If I Drop Classes, Will It Affect My Student Loan Payments?

Be careful not to drop below half-time enrollment.

What's the student debt impact of dropped classes?

Sometimes it’s the right choice to drop classes. Whether you simply took on too much one semester or you have family or work commitments that give you less time for school, dropped classes happen. But what happens to your student loan payments when they do?

In most cases, one dropped class won’t affect your student loans. However, there’s a certain course load you have to meet if you don’t want the monthly payments to start on your student loans.

Maintaining half-time enrollment

According to financial aid requirements, you have to maintain at least half-time enrollment at a qualified institution in order to qualify for any financial aid. That includes your federal student loans – both subsidized and unsubsidized.

So if you drop enough classes that you drop below half-time enrollment, the government will treat it as if you graduated. In other words, the clock on the grace period before you have to start making payments will begin.

  • If you have Direct Stafford Loans, the grace period is six months
  • If you have Perkins or University Loans, the grace period is nine months

Fact: The clock on your repayment grace period starts from the day after you drop below half-time enrollment.

Once the grace period ends, your student loan payments will start, at which point you will be required to make payments every month unless you can qualify for deferment or forbearance.

Re-enrolling before your grace period ends

If you re-enroll in classes to have enough credits to reach half-time enrollment, then your grace period will be reset.

So let’s say you have to drop all of your classes but one because of a family situation. The clock on your grace period will start and you have six months until your payments start. If you go back and enroll full-time once your situation ends, then your grace period will be reset.

No grace period on PLUS loans

If you have a PLUS loan, there is no grace period. Loan repayment will begin directly after you drop below half-time enrollment. So if you have PLUS loans or your parents took out PLUS loans for your education, there’s a lot less wiggle room than if you have other types of federal loans.

Beware changes in your financial aid award

While one dropped class may not initiate the grace period on your student loan payments, it can definitely affect your life. Any class that is dropped could affect your financial aid award. In other words, you may not be eligible to receive the same level of aid. This is why it’s always in your best interest to check with your financial aid office before you move forward in dropping classes.