This boggled the living hell out of me, as I provided them with a cosigner and my loan was approved.
After calling several different numbers and going through innumerable phone menus, I finally got to talk to someone at Sallie Mae. Apparently, MY credit was ok, but my cosigner's isn't. So he was denied and moved to the status of a reference. They simply forgot to inform him, me, or AIU. So technically the loan IS approved, only they can't touch the money until I get a cosigner.
AIU has graciously given me until the end of the quarter to find a new cosigner. I intend to find one by months end.
It's funny. I'm basically right back where I started at the beginning of March.
I don't know whether to be amused, terrified or angry.