Found out I have a 15-year-old defaulted FAFSA loan - will this affect my daughter's financial aid eligibility?

First, take a deep breath. This happens more often than you'd think. For your immediate question - no, you don't need to pay it tonight. However, you DO need to address it quickly because yes, it can affect your daughter's FAFSA. When you're in default on a federal student loan, it can prevent your daughter from receiving federal student aid until you resolve the default status. You have several options to address the default: 1. Pay it in full (since it's under $300, this might be your easiest option) 2. Set up a rehabilitation plan 3. Consolidate the loan As for the first-generation status, that's determined by whether you completed a bachelor's degree, not whether you took some classes or had loans. If neither parent has a bachelor's degree, she's still considered first-generation.

omg this EXACT thing happened to my sister last year!!! she found out she had some old loan from a community college class she took in like 2008 that she thought was covered by some program. her son's fafsa got all messed up because of it. took them forever to get it straightened out and they missed some deadlines for scholarships bc of it. definitely take care of it asap!!!

To get specific about the timeline - your daughter's FAFSA won't be automatically rejected if you're in default, but your default status will be flagged when they process her application, which can delay or complicate things. Important point: Your default status matters most if your daughter is considered a dependent student and needs your financial information on her FAFSA. If she qualifies for independent status, then your loan default won't affect her eligibility. Since you mentioned the loan is only around $300, I'd recommend calling the loan servicer directly and asking about their "loan rehabilitation" program specifically for defaulted loans. With a loan that small, they might offer very reasonable terms to get it out of default quickly. You'll want to get documentation showing you've addressed the default that you can provide if there are any questions about your daughter's FAFSA.

The rehabilitation process usually requires 9 on-time monthly payments to get out of default... but that wont work for your timeline! Since its such a small amount, paying in full is DEFINITELY your best option. Once you pay it off, request a "paid in full" letter immediately. Usually takes 30 days for the systems to update but having documentation is key. With FAFSA they always look for any excuse to reduce aid! Happened to my cousins kid last yr - he got WAY less money because of some stupid paperwork thing. The whole system is designed to screw us over!!

Have you been trying to reach Federal Student Aid directly? If so, I feel your pain - their wait times are awful. I spent 2 weeks trying to resolve a similar issue with an old loan I didn't know about. Finally discovered Claimyr.com which got me connected to an FSA agent in under 5 minutes. They have this service that basically waits on hold for you then calls when an agent is available. Saved me hours of frustration! They have a video demo at https://youtu.be/TbC8dZQWYNQ that shows how it works. Worth it when dealing with urgent loan default issues that could affect your daughter's aid.

Yes! Calling the loan servicer directly is critical. When I discovered my default status, I found that actually explaining my situation to a real person made a huge difference. In your case, specifically ask about the "default resolution options for small-balance loans." They have special procedures for loans under $500 that can expedite the process. Also, make sure to request that they send you an official default resolution confirmation letter via email immediately after payment. You can upload this to your daughter's FAFSA as supporting documentation if needed. Lastly, while your default doesn't affect your daughter's first-generation status (which is about degree completion, not loans), it can impact her Expected Family Contribution (now called the Student Aid Index or SAI) calculation if the default isn't resolved.

lol dont stress about it. my dad had like 3 defaulted loans when i did my fafsa last year and i still got a full pell grant. they dont actually check that stuff half the time tbh

Update: I was able to call my loan servicer this morning and explained the situation. They confirmed I have a $278 loan from 2010 that went into default in 2012. The representative was actually really helpful and said that since it's such a small amount and given the unusual circumstances, they can offer me a one-time payoff option that would immediately clear the default once processed. I'm going to pay it off on Friday when I get paid. They're also sending me a confirmation letter I can use if there are any issues with my daughter's FAFSA. Thank you all for the advice and encouragement!

good for u!! just make sure u save ALL the paperwork they send u and take screenshots of everything. my sis had to send proof like 3 different times cuz they kept "losing" it 🙄

Welcome to this community! As someone new to navigating the FAFSA process, I'm really glad I found this discussion. It's reassuring to see how supportive everyone is here and how many people have dealt with similar unexpected loan situations. @FireflyDreams, your story really highlights how important it is to check for any old accounts before starting the FAFSA process. I'm going to make sure to do a thorough search of my own financial aid history before helping my kids with their applications in the future. Thanks to everyone who shared such detailed and helpful advice - this thread is going to be a great resource for other parents who might find themselves in similar situations!

As someone who just joined this community, I'm amazed at how helpful everyone has been in this thread! @FireflyDreams, your situation sounds incredibly stressful but it's great that you got it resolved so quickly. This whole discussion has been eye-opening - I had no idea that old vocational training could result in federal loans that might affect future FAFSA applications. The advice about checking the National Student Loan Data System and keeping multiple copies of all documentation is so valuable. I'm definitely going to share this thread with other parents in my area who are starting the college prep process. It's scary how easy it is to have forgotten loans lurking in the system!

As a newcomer to this community, I'm really grateful to have found this thread! @FireflyDreams, your experience is both eye-opening and terrifying - I can't imagine the shock of discovering a 15-year-old loan you never knew existed right when you're trying to help your daughter with college applications. What strikes me most is how this highlights a gap that many parents probably don't even know exists. The fact that vocational training programs can result in federal loans that later impact your children's FAFSA eligibility is something I wish was more widely known. I'm planning to do a comprehensive check of my own financial aid history before my youngest starts the college application process in two years. The detailed advice everyone has shared here about loan rehabilitation, small-balance resolution options, and the importance of documentation is incredibly valuable. This community seems like such a supportive resource for navigating these complex financial aid challenges!