How Does Dropping a Class Affect Your Financial Aid?

Dropping a class could affect your financial aid if it pulls you below half-time enrollment or prevents you from making satisfactory academic progress. The impact depends on factors including when you drop the course and your school's financial aid policies. 

If you're relying on federal grants or student loans, check with your financial aid office about the potential consequences before you drop or withdraw from a course. We break down when dropping a class puts your aid at risk, and what you can do to protect it.

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How does dropping a class affect financial aid?

Dropping a class can affect your financial aid if it changes your enrollment status since you must be enrolled at least half time to qualify for federal financial aid. 

“If you drop a class but you're still enrolled at the enrollment level your aid was based on, you're usually fine,” says Megan Walter, senior policy analyst at the National Association of Student Financial Aid Administrators (NASFAA). 

“But if dropping the class takes you from, say, full time to part time, your aid can be recalculated, and you might see your grants and loans reduced,” she adds.

Dropping below half-time enrollment can also cause your student loans to lose their in-school deferment status. 

“If you drop below half-time enrollment, you will start using up the six-month grace period on your student loans before repayment begins,” advises Mark Kantrowitz, a financial aid expert and author of books about paying for college.

Your school may also require you to return your federal or financial aid payments if dropping a class means you're no longer meeting satisfactory academic progress (SAP) requirements. SAP benchmarks vary by school, but they usually include a course load of at least six to eight credits and a GPA of 2.0 or higher. 

Learn: What’s the Difference Between Unsubsidized and Subsidized Student Loans?

What is half-time enrollment status?

Half-time enrollment means you're taking at least half the credits required for full-time enrollment status. Specific requirements vary by school, but half-time enrollment usually qualifies as six to eight credits, while full-time enrollment may mean taking 12 credits or more.

Students generally must be enrolled at least half time to qualify for federal financial aid. Many private student loan lenders also require that you're at least a half-time student, though some provide funds for students enrolled less than half time, including Sallie Mae, Abe, and Custom Choice, for example.

If you drop below half time, you could lose eligibility for aid, and your existing federal loans may enter their grace period and no longer qualify for in-school deferment. 

How is withdrawing different from dropping a class?

Dropping a class usually happens early in the semester during a dedicated add/drop period. Withdrawing occurs after the add/drop period has closed.

When you drop a class, you can adjust your schedule during this time without penalty. Any classes you drop won't end up on your transcript or affect your GPA. You may also get a refund for the class if you've already paid for it. 

If you withdraw from a class after it's started, your transcript may likely show a “W” for the course. This mark won't impact your GPA, but it stays on your official record, so future schools you may apply to later can see it. If you've already paid for the course, you likely won't get a refund and will still be responsible for paying back the tuition and fees.

What is satisfactory academic progress (SAP)?

SAP is a standard that schools use to be sure you're making enough progress toward your degree to qualify for financial aid. Each school sets its own policy, but it's usually based on: 

• Your GPA 
• The percentage of attempted credits you earn 
• The maximum amount of time you can take to complete your program 

“SAP is basically the school's way of making sure you're on track to actually finish your degree, while receiving federal aid,” says Walter. “If you fall behind, you could lose eligibility for federal aid until you get back on track.”

Dropping a class during your school's add/drop period may not affect your SAP, since the course won't count as an attempted credit. Withdrawing from a course midsemester can impact your SAP, since the course will count as an attempted credit that you didn't complete. 

If you're thinking about withdrawing from a course after the add/drop period has ended, reach out to your financial aid office to see how it might impact your SAP and eligibility for aid.

How can you protect your financial aid?

If you're concerned about losing financial aid, the best defense is knowing your school's enrollment and SAP thresholds before you make any changes to your class schedule. A few specific steps can help:

• Maintain at least half-time enrollment: Find out how many credits you must take to maintain half-time enrollment status so you don't drop below that threshold and lose your eligibility for federal aid. 
• Check your school's add/drop deadline: Dropping a class during the add/drop period may have different consequences on your financial aid than withdrawing later in the semester. 
• Understand your school's SAP requirements: Each school sets its own SAP requirements, so find out what criteria you must meet to maintain your financial aid eligibility. 
• Get in touch with your financial aid office: Your financial aid office can explain how dropping or withdrawing from a class could affect your financial aid award. 
• Consider a financial aid appeal: In certain extenuating circumstances that caused you to take a break from college, such as severe illness, injury, or a family emergency, you may be able to appeal a loss of financial aid. 

Before you make any changes to your course load, speak with your financial aid office so you understand the potential impact on your enrollment status, SAP, and financial aid. If you do lose financial aid eligibility, ask your school what steps you can take to get it back.

Related: What Is a SAP Appeal? How To Regain Financial Aid Eligibility