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Right now if you are defaulted on federal student loans, you are not eligible for any financial aid. That includes grants as well. What you have to do is contact the agency that is handling your defaulted loan and ask about a rehabilitation program. You'd pay on the loan for 9-12 months. After that, a new lender takes control of the loan and it is consolidated (combined into one loan if you have more than one) and you'd be eligible for financial aid again. Lastly, since you want to go back to school, ask your new lender for a deferment or forbearance so you won't have to pay while in school. Once you graduate, you'll have to pay and interest will be charged while you're in school. So its wise to pay that so it doesn't get out of hand. Source: http://answers.yahoo.com/question/index?qid=20110507145321AA69aHJ