How Does Dropping a Class Impact My Financial Aid?

Quick Answer

Dropping a class won't impact your student loan eligibility unless the move puts you below half-time status. Here's what to do to avoid losing your access to financial aid.

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Each semester or quarter, college students have a deadline for adding and dropping classes, and if you wait until after the deadline, it's considered a withdrawal. In both cases, dropping a course could potentially affect your eligibility for federal financial aid, including access to student loans.

In particular, you could lose your eligibility if dropping the class brings you below half-time enrollment or if the withdrawal means you're no longer maintaining satisfactory academic progress. Here's what you should know.

How Enrollment Affects Financial Aid Eligibility

To qualify for federal student aid, college students must be enrolled at least half time at an eligible educational institution. Each school may have its own definition of half-time status, but it generally means having at least six credit hours.

If you're no longer enrolled on a half-time basis, you won't be eligible for federal financial aid until you meet that threshold again. What's more, your student loan payments will come due after a six-month grace period. If you bring your enrollment back above half-time status in subsequent semesters, you can request another deferment.

If you still have enough credits to maintain half-time enrollment, your student loan eligibility won't be impacted. However, if you qualify for Pell Grants, the amount you receive may be reduced if you drop below full-time status, which generally means 12 credit hours.

While some private student loan companies are willing to work with part-time students, most require half-time enrollment.

Maintaining Satisfactory Academic Progress

To maintain eligibility for federal financial aid, you need to be making satisfactory academic progress. If you drop a class by the add/drop deadline, the decision won't affect that factor. However, if you wait until after the deadline, it's considered a withdrawal, and that can have an impact.

That's because even though you're not completing the course, it'll still be included in the calculation of your GPA, and it'll also affect your completion rate. Each college has its own criteria for what it means to be maintaining satisfactory academic progress, and your school will also consider your GPA, progress toward your degree or certificate and other factors.

So, if you're thinking about withdrawing from a course, first reach out to your school's financial aid office to understand how it might impact your eligibility for aid.

Note that if you do fail to meet academic progress requirements due to extenuating circumstances, such as an illness or injury or death of a relative, you may be able to appeal your school's decision.

What Happens to Financial Aid if I Withdraw From All Classes?

If you make the decision to withdraw from all of your courses for the remainder of the academic term, there are three potential consequences when it comes to your financial aid:

  • You may lose eligibility for aid. If your decision means that you're no longer maintaining satisfactory academic progress, you may not be eligible for federal financial aid in the future unless you file a successful appeal or earn back your eligibility.
  • Your student loan payments will come due sooner. After the six-month grace period, you'll need to start making payments on your student loans unless you get back to half-time status.
  • You may have to return aid. Your school will use the Return of Title IV Funds (R2T4) calculation to determine how much of the financial aid you received for that term was actually earned based on the percentage of the term you attended school. Depending on the calculation, you may need to return some of the financial aid you received to the school or the Department of Education.

Think Carefully Before Dropping a Class or Withdrawing From School

There are many valid reasons to drop a course or withdraw from college altogether. Family or personal circumstances may make it difficult to remain in school, even if they're short term in nature.

Before you make the decision, however, it's important to understand all of the consequences you may face and what your options will be if you want to return to school. If you're considering withdrawing after the add/drop deadline, contact your school's financial aid office and discuss your reasons.

Giving them a heads-up could potentially make the process of returning to school go more smoothly. And if you do lose access to financial aid because of your decision, ask about the appeals process or how to regain eligibility in the future.