The New Year has begun and so has a new
semester. You’re getting a feel for your
classes and schedule, but may be a bit overwhelmed. Maybe you’re even considering dropping a course. While dropping a class may help you
academically or allow you to manage your schedule better, it may have a
negative effect on your financial aid or scholarships. Since scholarships vary, be sure to check the
terms of your scholarship or with the person or agency that granted the scholarship
to see if you will be disqualified for dropping credits or a certain
curriculum.
For federal loans, you’ll need to watch
that a dropped course or courses doesn’t cause you to fall below full-time or
half-time enrollment depending on what is required of your loan terms
(hereinafter “enrollment requirement”).
Falling below the requirement can result in aid adjustments or even
ineligibility for loans the next semester or year.
The amount awarded may be adjusted if
you fall below the enrollment requirements.
For example, the amount granted is typically prorated for Federal Pell
Grants. Most schools require students to
be responsible for the rest of the amount owed after the loans have been
adjusted. This may cause you to get
private loans, which likely have higher interest rates, fewer flexible
repayment plans, and require more repaid over the life of the loan. Additionally, dropping below enrollment
requirements may kick-start your grace period.
Federal loans allot a grace period (which usually begins upon
graduation) which allows you to get your finances in order and a repayment plan
scheduled before your first payment is due.
If you drop below your enrollment requirement, your grace period may
begin and therefore repayment may become due despite continuing to take the
rest of your classes.
You may also want to consider whether
the change in credits will affect your estimated graduation date. If the class is required for graduation and
isn’t offered again until the next year, this could push your graduation back,
costing you more tuition money among other opportunity costs.
For these reasons, it is important to check
with your advisor as well as your financial aid office first to see how a drop
will affect you.
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Until
Next Time,
Jenny
L. Maxey