Dropped class?  You may still owe your school.

Medical problems.  Roommate issues.  Academic difficulty.  There are many reasons college students drop out of class in the middle of the semester.  Depending on the circumstances, you may be entitled to a refund of part of your tuition, or you may find yourself owing a debt to your school or the federal government.

Under federal law, a college is required to provide a partial refund of federal student loans when a student drops out at or before the halfway point of the term. The refund is based on the school’s refund policy, but federal law requires that some refund must be provided if the student withdrew before sixty percent of the course or term was completed.  If you took out a student loan to cover costs and the school failed to provide a refund, you may be eligible to apply for an unpaid refund discharge of all or part of your student loan.

However, while you might be entitled to a refund of all or part of your student loan, you may have to repay grant money.  A Pell Grant must always be repaid if a student drops out less than halfway through the semester, no matter what the reason.  A Pell Grant overpayment must be repaid to either the school or the federal government, and the student will be ineligible for student aid until the overpayment is resolved.  You may also owe tuition or fees directly to the school if this was part of the enrollment agreement.

If you do decide to withdraw, you should notify the school.  Although you may still qualify for an unpaid refund discharge if you withdraw without notification, letting the school know you are withdrawing reduces the chance of an unpaid refund and eliminates any question about your last day of attendance.

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