Withdrawing from a class affects your financial aid if doing so means you fall below minimum course loads or prevents you from graduating on time.
To be eligible for federal student aid — including many scholarships, grants, work-study, and federal student loans — you must be making “satisfactory academic progress” toward completing your degree. This means taking enough classes and earning high enough grades to graduate in a reasonable time.
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How does withdrawing from classes affect financial aid?
There’s no set definition for what constitutes satisfactory progress. Every college and university has its own guidelines, which generally include:
- The GPA you need to maintain.
- How many credits you must complete each year.
- How incomplete or dropped classes affect your progress.
- What happens if you fail to make satisfactory progress.
In most cases, you can drop a class and add another by a certain deadline with no penalty. If you choose to drop a class during this period but don’t add another, your financial aid package may be adjusted to reflect the number of hours you end up with.
Withdrawing from a class after the deadline can affect your Satisfactory Academic Progress. Universities often require you to complete at least two-thirds of the classes you enroll in. Withdrawing from a course hurts your percentage.
Tip:
You may need to balance multiple factors when deciding whether to drop a specific class. For example, if taking the class risks hurting your GPA significantly, you may choose to drop it and try to make up the credit hours you need in the next semester.
Another potential concern: Most student aid requires you to be enrolled at least half-time. If dropping a class would put you below that threshold, you risk having your financial aid adjusted or revoked entirely.
Also, any student loans you currently have may then enter the grace period before coming due. In most cases, you won’t need to make any payments toward your federal student loans while you’re still enrolled in school at least half-time. Once you graduate, leave school, or fall below half-time enrollment, you’ll enter a grace period that typically lasts six months. After that point, you’ll be responsible for making principal and interest payments that pay down your student loan balance.
Contact your school’s financial aid office
Since policies can differ significantly from school to school, it’s vital that you check with your financial aid office before dropping a class. Many colleges and universities provide their definition of Satisfactory Academic Progress online and offer examples of how dropping a class can affect your standing.
You can also make an in-person appointment with the financial aid office if you’d like help navigating the rules and how they apply to your situation.
How does dropping a class impact student loans
Private student loans generally are not tied to “Satisfactory Academic Progress.” You will not risk losing any private student loans for failing to complete two-thirds of your classes. If dropping a class causes you to lose some or all of your federal financial aid, private loans may help you fill in the gaps.
There is a downside to this, though: Private student loans do not have nearly the amount of benefits and protections that federal financial aid offers. Federal student loans have generous repayment options, including income-based repayment plans that limit the amount you pay each month to a certain percentage of your disposable income.
The balance of your federal loans may also be forgiven after you’ve made a certain number of payments or worked in public service-related jobs. Private loans generally have just one, standard repayment option. Unless you have excellent credit, private student loans may also have higher interest rates than federal loans.
Many private student loans do require you to be enrolled at least half-time. If you drop below this threshold, you may not be able to take out more private loans. And any loan payments you’ve opted to defer until after you leave school may begin to come due.
Many private student loans have a grace period, much like federal loans. This clock may start when you fall below half-time enrollment. A student loan calculator can help you understand how much you’ll ultimately pay when you start repaying your private loans.
But a number of private student loans are available to part-time students or non-traditional students. These may still be an option for you after dropping a class.
Again, the best course of action is to contact your school’s financial aid office before dropping a class. This is especially true if you’re planning to do so after your college or university’s “drop/add” deadline. The staff in the financial aid office should be able to help guide you through the consequences of dropping a class and how it will affect your scholarships, grants, and loans.
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