When you withdraw from school, it triggers a series of events that can affect your student aid and long-term eligibility for additional aid. Here are a few things to keep in mind before you leave school abruptly.
If you received any federal student aid (like Pell Grants, Supplemental Educational Opportunity Grants, Stafford Loans, PLUS Loans, or Federal Perkins Loans), your school might have to refund all or part of that money if you leave early. The amount of money your school returns is based on your attendance for that semester.
According to the Federal Student Aid Handbook, when a course is below 60 percent completion, the costs of that course are prorated. That means when you stay for more than 60 percent of a semester’s duration, you earn 100 percent of federal funds awarded to you. However, if you leave a course after staying 60 percent or less of its duration, the remaining federal funds for that semester must be returned.
Other Financial Awards
Your withdrawal from school can have an effect on other financial awards you’ve received (like state loans, private loans, school awards, or scholarships).
For one thing, the school may have to return the balance or cancel those funds. Also, you could lose your eligibility for some or all of these funds. For example, the state where you went to school might take away a semester of eligibility for some forms of state aid if you didn’t finish your last semester.
Also you will be responsible for the total amount of loans you took out for your entire postsecondary education. Your withdrawal from school could trigger a grace period or the beginning of your repayment journey, depending on the loan types.
What To Do If You Need To Withdraw
You are responsible for contacting officials at your school before leaving. That way, the school can record the withdrawal date and use it to calculate the total amount of financial aid used for your last semester.
You might be able to keep the funds if you used less than the school received. Otherwise, you will likely be charged and have to pay the difference.
So before you withdraw, just know it can have a domino effect when it comes to your financial aid. Simply put, your school will have to return federal and state funds, while canceling others. And ultimately, you will lose eligibility for certain funds you will still have to pay back any outstanding loans.