What Happens to Financial Aid If You Drop a Class?

If you drop (or withdraw from) a class, your financial aid could be affected. It depends on:

  • The terms of the loan, grant, or scholarship.
  • When you accepted the aid.
  • And how the dropped class affects your academic progress or enrollment status.

To know what happens to financial aid if you drop a class, it helps to first understand the requirements to qualify for financial aid.

Consider doing financial awareness counseling after you took out a federal student loan

Financial could be affected if you withdraw from a class.

Understanding Your Financial Aid Terms

When you first start college, your federal student aid eligibility is based on the details submitted through the FAFSA (Free Application for Federal Student Aid). Additional state grants may be available through your state’s financial aid application. Making ‘satisfactory academic progress’ toward completing your degree is one of the requirements you must meet to maintain that eligibility through the remaining years in college. This includes eligibility for grants, scholarships, work-study, and federal student loans.

The exact definition of satisfactory academic progress may vary among schools with each school setting its own standard. Generally, it means you need to take enough classes and earn high enough grades to graduate within a reasonable time period.

Each school sets its own guidelines for what constitutes satisfactory academic progress, including:

  1. How many credits you must complete every academic year.
    • Some scholarships, grants, and loans require you to take a certain number of credits a semester, such as 15, 12, or 6. Failing to meet these thresholds may result in lower financial aid, loss of the aid entirely, or require the student to pay back a portion of the money.
  2. Minimum GPA you need to maintain.
    • It is usually a minimum of 2.0, but more competitive schools may have higher requirements. Dropping below this may cause you to get a warning and could affect your financial aid. A scholarship may also have its own minimum GPA outside of the school’s requirements, and dropping below this grade could mean your scholarship is not renewed the following year.
  3. How your progress may be affected by dropped or incomplete classes.
    • There are financial aid packages that require you to complete a certain number of credits by the end of each year. Failing to meet that requirement could result in a loss of financial aid.

Can You Drop a Class and Maintain Financial Aid?

One of the requirements to qualify for federal student aid and many scholarships and grants is that you must be enrolled at least half-time at an eligible educational institution.

Schools may vary in what they consider half-time enrollment. Generally, half-time status means having a minimum of six credit hours. Some awards and grants could require you to maintain full-time enrollment, which means a minimum of 12 or 15 credits depending on the program. It all depends on the terms of your financial aid agreement.

If, after dropping a class, you still have enough credit hours to maintain the enrollment requirement, it won’t affect your financial aid eligibility. However, if you fall short of the minimum credit hours required to maintain enrollment, you’ll lose your financial aid eligibility. You will regain your eligibility when you meet the required minimum threshold.

Two important things you should note here:

  1. For federal student loans, if you drop a class and lose your half-time status, your student loan repayments will come due earlier. Instead of six months after graduation, your loan repayments will come due six months from the date of losing your half-time status.
  2. If you qualify for Pell Grants and you don’t meet the minimum full-time threshold, you won’t receive the full amount you qualify for.

How Dropping a Class Impacts Satisfactory Academic Progress

Satisfactory academic progress is a requirement for maintaining eligibility for federal financial aid.

Generally, your financial aid won’t be affected if you drop a class by the add/drop deadline. Your financial aid will only be affected if you wait until after the deadline to drop a class. Some schools may allow you to drop a class in the first or second week of the semester without consequences. After two weeks the schedule is set and you could then lose credits as well as your financial aid eligibility if you drop a class after that period.

As we said earlier, each school sets its own criteria for assessing satisfactory maintenance. Most consider your GPA and progress toward your degree among other factors.  It’s best to speak to your school’s financial aid office to find out the minimum credits you need to take each semester to stay eligible for financial aid. You’ll also need to find out the minimum GPA you need to earn to maintain financial aid eligibility.

Important note: If your failure to meet academic progress requirements is due to unavoidable circumstances such as an injury, illness, or death of a family member, you may be able to appeal your school’s decision.

What Happens to Financial Aid if You Withdraw from All Classes?

There is a difference between dropping a class and withdrawing from a class. Every college sets a deadline for adding or dropping classes. This may be set every semester or every quarter depending on the school. If you drop a class after the deadline, it’s considered a withdrawal.

Withdrawing from all classes for the remainder of the academic term can have three major consequences when it comes to financial aid.

  1. You may lose eligibility for all types of federal financial aid in the future. Withdrawing from all classes means you’re no longer maintaining satisfactory academic progress, which is a mandatory requirement.  You can earn back your eligibility in the future by filing an appeal after re-enrolling in the required classes.
  2. Your student loan repayments still come due even before you graduate. If you withdraw from all classes, you won’t be eligible to graduate. That means you’ll also lose that six-month grace period after graduation before repayments become due. Instead, your repayments will start six months from the date of withdrawal from your classes unless you get back to half-time status.
  3. You may be asked to return some of the financial aid you’ve received. Your school will calculate how much financial aid you need to return either to the school itself or to the Department of Education. You’ll only be allowed to keep what you earned based on the percentage of the term you attended school.  You’ll have to return the rest immediately.

So, do you have to pay back financial aid if you withdraw from a class? Maybe. The best thing you can do is contact your financial aid office and find out what will happen based on your circumstances.

What Happens to Financial Aid If You Fail a Class?

For the most part, your financial aid won’t be affected if you fail one class but have an excellent academic track record before that. This is because, with a strong academic track record, your GPA would be strong enough to help you maintain your eligibility. Under these circumstances, it should be relatively easy for you to recover your GPA and requalify for financial aid.

Generally, you would risk losing your financial aid eligibility under these two circumstances:

  1. If your GPA drops before a certain minimum threshold.
  2. If you haven’t maintained satisfactory academic progress through multiple semesters in college.

What To Do If You Lose Financial Aid Eligibility

In most cases, you will be able to regain eligibility by getting back on track academically. This may involve adding classes to your schedule to maintain half-time status and boosting your GPA. Most schools require students to maintain at least a 2.0 GPA on a 4.0 scale.

Regardless of why you’ve become ineligible for financial aid, it’s always advisable to speak to your school’s financial aid office before doing anything else. They will tell you exactly what you need to get back in good standing and regain eligibility. And if you had to drop a class or withdraw due to extenuating circumstances, find out about filing an appeal so you can get access to financial aid immediately.

Are you looking for student loans? Use College Raptor’s new Student Loan Finder to discover personalized loans. Compare lenders and interest rates to find the ideal student loan for you!

 

Lender Rates (APR) Eligibility
Citizens logo.
6.98%-15.04%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
VISIT CITIZENS
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
VISIT SALLIE MAE
Credibe company logo.
4.98% - 16.85% Variable
4.07% - 16.49% Fixed
Undergraduate and Graduate
VISIT CREDIBLE
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
VISIT LENDKEY
Ascent company logo.
6.24% - 15.85% Variable
4.29% - 15.76% Fixed
Undergraduate and Graduate
VISIT ASCENT
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
VISIT ISL
Earnest company logo.
5.62% - 16.85% Variable
4.39% - 16.49% Fixed
Undergraduate and Graduate
VISIT EARNEST
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
VISIT ELFI
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

Subscribe to Our Newsletter

Join thousands of students and parents learning about finding the right college, admissions secrets, scholarships, financial aid, and more.