Ah, Community College. It's the place to explore interests, knock out a few general education courses, and figure out what your major might be. We've all heard the joke about those community college students who are on the 10-year plan. Your local state and federal government is trying its hardest to make sure that the leisurely over two years attendance is a thing of the past.

But the word isn't getting out fast enough, and some community college students are finding themselves in a heap of trouble. The rules went into effect for the 2012 Fall Semester, but many students will be really feeling the pinch of the issues now as they are registering or beginning the Fall 2013 semester.

A simple Google search on new federal financial aid guidelines will bring you to PDFs from colleges all over the country trying to interpret the new rules. See if your child's community college is offering up its own interpretation of the new rules and regulations.

New Changes in Financial Aid Beginning to Take Effect

Think back to that class you hated. Mine was statistics. I took it three times. The first two times, I dropped it with a "W" — which was great. I didn't hurt my GPA and I could take it again when I had more understanding under my belt. Essentially, community college was designed to help students not ready for college level on a subject to be able to obtain skills at their own pace before matriculating on.

But budget cuts and stringent oversight is making the community college more of a factory for two-year transfer to a four-year college instead of a place to get solid on subjects a student doesn't understand. This is a state wide measure many states are looking into. California, for example will no longer let you take a required course like an English 101 more than three times and a student will have to just accept the grade earned — even if he or she withdrew and has a "W" on the transcript.

Federal financial aid recipients aren't going to have that sort of option anymore.

Now, a "W" in a course counts as an attempt at the course and will factor into the GPA. Also, you only get two attempts at the course, whatever the course is. Three strikes, you're out whether you passed that course or not. There will be students who will not be able to attend anymore.

Some liken the new rules to going cold turkey on an addiction with no transitioning period.

Tax Changes for Students Using Financial Aid

Additionally, a new verification process is in place called a tax transcript. Previously, you submitted your tax return information or your parents'. Now you must submit a tax transcript from the IRS in order to verify that your student qualifies. This is to catch anyone being claimed on someone else's taxes, those married filing separately, etc. But in practice the transcript can take up to eight weeks to make its way to the school financial aid office, which means students might not see money to buy books for two months of the semester.

Pell Grants

Pell Grants, which were once the godsend of financial aid for students from low income families, now max out at 12 semesters when previously a student could go 18 semesters. Again this sounds reasonable, but remember all those mid-career Americans out there who have had to go back to school to train in something else because the market fell out of their field? There might not be any aid left for them, and of course it means that the young student better get through school as quickly as possible.

At some state schools it is nearly impossible to get through in four years due to added state or school requirements that require courses that aren't offered every year.

Students are required to maintain a C (2.0) average to continue to receive financial aid; appeal for a so-called bad semester will be going by the wayside. Of course students should strive for for the 4.0, but many times life gets in the way and students (especially at the beginning) have a bad semester. As an instructor, I've seen students get sick, or their kids have gotten sick, or they've gotten pregnant or had to work more hours to stay in school.

The new financial aid rules are not designed with compassion or second chances in mind.

Traditionally, community college is the land of opportunity and second chances. Returning adults, single parents, those transitioning from one career to the next, as well as the high school student getting ready for college all rely on the community college system to provide the chance they need to better their options and opportunities in life.

It's just now with those new guidelines in place they'll have more limited time to achieve those goals.

What Can You Do?

Go over the new rules yourself and make sure your college student (or you) understand that there are no second chances anymore.

If you are planning to start school soon, make sure that you have the time, energy, and money to do so. If any part of the equation is missing, you could be setting yourself up for problems such as being barred from taking a course that is part of the GE requirement for graduation.

For students receiving financial aid loans, the interest rules have also changed. For high school students taking community college courses, the eligibility has changed as well.

Find out your options for everything way before you decide to enroll.

Know Your Rights and Be Alert

One of the common complaints on the college campuses right now is that the information on the new policies weren't well publicized last semester as they went into effect. As students are beginning the spring semester, they are finding that they can't retake courses or that they are now at the bottom of long wait lists, as students who haven't taken that course will now have first dibs no matter who enrolled first in the course.

Financial aid advisors at your colleges are obligated to explain the new policies to you when you ask. Talk to your child and explain what the new policies might mean to their education and why it's more important than ever for them to be serious about their education.

We hope this information is useful for your and your family, but we are neither tax professionals nor financial aid experts. Please consult your college's financial aid department for more information on the new rules, and a tax professional for help with changes to tax law.