College education doesn't come cheap these days. In a perfect world, you finish your degree on time, get a good-paying job right after your studies are over, then repay your student loans and get on with your life. But incidents can happen that might derail your progress, like not staying in good academic standing and getting suspended or dismissed.

If you are dismissed from your university and have taken out financial aid to cover it, you will need to know what happens to that debt and if you're still responsible for it.

Loans Don't Go Away

Once you take out loans, you have to repay them, whether you finish your education or not. If you drop out, you're on the hook for the money you borrowed up until the time you stopped being a college student; then you have a six-month grace period until you have to start paying back the loans. It's slightly different if you get dismissed or suspended, however.

If you receive notice of an academic dismissal starting in the upcoming semester, your student loans won't get disbursed to your school for that term, and you will not be responsible for paying that amount back. If you already paid some of your tuition for the upcoming term, such as housing fees, to your university, you may receive a portion of this money back as a refund.

In the case of a suspension or dismissal that takes effect mid-term, you most likely have to pay tuition for the classes you signed up for that term. Most schools have a drop date, which is the last date of the semester you can drop a class without having to pay tuition for it. If you haven't withdrawn before this date, you will have to pay tuition, and if you used financial aid money for it, you would have to repay those loans.

College Refund Policies

Some colleges follow a refund policy known as Return of Title IV Funds (R2T4). R2T4 is a calculation used to determine how much financial aid a student has “earned” during a term and how much they should therefore be refunded if they withdraw (or get an academic dismissal) before the end of the term. Any financial aid that you did not earn returns to the government, and you are not responsible for repaying it if it was a loan.

The formula typically prioritizes returning loans over grants, to leave you with as little debt as possible. Generally, after you've completed 60% of the semester, your aid is considered to have been 100% earned, and you will be responsible for the entire term's worth of financial aid.

Dealing with College Disciplinary Procedures

You don't want to be in debt for an education you didn't finish, so working to avoid disciplinary judgments from your school in the first place is the best course of action. By consulting with an experienced student defense attorney-advisor like Joseph D. Lento, you can work to keep the opportunity for a college education in which you have already invested so much. Contact Lento Law Firm today by calling 888-535-3686.