If my college’s financial aid department withheld my loans and I had to withdraw missing the final date to do so without penalty, am I still obligated to pay?

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If my college’s financial aid department withheld my loans and I had to withdraw missing the final date to do so without penalty, am I still obligated to pay?

I have been trying to get the funding released for 5 months (initial pick-up date). The official deadline to withdraw without penalty was 4 months ago, however at the time I had no intention of withdrawing as I figured the funding would have been released.

Asked on January 2, 2012 under Bankruptcy Law, Alaska

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you signed an agreement with your school and had to withdraw where you are assessed a penalty for a late withdrawal, you are still obligated to pay the penalty despite the fact that the college's financial aid program withheld your student loans.

One way of trying to get out of having to pay the penalty is to speak with a person in your school's admissions program about the problem you experienced as the result of a department within the school itself advising the person that had you received the financial aid funds sooner you would not have had to withdraw. Possibly you can get the penalty waived with this explanation.


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