The federal government does not set a specific GPA. This is one of the requirements (satisfactory academic progress- SAP) that is set by each school.
The federal government only requires that the school has a consistent approach for all students.
If SAP is monitored for each payment period (or semester) the student is given a warning the first time their GPA goes below what the school thinks is acceptable. If it is not raised in the next period, they are placed on "probation". A plan is put in place with specific guidelines that the student must meet by the next pay period or financial aid will end.
For schools that monitor SAP once a year, it is probation and then (if the guidelines are not met) financial aid is ended.
There is always an appeals process that the student can use if financial aid is denied, as well.
