Federal Student Financial Aid Penalties for Drug Law Violations

Important Update: Effective with the 2023-2024 academic year, the U.S. Department of Education has rescinded the student eligibility requirement and a student no longer faces penalties or suspension of Title IV aid due to a drug conviction that occurred while the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. All references to Drug Convictions were removed and no longer impact a student’s ability to receive Title IV aid.  

The Department of Justice may place a processing hold on the Free Application for Federal Student Aid (FAFSA) for some students who have been convicted of possession or sale of illegal drugs based on prior judgments.  To resolve the hold, a student must call the Department of Education at 202-377-3889 or email applicationprocessingdivision@ed.gov.  This information is also provided upon submission of the FAFSA if it is application to the student.  

Original Policy: The Higher Education Act of 1965, as amended, states that a federal or state drug conviction can disqualify a student for Federal Student Aid funding (grants, loans, and/or work study). The student self-certifies in applying for aid (when completing the Free Application for Federal Student Aid, FAFSA) that he/she is eligible. 

Convictions only count if they were for an offense that occurred during a period of enrollment for which the student was receiving Federal Student Aid—they do not count if the offense was not during such a period. Also, a conviction that was reversed, set aside or removed from the student's record does not count, nor does one received when he/she was a juvenile, unless he/she was tried as an adult. 

If you are convicted of a drug offense after you submit the FAFSA, you will lose eligibility for federal student aid, and you may be liable for returning any funds received during the period of ineligibility. 

This chart illustrates the period of ineligibility for FSA funds, depending on whether the conviction was for sale or possession and whether the student had previous offenses. (A conviction for sale of drugs includes convictions for conspiring to sell drugs.) Possession of Illegal Drugs Sale of Illegal Drugs.