Federal Student Financial Aid Penalties for Drugs/Law Violation

Federal Student Financial Aid Penalties for Drugs/Law Violation
Under the Higher Education Act, students become ineligible for federal student aid upon conviction during any period of enrollment of any offense involving the possession or sale of illegal drugs. Federal aid includes Federal Stafford Loans, Federal PLUS Loans, and Federal Pell Grants.

Penalties for Drug Convictions
Possession of illegal drugs:

	Possession of illegal drugs	Sale of Illegal drugs
1st offense	1 year from date of conviction	2 years from date of conviction
2nd offense	2 years from date of conviction	Indefinite period
3+ offenses	Indefinite period

Sale of Illegal Drugs:
1. First offense: Two years from the date of conviction.
2. Second and subsequent offenses: Indefinite ineligibility from the date of conviction.

How to Regain Eligibility
If a student successfully completes a drug rehabilitation program, he or she can regain eligibility for federal student aid funds as of the day the student successfully completes the program.
To be sufficient to reinstate financial aid eligibility, the program must include at least two unannounced drug tests and satisfy at least one of the following requirements:
1. Be qualified to receive funds directly or indirectly from a federal, state or local government program.
2. Be qualified to receive payment directly or indirectly from a federally-or state-licensed insurance company.
3. Be administered or recognized by federal, state or local government agencies or the courts.
4. Be administered or recognized by a federally- or state-licensed hospital, health clinic or medical doctor.

Note: the Department of Education has rescinded the student eligibility requirement. The student will no longer faces penalties or suspension of Title IV aid due to a drug conviction that occurred while the student was enrolled and receiving TITLE IV aid; while the information must still be provided, the loss of federal student aid for drug convictions no longer applies.