Final answer:
Kathy and Kelly are likely to lose federal student aid due to not maintaining satisfactory academic progress and defaulting on a student loan, respectively. Karen may retain her eligibility if she repays or arranges to repay the owed grant refund.
Step-by-step explanation:
The correct answer is a) Kathy and Kelly. Kathy is likely to lose federal student aid eligibility because she has not maintained satisfactory academic progress, which is a requirement for maintaining financial aid. Similarly, Kelly is at risk of losing her eligibility because she has defaulted on her federal student loan. Federal student aid regulations state that students who default on loans or do not maintain academic standards are not eligible for further aid.
Karen, however, who owes a refund on a federal student grant, would not necessarily lose her eligibility for aid; she would need to either repay the funds or make arrangements to do so to retain her eligibility. Therefore, only Kathy and Kelly are likely to lose their eligibility for federal student aid.