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 and finding reliable housing. Until recently, it could also impact your eligibility to receive federal financial aid, including student loans.

Changes to the Free Application for Federal Student Aid (FAFSA) are making it easier for those with drug-related convictions to access 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. In fact, in the 2023-24 FAFSA cycle, the question regarding drug-related convictions disappeared altogether from the form to avoid confusion.

While students can still choose to disclose this information, a drug conviction won’t impact their eligibility to receive federal financial aid.

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 were limited. Although these restrictions usually ended once you had been released, you’d still be asked about your conviction on the FAFSA. If you had a conviction, you’d need to complete a worksheet the federal government used to evaluate your financial aid eligibility.

However, the length of time you remained ineligible for aid depended on the type of conviction and the number of previous offenses. If you were convicted of a drug offense after completing the FAFSA, you also risked losing your future eligibility. Depending on your conviction, you could have been asked to return any money that was awarded to you.

Regaining eligibility

Regaining eligibility for financial aid after a conviction also used to be its own process. You typically needed to complete an approved drug rehabilitation program or pass two unannounced drug tests administered by an approved drug rehabilitation program.

Now, your eligibility for federal aid — like grants and federal student loans — won’t be suspended even if the conviction occurred while receiving financial aid.

Other ways to fund college

Federal aid is one of the best ways to fund college. It should be the first place you look for scholarships, grants, work-study and student loans.

If financial aid packages fall short, here are other options you can explore to help pay for school:

• State and local funding. To access state and local funding, you’ll first 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 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 limited your eligibility for federal financial aid. In 2021, that changed thanks to the FAFSA Simplification Act. So even if you have a drug-related conviction on 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.