Dropping out of the school that I am currently attending is pretty inevitable at this point. I went to this school for all of the wrong reasons. I feel very stressed out and behind and mentally, I am not in the greatest place. I take full responsibility for this. I haven’t paid for college with any grants but I do have $5,500.00 in Stafford loans in my name and about $9,000.00 in Parent PLUS loans and I did apply for the six month grace period on each of these loans as well as deferment on the Parent PLUS loan while I’m in school.
I plan to drop out after I receive my loan disbursement in a couple of weeks because I do have certain living expenses that are dependent on that money and I would like to keep any extra money earmarked for living expenses so that I don’t have to take out more loans for next semester and pay another disbursement fee. I know that you aren’t necessarily supposed to do that but financially, it makes better sense.
I need to know if dropping out voids the grace period. It seems like it wouldn’t but I am no expert. I will be out of school for a maximum of about two months and will re-enter the program that I should have gone into to begin with in January, but there is no way that I could foreseeably pay back any loan payments during that period because I will be moving from New York to Georgia.
It will not ‘void’ the grace period and you will have to begin repaying the loans 6 months after you leave school. If you go back to school, you will go back into deferment on these loans. However, if you drop out, you may not get more loan money for a future semester until you have made academic progress (SAP). If this is your first semester, you probably have half that amount in loans (not $5500 but $2750).
Two things here: You will have 6 months from the official date of withdrawal for a grace period on loans that have never used the full grace period; any loans for which the grace period is expired will go into repayment as of the date of withdrawal.
You do not just get to keep your loans. The school has to do a Return of Title IV Funds calculation. Some funds will be returned, based on the amount you have “earned” as of your date of withdrawal. You may very well end up OWING your school. In addition, your loan eligibility at the new school will be limited by the dates of your current loan disbursement (if the loan period of the current loan is Aug-Dec, you may not be able to borrow again until Jan). Please talk to your financial aid office to find out how your plan will actually play out.
Federal loans are released by semester, so you’ll only get $2750 for the fall. I’m not sure if the PLUS loans are split by semester or if you can get them all at once, but @Kelsmom might know. If you get the whole $9k at once, you’ll have $11,750 in your account. However, the last day to drop [CUNY classes](http://cuny.edu/academics/calendars/fall-2016.html) for a 25% refund was September 14. If you withdraw, you’ll still have to pay the [url=<a href=“http://www2.cuny.edu/financial-aid/tuition-and-college-costs/tuition-fees/#1452179204200-d27abe14-99f4%5D$4800%5B/url”>http://www2.cuny.edu/financial-aid/tuition-and-college-costs/tuition-fees/#1452179204200-d27abe14-99f4]$4800[/url] OOS tuition. That leaves you $6950. If you can afford the living expenses through the end of the year, you might as well stay and earn the credits because you’re going to end up paying for them anyway.
I’d apply for a transfer for next fall. That gives you time to return to GA and get a job to pay down the PLUS loans before you enroll in college full-time next fall.
nothing is inevitable at this point, and DO NOT do a thing until you sit down with a financial aid officer (bring all your supporting documents) and walk through various scenarios.
I know lots of kids who just decided “I shouldn’t be here” and dropped out. Their loans haunted them for years- there is a smart way to figure out transferring to a different program and a dumb way (actually about five dumb ways). Do not do a thing- and you need to continue to go to class and do your work, sit for midterms, etc. until you have an actual plan (and saying “I shouldn’t be here anyway” is not a plan). If you can pass your courses this semester you are in a substantially better place both from a financial angle and an academic angle. You aren’t going to get a do-over by transferring… those incompletes and F’s don’t magically go away when you move to Georgia.
So focus on two things- passing your classes right now, AND meeting with a financial aid officer to walk through your options.
I wonder how the parents feel about this plan, given that the Parent PLUS loans are THEIR loans. Are they comfortable with your plan for their money?