About half of all college students will fail to complete thier degree programs.

However, they can recoup some of the money spent on that education, and The Wall Street Journal offers guidance on how to get refunds.

The last thing most parents expect to see packed for college is a pair of cold feet. But a student threatening to drop out of school is no longer just a cute college rite that falls between midterms and winter break.

Nearly half of Americans who matriculate into four-year schools don’t graduate, according to a recent study by the Organization for Economic Cooperation and Development. This places the U.S. behind nearly every major industrialized country when it comes to rates of college completion.

The pros advise families not to hedge against a child’s perseverance with products like tuition-refund insurance, which some small private schools offer to parents. According to Mark Kantrowitz of Edvisors Network, these policies are typically saddled with pre-existing conditions and special limitations that might give a little peace of mind, but not much money back.

But if leaving school is the only option, here’s a look at the financial issues parents and students should consider, and a few tips on getting at least some of the money back.

Here’s the good news: College finance advisers say there are ways to recoup big, upfront costs like tuition, room and board for the current semester, depending on the timing and the school. The bad news: The earlier the student decides (which could also mean the hastier the decision), the better chance of getting the money back.

…..Students don’t have to pay the government back Title IV federal grants for semesters already completed. These grants are disbursed during each term, and if a student drops out after completing over 60% of a term, he or she also does not need to repay the government the grant money for that term, says a spokesperson for the Department of Education.

…For debts already incurred, say, from previous terms, experts say you should expect to repay everything.

Leaving even a small bill unpaid could seriously hurt a student’s prospects down the road. Most schools won’t allow former students to re-enroll if they owe the school money. And, according to Mr. Kantrowitz, a school can refuse to provide official transcripts if a tab isn’t settled. This could make transferring—even to a trade or community college many years later—a lot harder.

…If there is a younger brother or sister, or a sibling already in college, most 529 college-savings plans can be transferred to siblings or other first-degree relatives.


 
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