Leaving college without a degree is common. According to National Center for Education Statistics, only 62% of students graduate from college with a bachelor’s degree within six years. The remaining 38% of students often withdraw because of costs, family responsibilities or other factors.

If you drop out of school, you won’t graduate, but you could have significant student loan debt. Here’s what happens to student loans if you opt out before you graduate.

What it means to withdraw from college

When it comes to financial aid, withdrawing from school does not necessarily mean that you have completely dropped out of school. For federal loans and many private lenders, your status changes when you fall under part-time status – half of the expected full-time course load. The lender will mark you as withdrawn from school and your loans will go into repayment. Even if you continue to take one course per semester, lenders will change your repayment status as payments become due.

What happens to student loans when you drop out of school?

When you leave school or go under part-time status, your student loan the debt stays with you. Your loans cannot be canceled or canceled because you didn’t get the education you expected or couldn’t complete your program of study. However, you may be eligible for other programs, such as Public service loan forgiveness (PSLF), if you work for an eligible employer, even if you did not graduate from university.

When you need to start making payments depends on the type of loan you have.

Federal student loans

Once you fall under part-time status or withdraw from school altogether, the institution notifies your lender of the change in your enrollment status and your federal student loans go into repayment. However, some loans have a Grace period—A period when you don’t have to make payments, giving you time to find a job and get your finances in order.

With direct subsidized loans and direct unsubsidized loans, you have a six-month grace period. MORE LOANS do not have a grace period, but PLUS graduate borrowers are eligible for a six month deferral after leaving school or going under half-time status.

For parent PLUS borrowers, repayment begins after loan disbursement. However, parents can ask to defer payments for up to six months after their child has left school.

Once the grace period has expired, your payments become due. Your loan manager will automatically place you on the standard repayment plan. Under standard repayment, your payments are fixed and you will pay off the loan over 10 years.

Private student loans

Private student loan lenders have different rules than federal loan lenders. While you don’t have to make payments on federal loans for up to six months after your abandonment, private student loans may not have the same benefit.

Student loan repayment policies can vary widely from one lender to another. For example, CommonBond’s repayment options include a six-month grace period if you drop out of school. During this time, interest continues to accrue, but you don’t have to start making payments until the grace period expires.

If your loans are issued by RISLA, your repayment terms depend on the plan you chose when you took out the loan. If you opted for immediate repayment, your principal and interest payments begin when you are in school and continue after you leave or withdraw. If you have chosen deferred repayment, you have six months after leaving school before you have to start making payments.

Refer to your loan promise for the terms of your loan or contact your lender directly to ask how they handle payments.

What happens to other forms of financial aid when you drop out?

Student loans might not be the only financial help you’ve received, so you might be thinking: Do I have to repay financial aid if I drop out of a course? Well you are in luck. Here’s how other forms of financial aid – especially grants and scholarships – deal with dropouts.

Do you have to repay the grants if you quit?

In some cases, you may need to repay the grants you received to pay for your education. Here is an overview of the policies for the various grants you may have received.

Pell Grants

With Pell Grants, whether you should repay the grant depends on when you withdraw from school. If you drop out before the end of 60% of the semester, the government will expect you to repay part of the grant. If you drop out after 60% of the semester, the scholarship is taken for granted and you do not have to repay it.

TEACH grants

TEACH grants require recipients to teach for four years at an eligible school. If you do not meet this requirement, such as withdrawing from school before graduation, the TEACH grant is converted to an unsubsidized direct loan and will need to be repaid with interest.

Other grants

If you have received other grants from your school or outside organizations, check the grant agreement to see if you will need to repay part or all of the grant.

Should scholarships be reimbursed?

Institutional or private scholarships have their own rules on how scholarships are treated in cases where the student withdraws from school. Contact the issuing organization if you plan to opt out to determine if you need to repay the scholarship.

What to do if you can’t afford a student loan

If you have to drop out of school and can’t afford to pay off your student loan, there are several ways you can make your debt more manageable:

1. Apply for an income-based repayment plan

If you have federal student loans, you can apply for a income-based repayment plan (IDR). Once enrolled, your monthly payments will be based on a portion of your discretionary income and your repayment period is extended. Depending on your income, you may be entitled to a much lower monthly payment. You can request an IDR plan online.

2. Request for abstention or adjournment

Another option for federal borrowers is to apply for a tolerance or reprieve. If you’re eligible, you can defer your payments for several months without entering a default, giving you more time to get up. Contact your loan officer to see if forbearance or deferral is an option for you.

3. Contact your lender

If you have private student loans, you are not eligible for IDR plans for federal forbearance and deferment programs. However, some lenders offer their own forbearance programs or other payment plans for borrowers who are experiencing financial difficulties. If you can’t afford your payments, contact your lender to discuss your options.

4. Refinance your loans

Student loan refinancing is a process where you combine all of your existing student loans into a new loan from a private lender. When you refinance, you can change the term of your loan, with some lenders offering terms of up to 25 years. With a longer repayment term, you’ll pay more in interest charges, but you can get a significantly lower monthly payment.

You will lose the benefits of a federal loan if you refinance federal loans, so carefully weigh the pros and cons.