Section 484(a)(2) of the Higher Education Act of 1965 requires a student to be making Satisfactory Academic Progress (SAP) in order to be eligible for any Title IV federal student aid. Schools are required to review the academic progress at least once a year at the end of the year. SAP is defined as having a cumulative C average or the equivalent, or academic standing consistent with the school's requirements for graduation. When a student fails to satisfy the SAP requirements, they may regain eligibility for federal student aid by either achieving academic standing in any grading period consistent with the requirements for graduation or by filing for and being granted a SAP appeal by the school.

A SAP appeal may be based on undue hardship when the failure to make satisfactory academic program is caused by the death of a relative of the student, severe personal injury or illness of the student, or other special circumstances determined by the school. Generally speaking, there should be a causal link between the special circumstances and the poor academic performance. But if there is a special circumstance that may reasonably be linked to the deterioration in the student's academic performance, schools generally have wide latitude to waive the SAP requirements. For example, a decline in performance can be caused by psychiatric, psychological and social problems and not just physical injury. Even a learning disability, such as ADD/ADHD, can be the basis for a successful appeal, if it is severe enough to have caused the academic problems and is being treated medically. Likewise, if the student is one semester away from graduation, many schools will waive SAP requirements if they believe the student will make satisfactory progress and actually graduate at the end of the next semester. Such mitigating circumstances should be specified in the school's written SAP policy.

Schools should consider whether there was a financial component to the student's failure to make satisfactory academic progress. If so, a loss of aid eligibility might exacerbate the problem, forcing the student to drop out and move off-campus. If restructuring the student's financial aid package (e.g., substituting loans and grants for work-study) might enable the student to resume making satisfactory academic progress, the school should consider waiving the SAP requirements in order to enable the student to succeed.

Schools should also consider whether the circumstances that lead to the academic problems will continue to interfere with the student's progress before granting a waiver. If the problems are ongoing, the student may be better off taking a leave of absence. If the student has corrected the problems, then it is reasonable to expect that the student's grades will improve during the next semester.

Note that schools may not have a "fresh start" or amnesty policy that allows students to regain financial aid eligibility by taking a year leave of absence. Instead, the school must require such students to file an appeal of their SAP status on the basis of special circumstances and review the appeal on its merits. Guidance published by the US Department of Education clearly indicates that a leave of absence is not sufficient grounds for a SAP waiver.

Many financial aid offices check academic progress once a semester. The federal requirements are that the financial aid office must check academic progress at least as frequently as the school, and also at least once a year at the end of the year. The financial aid office can check progress more frequently if it wishes.

If a student's GPA is less than a C average, but the school's SAP policy allows a lower GPA, the student is considered to be making satisfactory academic progress so long as his progress is consistent with the school's requirements for graduation.

Most schools will send warning letters to students who are borderline, letting them know that they are close to losing eligibility for federal student aid. Many schools provide for a probationary period of one or two semesters in their SAP policy during which a student is considered to be making satisfactory academic progress even if they aren't.

Most schools will not grant a waiver for a violation of the maximum timeframe requirements, unless the school anticipates that the student will graduate at the end of the next semester. Part of the purpose of the SAP requirements is to prevent "perpetual students" from using student aid as a form of welfare and indefinitely deferring the obligation to repay their student loans.

Relevant regulations include 34 CFR 668.16(e), 34 CFR 668.32(f) and 34 CFR 668.34.