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Students complete the Free Application for Federal Student Aid (FAFSA®) to determine their eligibility for scholarships, grants and federal student loans provided by the government. But, qualifying for financial aid isn't something you do just once. You must also maintain satisfactory academic progress (SAP) to continue receiving aid from one semester to the next.

Dropping — or failing — a class could put your financial aid funding at risk. If you're using federal student loans, scholarships or grants to pay for school, here's how your course load may impact your aid eligibility. The following information is general, so check with your school to understand their policies for SAP and financial aid.

Maintaining Financial Aid Eligibility

If you were awarded federal financial aid as part of the FAFSA, then you are required to maintain SAP to remain eligible. So what does that mean?

"FAFSA lets schools define academic progress (or satisfactory academic progress) individually for their students," says Steven M. Hughes, founder of Know Money Inc., an organization that promotes financial education and literacy for young adults in South Carolina. "Academic progress is commonly counted by the number of hours you earn, compared with the number of hours you're taking and your grade point average."

For example, your school might require you to complete 67 percent of the hours you enroll in to maintain your FAFSA. If you're enrolled in 15 hours per semester, you'd need to complete 11 hours to meet that standard. Your school should be able to tell you the specific GPA and number of enrollment hours that are required, along with how quickly you need to be moving toward graduation to meet its SAP standards for financial aid.

Scholarships may have similar standards to maintain funding from one semester to the next. Richard Blakely, director of product at a digital inventory art management firm in New York City, attended a prestigious art school where he had FAFSA eligibility and was awarded a scholarship by the school. He says GPA was an important factor in maintaining scholarship funding.

"At the end of each semester, if your overall grade point average was below your scholarship minimum, then you not only lost the funds moving forward but also through the semester you just completed," Blakeley says. Students who didn't achieve the minimum GPA were required to repay any scholarship funds they'd received for that semester. "It's not free money unless you excel at your studies to the satisfaction of the school."

Blakeley says the school was up front about its policy, but some students were not fully aware of what was expected because they didn't always read the fine print in their scholarship package. To avoid putting yourself at risk of losing funding because of poor academic progress, Hughes says to clarify the requirements for scholarships early on and "don't fall into the trap of thinking that you have time to recover your GPA if your scholarship checks your grades for eligibility each semester."

How Dropping or Failing a Course Affects Financial Aid

If you're thinking of reducing your course load, the impact on your financial aid largely depends on the timing.

"Each school has its own academic calendar outlining the last day to drop a class without receiving a grade of withdrawal or withdrawal/fail," Hughes says.

Dropping a class prior to the cutoff date won't affect your GPA or enrollment status. If you leave a course after the cutoff date, you're considered to be withdrawn.

Withdrawing with a passing grade does not impact your GPA. A withdrawal/fail, which means you withdrew from the course with a failing grade, is factored into your GPA calculation. Failing a course also means you won't get credit for the hours, which could affect your progress toward a degree and your enrollment status.

Hughes dropped a course early in his college career to better juggle the demands of classwork and an internship. Unfortunately, he took a grade of withdrawal/fail, "which gut-punched his cumulative GPA," he says, putting him dangerously close to losing his financial aid eligibility for the next semester.

Dropping a course midway through the semester can have additional repercussions if you're expected to repay some of your financial aid because your enrollment status changes. You must be enrolled at least half-time to retain eligibility for Federal Direct Loans. If you drop below half-time because you took a grade of withdrawal/fail, your school may require you to return part or all of the financial aid funds you received.

Keep in mind that your enrollment status could also affect any private student loans you have. Enrollment requirements will vary by lender. It's common to be required to be enrolled at least half-time at a degree-granting institution. Some lenders also require SAP. Be sure to check with your lender to make sure you understand their terms.

Regaining FAFSA Eligibility

If you've lost your financial aid eligibility because you dropped a course halfway through the semester or failed altogether, don't panic. It's possible to get it back.

"If you lost the ability to access financial aid, you can regain it through an appeal process," Hughes says. "This process may include academic probation, which requires you to bring your GPA up to the satisfactory academic progress level."

That could include retaking a failed course or substituting it with a different course and achieving a passing grade. If your GPA is well below the required minimum, Hughes says it may be necessary to connect with your academic adviser and the university to create a plan of action that would allow you to get your GPA where it needs to be. That may include attending weekly tutoring sessions, creating a schedule for independent study and meeting regularly with your professors to discuss your progress. When in doubt, check with your school's financial aid office to determine the next steps for regaining your FAFSA eligibility.

Regaining scholarship eligibility typically depends on the type of scholarship involved. For scholarships offered directly by the school or through state or federal government agencies, you may be able to reinstate your funding by meeting the SAP standards for course hours and GPA. For private scholarships, contact the granting organization to see if there is an appeals process and any criteria you need to meet to requalify.

Don't Miss Out on Financial Aid

Losing your financial aid can be devastating but a proactive approach can ensure that your college career isn't jeopardized. Reviewing SAP requirements and paying close attention to your school's policies for dropping or withdrawing from classes can help you avoid any potential hiccups with your aid package.

FAFSA is a registered service mark of the US Department of Education.

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