Drug Convictions Can Send Financial Aid Up In Smoke

​Next week will be April 20, otherwise known as 4/20. People in some states may celebrate the occasion thanks to recently relaxed penalties for the use and possession of small quantities of marijuana.

However, college students across the U.S. need to know that many drug convictions can have a big effect on their financial aid. The Student Loan Ranger wanted to make sure our readers are aware of these implications so their financial aid awards don’t end up in smoke.

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What Convictions Count?

Any federal or state drug conviction, whether it be for the possession, conspiring to sell or sale of illegal drugs, can disqualify a student from receiving federal student aid grants and loans. With that said, these convictions will only count against the student for financial aid purposes if the crime was committed during a time when the student was already receiving federal student aid.

Let’s say a student was arrested in January, while enrolled in school and receiving aid, but not convicted until June, when he or she wasn’t enrolled or receiving aid. In this case, that conviction would count toward the student's future aid eligibility.

However, if the arrest happened in June and the conviction occurred the following January, then it would not count against eligibility – assuming the student wasn't enrolled during the summer.

One exception to this rule is for drug trafficking. In these cases, a state or federal judge can specifically deny certain federal benefits, including federal student aid.

Where you attend school doesn’t matter either. If you are convicted of such a crime in one state, but attend school in a different state that does not consider that action a crime, that conviction still counts against your for aid purposes.

How Long Will the Student Be Ineligible?

Up until fairly recently, a single conviction under a drug offense could have resulted in immediate and permanent ineligibility for federal student aid. As of 2009, however, it’s become more of a "three strikes" rule.

Specifically, if a student is convicted of the possession of illegal drugs, he or she loses eligibility for federal aid for one year for the first offense, two years for the second offense and indefinitely for the third.

Selling or conspiring to sell illegal drugs has a slightly shorter leash: After conviction for a first offense, students lose aid eligibility for two years and then lose eligibility indefinitely after their second offense. The clock for the ineligible period starts from the date of conviction, rather than the date of the offense.

Regaining Eligibility

Drafters of this current version of the law were mindful that forcing a student to take a year or two off from school as a result of a lack of financial aid may have unintended consequences, especially when drugs are involved. Therefore, they inserted a caveat that allows first and second offenders to regain aid eligibility early if they complete a qualified drug rehabilitation program. The program has to meet certain requirements, one of which is the passing of at least two unannounced drug tests.

Students who lose their aid eligibility indefinitely can reverse that status by passing two unannounced drug tests that are part of a rehabilitation program, but do not have to complete the remainder of the program.


If you should become incarcerated due to drugs or other offenses, your aid eligibility may become even more restricted. While not eligible for federal student loans, students serving a criminal sentence may be eligible for some federal grants as well as federal work-study. A school or a prison counselor is an incarcerated student’s best resource for navigating this situation.