Federal Student Aid FAQs
The Department of Education has resumed collections May 5, 2025 on its defaulted federal student loan portfolio.
If you fail to make (and comply with) other arrangements to repay the debt, which could include entering into a loan rehabilitation agreement, ED can use a variety of methods to collect your defaulted federal student loan such as withholding money from the following sources of income:
your income tax refund and other federal payments
your wages
To resolve a default, you have the following options
Repaying the defaulted loan in full
Rehabilitating your loan(s)
Consolidating your loan(s)
For information and assistance to help resolve defaulted loans assigned to the Department’s Default Resolution Group visit https://myeddebt.ed.gov/.
Log into StudentAid.gov using your StudentAid.gov username and password:
Determine the amount you borrowed
Update your contact information
Review the status of your loans
Note your loan servicer contact details
Once you have established what you owe and the statuses of your loans review loan repayment options.
Federal student loan servicers are private companies contracted by the U.S. Department of Education to manage the day-to-day functions of federal student loan repayment by:
collecting payments
assisting with repayment plans
providing customer service to borrowers
Learn more about loan servicers.
If you do not make your student or PLUS Loan payment or make your payment late, your loan may go into default and will be reported to national credit reporting agencies damaging your credit rating and future borrowing ability. Learn more about consequences of defaulting on a student loan.
Create a Job Requisition All FWS positions should be posted on the Penn State Human Resources Career Pages, utilizing Workday Recruiting job requisitions. This WorkLion Article offers guidance for posting work-study positions and is available via the Workday Knowledge Base.
Please note that all FWS job postings should include 'Federal Work-Study' in the title. It is very important that the appropriate ‘job profile code’ is selected when creating your job requisition. The following paragraph should be included in the posting:
"Students who received Federal Work Study have the opportunity to obtain a job and perform related duties either on campus, or remotely, if possible and at the discretion of the employer. Students applying for Federal Work Study positions should clarify expectations with their potential employer regarding either on campus/in person or remote work arrangements. An offer of Federal Work Study does not guarantee a job position is available."
If you drop below half-time (less than 6 credits as an undergraduate and 5 credits as a graduate) enrollment, you may be ineligible for aid, including loans. Depending on the time during the semester that you drop a course(s), your aid may be adjusted. You must maintain satisfactory academic progress from one semester to the next or you may become ineligible for aid, including loans. Dropping Credits Prior to the End of the Drop/Add Period Impacts on your aid eligibility: You will be responsible for the balance of your tuition bill if your aid is adjusted. Your financial aid may be adjusted if your credits drop below the minimum required. If you are a Federal Pell Grant recipient, the grant may be adjusted; for example, if you drop from 12 to 9 credits, your grant may be prorated. Review additional information about the Pell census date. If you are a Pennsylvania State Grant recipient, your grant may be reduced if you drop from full-time to half-time enrollment or from half-time to less than half-time. If you have a loan(s) that requires a minimum number of credits, and the loan has not disbursed, you may become ineligible for the loan. Loan eligibility is determined at the time of disbursement. Dropping Credits During the Late Drop Period Impacts on your aid eligibility: You will be responsible for the balance of your tuition bill if your aid is adjusted. Your financial aid may be adjusted if the aid source requires full-time or half-time enrollment and your credits drop below the minimum required. If you are a Pennsylvania State Grant recipient, your grant may be reduced if you drop from full-time to half-time enrollment, or from half-time to less than half-time. If you have a loan(s) that requires a minimum number of credits, and the loan has not disbursed, you may become ineligible for the loan. Loan eligibility is determined at the time of disbursement. Late Dropping credits may jeopardize future aid eligibility. You must maintain satisfactory academic progress or you may become ineligible for aid, including loans. Loan Grace Period/Repayment If you received a Federal Direct Loan or Federal Perkins Loan and drop below half-time, the grace period prior to repayment will begin (nine months for Perkins and University Loans, six months for Federal Direct Loans). If you have already used your loan grace period, then you may begin repayment. For more information, contact the appropriate loan servicer: Federal Perkins or University Loan recipients: contact Office of the Bursar. Federal Direct Loan recipients: contact your federal loan servicer. You can obtain the contact information for your federal loan servicer by logging into studentaid.gov. Federal Direct Loan recipients under the Federal Family Education Loan (FFEL) Program: contact the lender(s) of your FFEL loan(s). You can obtain the contact information for your FFEL lenders by logging into studentaid.gov.
You are responsible for monitoring your balance and communicating with your manager as your funds near exhaustion. You will receive a warning email regarding the balance when you have earned 50% or more of your total funds for the academic year. You will receive a warning email when you are close to exhausting your funds. Over-earning can have negative impacts on your financial aid. At this time, supervisors are not informed directly by the Office of Student Aid. Should your funds be exhausted, you will need to cease working as a federal work-study student. Additional opportunities for continued employment in your position would be at the discretion of the manager/supervisor as any future earnings would be their department’s responsibility.