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    FAQ: Colorado Criminal Law – The Loss of Federal Student Loans, Financial Aid and Other Benefits and Assistance for Drug Convictions

    One of the most devastating impacts on a Colorado Drug Related Conviction is the loss of Federal and State Student Financial Aid Benefits

    If a student is convicted of a federal or state offense involving possession or sale of a controlled substance, the student will be ineligible to receive student aid for specified periods of time.

    The Higher Education Act of 1965, as amended, provides for the suspension of certain federal higher education benefits to students who have been convicted for the possession or sale of a controlled substance under federal or state law.

    The controlled substance offense may be either a felony or a misdemeanor. Federal higher education benefits that are denied to such individuals include student loans, Pell Grants, Supplemental Educational Opportunity Grants, and the Federal Work- Study program.

    The Higher Education Act provision outlines different periods for which such drug offenders are ineligible to receive certain federal higher education benefits, depending upon the type and number of controlled substance convictions. The period of ineligibility begins on the date of conviction and ends after a specified interval. 20 U.S.C. 1091 – Student eligibility

    …

    (r) Suspension of eligibility for drug-related offenses

    (1) In general

    A student who is convicted of any offense under any Federal or State law involving the possession or sale of a controlled substance for conduct that occurred during a period of enrollment for which the student was receiving any grant, loan, or work assistanceunder this subchapter and part C of subchapter I of chapter 34 of Title 42 shall not be eligible to receive any grant, loan, or work assistance under this subchapter and part C of subchapter I of chapter 34 of Title 42 from the date of that conviction for the period of time specified in the following table:

    If convicted of an offense involving:

    The possession of a controlled substance  Ineligibility period is:

    First offense 1 year

    Second offense 2 years

    Third offense Indefinite.

    The sale of a controlled substance: Ineligibility period is:

    First offense 2 years

    Second offense Indefinite

    Rehabilitation

    A student whose eligibility has been suspended under paragraph (1) may resume eligibility before the end of the ineligibility period determined under such paragraph if—

    (A) the student satisfactorily completes a drug rehabilitation program that—

    (i) complies with such criteria as the Secretary shall prescribe in regulations for purposes of this paragraph; and

    (ii) includes two unannounced drug tests; or

    (B) the conviction is reversed, set aside, or otherwise rendered nugatory.

    (3) Definitions In this subsection, the term “controlled substance” has the meaning given the term in section 802(6) of Title 21.

    Student loans include the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan Program.  Higher education institutions usually participate in one or the other program. Depending upon the student’s estimated financial need, students may qualify for subsidized Stafford loans or, irrespective of financial need, unsubsidized Stafford loans, through either program. 

    Pell Grants are federal grants that are awarded to students with financial need who have not received their first bachelor’s degree or who are enrolled in programs that lead to teacher certification or licensure. Supplemental Educational Opportunity Grants are awarded for the purpose of providing grants to needy undergraduate students. The Federal Work-Study program provides part-time employment to needy undergraduate and graduate students attending participating institutions.

    According to Department of Education data on applicants for federal post secondary education assistance for the academic years from 2001- 2002 through 2003-2004, less than 0.5 percent on average of the roughly 11 million to 13 million applicants for assistance reported on their applications that they had a drug offense conviction that made them ineligible to receive education assistance in the year in which they applied.

    These numbers do not take into account the persons who did not apply for federal post secondary education assistance because they thought that their prior drug convictions would preclude them from receiving assistance or any applicant who falsified information about drug convictions.

    Federal Student Assistance

    In order to receive federal grant, loan or work assistance a person may not have been convicted of a drug offense while that person was receiving federal student aid. 20 U.S.C. 1091(r).

    This includes Federal Pell Grants, Academic Competitiveness Grants, Federal Stafford Loans, Federal PLUS Loans, Federal Work Study, and Perkins Loans.

    A student can regain eligibility by completing a drug rehabilitation program.

    States have no authority to opt out of this requirement.

    A person may not claim the tax benefits of the Hope Scholarship Credit for an academic period if he or she “has been convicted of a Federal or State felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within” which the academic period ends. 20 U.S.C. 25A(b)(2)(D).

    This Higher Education Act provision allows for eligibility for federal higher education to be restored prior to the end of the period of ineligibility if either one of two conditions is met. First, a student satisfactorily completes a drug rehabilitation program that includes two unannounced drug tests and complies with criteria established by the Secretary of Education. Second, a student has his or her drug conviction reversed, set aside, or nullified.

    The provisions of federal law mandating the denial of certain federal higher education benefits were implemented beginning in July 2000 by requiring students who applied for federal assistance to self-report disqualifying drug convictions. Students must self-report disqualifying drug convictions through the Department of Education’s Free Application for Federal Student Aid, a form that any student who wishes to receive federal student aid must complete.

    ED uses the information that applicants provide on their FAFSA to determine their eligibility for aid from the Federal Student Aid (FSA) programs. Colleges and universities in 49 states also use information from the FAFSA in making their financial aid determinations. ED provides participating colleges and universities with a formula to use when making decisions about financial assistance.

    Applicants who either report that they have a drug conviction that affects their eligibility or those applicants who do not answer the question about drug convictions are automatically ineligible to receive federal higher education assistance in the academic year for which they sought aid.

    The drug conviction worksheet of the FAFSA also notifies students that even though a drug conviction may render them ineligible to receive federal higher education assistance in the application year, individuals may still be eligible to receive aid from their state or their academic institution.

    For several reasons, not all of the FAFSA applicants who self-report a disqualifying drug conviction would otherwise have been eligible to receive federal assistance; hence, the number of applications containing self-reported disqualifying drug offenses overstates the number of persons denied federal post secondary education assistance because of a drug offense conviction.

    First, not all FAFSA applicants are eligible to receive all types of federal post secondary education assistance. For example, some applicants may have incomes above the levels required to receive Pell Grants, and even if they self-reported a disqualifying drug conviction, they would not have been eligible to receive Pell Grants. Second, ED officials indicated that not all FAFSA applicants become enrolled in post secondary education institutions, and these applicants are not eligible to receive federal post secondary education assistance. Third, some individuals may complete the FAFSA application more than one time, and by counting only the number of applications, some individuals may be double-counted.

    To assess the impacts of the Higher Education Act’s provisions that render students with disqualifying controlled substances convictions ineligible to receive federal post secondary education assistance, we estimated the number of students who self-reported a disqualifying drug offense and, absent the controlled substances convictions provisions of the Higher

    Education Act, would have been qualified to receive assistance but because of the provisions would not have received assistance.


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    ___________________________
    H. Michael Steinberg Esq.
    Attorney and Counselor at Law
    The Colorado Criminal Defense Law Firm of H. Michael Steinberg
    A Denver, Colorado Lawyer Focused Exclusively On
    Colorado Criminal Law For Over 40 Years.
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    8400 East Prentice Ave, Penthouse 1500
    Greenwood Village, Colorado, 80111
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