Many people leave college in the United States without graduating, but perhaps aren’t aware what that means for their student loan. Read on to make sure you know how dropping out can affect your loan status.
Withdrawing from college before attaining a degree is actually quite common. In fact, only 62 percent of students achieve a bachelor’s degree within six years of beginning their studies.
Not having a degree doesn’t exempt you from your student debt, however, and you may suddenly find yourself having to make repayments. Only in very rare cases will your loan be pardoned if you drop out.
What happens to my loan if I drop out of college?
If you drop out of college, in most cases you will need to start making repayments on your loan. However, some lenders may allow a six-month grace period.
Make sure you know the terms set by your lender as these will vary. Normally, Federal loans will have a grace period, but this may not be the case for private lenders.
In many cases, you will have to repay any grants you were given if you drop out as well. This may be proportional to the time you spent studying with the grant.
What happens if I reduce my studies to below half-time?
While you may think that only graduating or dropping out would trigger repayments, you need to be careful. If you began as a full-time student but then reduce your workload to less than half-time, this will often mean you need to start paying back your loan.
For both Federal and private loans, it is usual for…
