Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 13, 2011

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To be eligible for federal student loans a student must be a U.S. citizen, have a social security number, and make a signed declaration your student loans will only be used for educational purposes. In addition to those legal requirements, student must also meet certain educational requirements, have financial need, or have unusual family circumstances.


Education requirements


According to the U.S. Department of Education, students applying for federal student aid must prove they are qualified to enroll in a postsecondary educational institution by satisfying one of the following:

  • Having a high school diploma or General Educational Development (GED) certificate.
  • Complete high school education in a state-approved homeschool setting
  • If a student does not have a diploma or GED, they can take and pass an ability-to-benefit (ATB) test.
  • If none of the above mentioned options have been met, the postsecondary school itself can approve a student for attendance on an individual basis
  • Meet certain state-specific requirements


How is financial need determined?


Financial need is determined by subtracting one’s expected family contribution (EFC) to their education from the total cost of attendance at a postsecondary school.


A student’s EFC is determined by their family’s annual income, assets owned, and size. From that information, the government establishes a predicted EFC.


For instance, if a particular college cost $10,000 for one year, and a student’s EFC is $2,000, then the financial need would be a total of $8,000.


The amount of money granted in federal student loans depends largely on an individual’s financial need.


Unusual family circumstances


While the formula for financial need is the same for everyone regardless of race, gender, income, and family background, federal student loan administrators can use professional judgment to adjust the final product of the financial need formula based on unusual family circumstances. The administrator must have good reason to make any adjustment, and all changes must be supported by documentation. Some of the acceptable reasons include a student have family members who are:

  • In nursing homes where expenses are not covered by insurance
  • Under dependent care
  • Dislocated workers
  • Become homeless


Other Circumstances


There are additional federal student loan programs and opportunities to those students with certain intellectual disabilities. If a student has an intellectual disability, they can qualify for these helping programs so long as they:

  • Are enrolled or have been accepted to enroll in a program that will award degree or certificate for students with intellectual disabilities
  • Maintain satisfactory progress
  • Meet other eligibility requirements


Finally, if a student’s parent or guardian was in the military and has since been killed in Iraq or Afghanistan, that student may receive financial aid if the student was less than 24 years old when their parent or guardian died, or if they were enrolled at a postsecondary institution less than full time.