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If You Owe Money to a College, Can You Still Attend a Different College on a Loan?

Education financing is a broad, confusing issue that trips up many thousands of American college students each year. As the cost of tuition at the country's institutions of higher education continues to rise, it's certain that students' debt loads will continue to play a big role in major selections, transfer decisions and career trajectories. Unfortunately, many students faced with obscene student-loan bills are forced to make personal and professional compromises to ensure that they remain solvent after graduation.

Many students also must interrupt their studies in order to shore up their finances. Each year, thousands of American students temporarily withdraw from college to work full-time and save funds for future education expenses. Others choose to withdraw to deal with personal or family issues. Still others withdraw to embark upon periods of self-reflection and re-examine their career tracks.

If you've spent time away from college and wish to return, you're probably nervous about procuring fresh financial aid awards. If you still have substantial student loan balances left over from your prior stint in college, you may be wondering whether you'll even be eligible for new financial aid.

There are a few factors that will automatically disqualify you from receiving new student loans from either public or private sources. If you're currently in default on any student loan, you'll be unable to secure new sources of funding until you enroll in a "loan rehabilitation" program sanctioned by the U.S. Department of Education. To complete this program successfully and wipe away your default designation, you'll need to make six consecutive student loan payments on time. Once you've done this, you can take out new public or private student loans.

Likewise, you'll be banned from receiving new student loans after being convicted of any drug felony. You'll have to wait until this conviction drops off of your criminal record before you can receive new funds. In some jurisdictions, you may be able to speed up the process by petitioning a court to have your criminal record expunged. This process offers few guarantees: At minimum, you'll need to prove to the court that you're serious about pursuing a degree. In addition, you may still be unable to secure federally-backed student loans after your record has been expunged.

When you return to college, you'll be excused from repaying any of your old student loans until six months after you graduate or withdraw from your current institution.

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