What happens to your financial aid if you drop a class?

If you’re feeling overwhelmed by your course load, dropping a class could make things more manageable. But before you change your schedule, find out if withdrawing from that class would impact your financial aid. You generally need to be enrolled at least half time and maintaining satisfactory academic progress (SAP) to stay eligible for certain types of financial aid. If dropping a class changes your enrollment status or causes you to fall below your school’s SAP standards, you could lose your eligibility or, in some cases, even have to return aid you already received. Here’s a closer look at the potential consequences dropping a class could have on your financial aid.

Key takeaways

• Dropping a class may or may not affect your financial aid; it depends on whether it changes your enrollment status or academic progress.
• If you go below half-time enrollment, you’ll lose eligibility for new federal student loans and trigger the six-month grace period on certain existing loans.
• You may have to pay back some financial aid if your school recalculates your award after you’ve already received it.
• Before dropping a class, speak with your financial aid office to find out if doing so would affect your financial aid.

How does dropping a class affect your financial aid?

Dropping a class may or may not affect your financial aid. It all depends on how many credits you have left, when you drop the course, and whether the change affects your satisfactory academic progress.

Here are a few scenarios you might encounter:

• You maintain your enrollment level and SAP: If dropping the course doesn’t change your enrollment level or cause you to fall below your school’s SAP standards, your financial aid will likely remain unchanged.
• Your enrollment level changes: If dropping the class changes your enrollment status from full-time to part-time, your school might reduce your grants and scholarships. In some cases, you would have to return some aid that was already disbursed.
• You fall below half-time enrollment: You need to be enrolled at least half-time to be eligible for federal student loans, so you’d lose eligibility for new loans. And if you already borrowed Direct unsubsidized or subsidized student loans, they would enter their six-month grace period, followed by repayment. The Pell Grant is still available for students attending less than half time, but the amount is prorated based on your credit hours.
• You stop meeting your school’s SAP standards: Withdrawing from a course means you attempted a course but didn’t finish it, which could lower your overall completion rate. A lower completion rate could make you fall below SAP standards, which would mean you lose eligibility for financial aid.
• You withdraw from all your courses: If you drop all your classes before you’ve completed 60% or more of the semester, your school may require you to return some of the financial aid you received based on the Return of Title IV Funds rule.

Withdrawing vs. dropping a class: What’s the difference?

Although some students use the terms interchangeably, dropping a class and withdrawing from a class are somewhat different. Dropping usually happens during a school’s designated add/drop period, which often spans a week or two at the beginning of the semester.

You can shop around for classes and adjust your schedule during this time. The dropped course won’t appear on your transcript, and it probably won’t impact your SAP. It could impact your enrollment level if you don’t replace it with another course, though.

Withdrawing from a course happens after the add/drop period is over and the semester has officially started. The course may show up on your transcript with a “W.” It won’t impact your GPA, but it could affect your completion rate.

Completion rate refers to the number of credits you earned out of how many you attempted. To maintain satisfactory academic progress, most colleges require that you complete at least two-thirds of the credits you attempted.

What are the enrollment requirements for financial aid?

Your financial aid offer is tied to your enrollment level at school. The exact number of credits that make up an enrollment level varies by college, but could look like this:

If dropping one or more classes causes you to drop an enrollment level, your school might adjust your financial aid award. If you go from 12 credits to six, for example, your federal student loan offer could be cut in half.

Your school might also reduce any institutional grants or scholarships you received. As mentioned, going below half-time enrollment could mean you have to repay your loans sooner and would lose eligibility for additional federal student loans.

What are the satisfactory academic progress requirements for financial aid?

Another important requirement for financial aid is your academic progress. Each school sets its own benchmarks, but it’s generally based on your:

• GPA: You have to maintain a minimum grade point average, often at least 1.8 or 2.0.
• Completion rate: You need to complete a certain percentage of the credits you attempt, often two-thirds.
• Time it takes to graduate: You must complete your program within a maximum time frame, often within six years for a four-year program.

While dropping a course during the add/drop period probably won’t impact your SAP, withdrawing from a course later in the semester could, potentially causing you to lose eligibility for financial aid.

Will you have to repay any financial aid?

You may have to repay some financial aid if your school adjusts your award after it’s been disbursed to you. Let’s say, for example, that you’re a Pell Grant recipient who moves from full-time to three-quarter-time enrollment. Your school might reduce your Pell Grant award and ask you to pay back the difference.

Dropping below half-time enrollment usually doesn’t mean you have to return federal student loans. But you may become ineligible for new loans, and your existing loans will enter their six-month grace period. You can get them back into in-school deferment if you bump up your enrollment above half time again.

If you withdraw from all your classes, your school will use the Return of Title IV Funds calculation to determine how much aid, if any, you have to return. You may have to return some aid if you withdraw before you’ve completed 60% of the semester.

What should you do before dropping a class?

Before you drop or withdraw from a class, speak with your financial aid office about how it would impact your enrollment status or SAP. The financial aid office should inform you whether the change would impact any grants, scholarships, loans, or work-study you’ve received.

If you have external scholarships, you can also review their eligibility requirements. Some scholarships have their own rules about enrollment level, GPA, or credit completion. And if you’re hoping for a tuition refund from your school, check its policies and any deadlines.

What can you do if you lose financial aid eligibility?

If you lose your eligibility for aid, there are a few steps you can take to get it back:

• Improve your academic standing: If a low GPA or completion rate is the issue, seek out academic tutoring or other support to help you meet SAP standards.
• Bump up your enrollment level: If there’s still time, add another course to your schedule so you’re taking enough credits.
• Appeal the decision: If you had extenuating circumstances, such as an illness or a family emergency, you may be able to appeal the loss of financial aid.
• Seek out temporary funding: You may need to look for alternative sources of funding, like a scholarship or a private student loan. Some schools have hardship funds for students and offer emergency grants or loans.

Work closely with your financial aid office to come up with a plan of action for restoring your financial aid and getting your studies back on track.

Take steps to protect your financial aid

Being proactive is the best way to protect your financial aid. Find out what your school’s enrollment and SAP requirements are before you make any changes to your course schedule.

If you’re struggling in a class, speak with your professor and academic adviser for help. And if external circumstances are an issue, collect documentation, like medical records, in case you need to file an appeal.

If you do lose your eligibility for financial aid, reach out to your financial aid office right away to discuss how to get it back. If you need additional funding to cover education expenses, private student loans from College Ave may be an option to explore, depending on your eligibility.

Frequently asked questions

Will I lose my FAFSA if I drop a class?

The FAFSA is the free application you need to submit for financial aid, so you won’t lose it by dropping a class. But you might lose some of your financial aid if dropping or withdrawing from a class changes your enrollment level or impacts your satisfactory academic progress. It’s a good idea to file the FAFSA every year so you’re eligible for financial aid.

Is it better to drop a class or fail if you have financial aid?

Both dropping a class and failing a class have the potential to impact your satisfactory academic progress, which can affect your financial aid. Withdrawing from a class could impact your credit completion rate, while failing could bring down your GPA. Speak with your academic advisor to find out whether dropping or failing the class would have the bigger impact (if any) on your financial aid.

Do you get your money back if you drop a class?

You might get a partial or full refund depending on when you drop a class and your school’s policy. Some schools might reduce your financial aid at the same time, though, so you may not end up getting money back.

Do you have to pay back financial aid if you withdraw from a class?

It’s possible that you’ll have to pay back some financial aid if you withdraw from a class. If withdrawing changes your enrollment level, your school might recalculate your aid and require you to pay back part of it. In some cases, though, withdrawing from a single class won’t affect your financial aid at all.