
To qualify for federal student aid, students must meet a basic set of eligibility criteria. Most disqualifications occur when one or more of these fundamental requirements are not met.
You must:
- Be a U.S. citizen or eligible noncitizen
- Have a valid Social Security number
- Have a high school diploma, GED, or recognized equivalent
- Be enrolled or accepted for enrollment in an eligible degree or certificate program
- Maintain satisfactory academic progress (SAP)
- Not owe a refund on a federal student grant or be in default on a federal student loan
It’s also critical to complete the Free Application for Federal Student Aid (FAFSA) each year accurately and on time.
At CBRG, we work closely with families to ensure they understand these eligibility standards from the start, including how individual college policies may vary.
Major Mistakes on the FAFSA That Can Lead to Disqualification
One of the fastest ways to disqualify yourself from receiving aid is to submit an incomplete or incorrect FAFSA. This form is the foundation of your financial aid package, and errors can delay processing, reduce your award, or even result in denial.
Here are some of the most common FAFSA-related mistakes that lead to disqualification:
Failing to Sign the FAFSA Using Your FSA ID
This may seem like a minor oversight, but forgetting to sign the FAFSA is one of the most common reasons applications get rejected or delayed. Both the student and one parent (for dependent students) must sign using their Federal Student Aid (FSA) ID.
Without these electronic signatures, your application won’t be processed—and your aid may be withheld until it’s corrected. CBRG helps ensure that every form is fully completed and signed before submission to avoid unnecessary setbacks.
Using Incorrect Tax Year Data
The FAFSA requires financial information from two years prior to the academic year for which aid is being sought. This is referred to as the “prior-prior year.” For example, the 2025–2026 FAFSA uses 2023 tax information.
Many families accidentally use more recent data, which can trigger inconsistencies and verification flags. CBRG provides clear guidance on what financial documents to use for each FAFSA cycle, ensuring families provide the correct and complete data.
Not Listing All Colleges to Receive Your Information
When completing the FAFSA, you can list up to 20 colleges to receive your financial aid information. If you leave a college off the list, it won’t receive your FAFSA data, which can lead to delays or missed financial aid offers.
Some families unintentionally omit schools they’re seriously considering. CBRG works with students to create a comprehensive list and ensure each institution receives timely and accurate financial data.
Skipping Required Fields or Entering Inaccurate Information
Incomplete or incorrect responses can cause significant delays—or worse, a rejected FAFSA. This includes skipping required income or household size fields, rounding figures incorrectly, or providing estimates instead of verified numbers.
Mistakes like these can also trigger verification or reduce aid eligibility. At CBRG, we double-check every data point to ensure the FAFSA is completed accurately and comprehensively.
Mistakenly Including Retirement Assets or Home Equity
The FAFSA does not require families to report the value of retirement accounts (like 401(k)s or IRAs) or the equity in their primary residence.
However, many families include this information mistakenly, often due to confusion with tax documents or the CSS Profile, which does ask for home equity.
Reporting these assets can unfairly inflate your Expected Family Contribution (EFC) and lower your aid eligibility.
CBRG helps families understand the difference between required and non-required asset disclosures to avoid costly overreporting.
Another common issue is failing to respond to a verification request. Around 18% of FAFSA filers are selected for verification, and not submitting the requested documentation in time can result in aid denial.
CBRG has helped families recover from FAFSA rejections due to errors like these. In one instance, a client reported that their FAFSA was initially rejected due to an unsigned form. CBRG identified the issue, refiled the corrected application, and the student went on to receive $14,000 in need-based aid.
Academic Reasons You Can Lose Financial Aid
Maintaining eligibility isn’t just about money—it’s also about academics. Federal and institutional aid programs require students to meet Satisfactory Academic Progress (SAP) standards, which include:
- Maintaining a minimum GPA (typically 2.0)
- Successfully completing a minimum percentage of attempted credits (usually 67%)
- Staying within a maximum time frame to complete a degree (e.g., 150% of the program length)
Students who drop too many classes, repeat courses excessively, or perform poorly over consecutive semesters may lose aid eligibility.
At CBRG, we work with families not only on financial strategies but also on maintaining academic progress. We advise students on course load, support resources, and how to proactively address academic issues before they impact aid.
Legal or Criminal Issues That Can Impact Aid Eligibility
While the rules have changed over time, certain legal issues can still affect your ability to receive federal financial aid.
- Past drug convictions no longer automatically disqualify students as of the FAFSA Simplification Act, but colleges may still consider them in other institutional decisions.
- Incarcerated individuals face restrictions, especially for certain types of aid.
- Providing false information on your FAFSA is considered fraud and can result in aid denial or legal consequences.
If you’re unsure whether a legal issue might impact your eligibility, it’s critical to disclose and seek guidance. CBRG offers confidential support in understanding how past events may influence aid and, if appropriate, how to pursue appeals or reinstatement.
Dependency Status and Family Conflicts
Your dependency status on the FAFSA determines whose financial information must be reported. Many students incorrectly assume they’re “independent” when FAFSA rules still consider them dependent, which can result in an incomplete application and aid denial.
You may be considered independent only if you:
- Are 24 years old by January 1 of the school year
- Are married or have dependents you support
- Are a veteran or active-duty service member
- Were in foster care, legal guardianship, or considered an unaccompanied youth
Family situations such as divorce, remarriage, or estrangement can further complicate things. For example, if your custodial parent is remarried, you must include your stepparent’s income, even if they don’t contribute financially.
CBRG specializes in helping families determine the correct dependency status and navigate complex filing scenarios. We also help students document unusual circumstances that may qualify them for a dependency override through their college’s financial aid office.
Losing Aid Due to Changes in Financial Circumstances
Financial aid eligibility is based on the information you report on your FAFSA, but that doesn’t mean your situation won’t change. Increases in income, receiving a large inheritance, or acquiring significant new assets can change your aid eligibility in future years.
Additionally, receiving external scholarships or aid from other sources may reduce your need-based financial aid, depending on your college’s coordination policy.
CBRG supports families year-round, not just at FAFSA time. When financial changes occur, we conduct a full aid review and help families prepare appeals or updated financial statements to maintain or maximize eligibility.
What to Do If Your Financial Circumstances Change
If your family’s financial situation changes significantly after submitting the FAFSA—whether due to a job loss, medical emergency, death in the family, or another hardship—you can request a financial aid adjustment by contacting your college’s financial aid office.
This process, often referred to as a professional judgment or special circumstances appeal, allows the school to review your current financial situation and potentially adjust your aid package.
To initiate this process, you’ll need to:
- Gather documentation that supports your financial change (e.g., termination letters, medical bills, tax returns, or bank statements)
- Submit a formal letter or use your school’s appeal form
- Work directly with the financial aid office and respond to any additional requests for information
CBRG helps families craft compelling, well-documented appeals that clearly communicate the impact of their changed circumstances.
We also help ensure all supporting materials are included and follow up on behalf of families when appropriate.
With the right guidance, many students are able to recover or increase their aid eligibility despite unforeseen changes.
FAQs: About Losing or Being Denied Financial Aid
You may lose eligibility, but many schools offer probation periods or appeal options. CBRG helps students file academic appeals and recovery plans.
Yes, in many cases. Students may reapply after regaining satisfactory academic progress or resolving documentation issues.
Determine the cause (often a missing signature or verification issue), correct it promptly, and resubmit. CBRG can assist with review and resubmission.
Yes. If you’re considered independent due to marriage, your spouse’s income will be factored in.
Unfortunately, FAFSA requires parent info unless you qualify as independent. In rare cases, a dependency override may be granted.
Not usually, but it depends on the issue. Fraud, for example, can have lasting consequences. CBRG helps students address and document legal histories as needed.
No. Some sources, like retirement accounts and primary home equity, are not required. CBRG helps families understand what counts and what doesn’t.
How CBRG Helps Families Navigate the Financial Aid Process
Navigating financial aid successfully requires more than just filling out a form. It takes strategy, foresight, and a deep understanding of how the system works. CBRG offers hands-on, personalized guidance for families to:
- File the FAFSA and CSS Profile accurately and on time
- Avoid disqualifying errors and misreporting of financial data
- Understand how to report complex family financial structures
- Respond to verification requests or corrections quickly
- Appeal aid decisions effectively
- Stay eligible for aid across all four years of college
Our expert advisors have helped thousands of families reduce college costs and unlock more financial aid through proper planning.
Whether you’re facing a rejected FAFSA, a sudden change in income, or just want peace of mind that you’re doing it right, CBRG is your trusted partner in the college planning process.
Schedule a consultation with our team today and find out how we can help you maximize your aid eligibility and build a smart college funding strategy.