Student protesters facing disciplinary action may also deal with financial setbacks

Some college students protesting Israel’s war in Gaza have faced disciplinary action in recent weeks, with universities handing down suspensions and expulsions.

The consequences of these temporary or permanent bans from campus “may also involve financial setbacks,” said higher education expert Mark Kantrowitz. Depending on the college and disciplinary action taken, those can include the loss of scholarships, previously paid tuition, and access to meal plans and even on-campus housing.

“Students who are suspended do not get tuition refunds,” Kantrowitz said.

More from Personal Finance:
Advice about 401(k) rollovers is poised for a big change. Here’s why
IRS free filing pilot processed more than 140,000 returns, commissioner says
Here’s why new home sales inch higher despite 7% mortgage rates

More than 100 students have been suspended across the U.S. in recent weeks, according to Kantrowitz, who made a rough calculation from news reports. The real number is likely much higher, but a federal regulation curbs how much colleges can publicly disclose about student suspensions.

The protests emerged in response to Israel’s offensive in Gaza, which it launched after a Hamas attack on Oct. 7 that Israel says killed 1,200 people. Israel’s retaliatory attacks on Gaza have killed more than 34,000 people, including more than 14,000 children, according to local officials and the United Nations.

Here’s what to know about the financial risks for suspended and expelled student protesters.

According to an email reviewed by CNBC from Massachusetts Institute of Technology President Sally Kornbluth to the MIT community on Monday, students in encampments were notified they could face a range of punishments, from a written warning to an “immediate interim full suspension.” The email says those consequences depended on factors such as whether the students agreed to voluntarily leave the encampment on Kresge Lawn and whether they already had a pending case or sanction on their record from the campus discipline committee.

Those who are handed the harsher penalty will not be allowed to reside in their assigned residence hall or to use MIT dining halls, although they will continue to have access to health services, the email said.

MIT did not immediately respond to a request for comment.

“It’s devastating for students who are denied those basic services,” said Martin Stolar, a lawyer in New York who has defended protesters for decades.

Beyond the risk of losing their housing, suspended college students across the country may not be able to complete their courses and get credit for them, Kantrowitz said, and likely won’t receive tuition refunds.

It’s uncertain whether suspended or expelled students will be refunded any leftover money on their meal plans, he said.

“Some colleges issue a refund of leftover balances when a student is no longer at the college, whether due to graduation, expulsion or some other reason,” he said. “Some colleges roll over the credit balance to the next year. Other colleges do neither, so the student loses the balance.”

In recent weeks, students have been disciplined on charges that they maintained unauthorized encampments that disrupt college life and infringe on the rights of their fellow students. Some students are facing allegations of vandalism and destruction of property.

“There is a dire humanitarian crisis occurring in Gaza that must be addressed, and I am personally grief-stricken by the suffering and loss of innocent lives occurring on both sides of this conflict,” George Washington University President Ellen Granberg wrote in a statement on Sunday.

“However, what is currently happening at GW is not a peaceful protest protected by the First Amendment or our university’s policies,” she said. “The demonstration, like many around the country, has grown into what can only be classified as an illegal and potentially dangerous occupation of GW property.”

But there’s disagreement over when protesters overstep their rights.

The American Civil Liberties Union of Indiana filed a lawsuit against Indiana University this month, accusing the college of violating the First Amendment rights of three plaintiffs facing a 1-year ban from campus for their participation in the political protests, including a tenured professor.

A spokesperson from Indiana University said it does not comment on pending litigation.

Suspended or expelled students may also get their federal student loan bills sooner than they expected, Kantrowitz said.

“Generally, if a student drops below half-time enrollment for at least six months, their student loans will enter repayment,” he said.

Those who can’t make their payments have the option of putting their loans into deferment or forbearance, he added. However, pausing loan payments can cause interest to accrue and borrowers’ balances to grow.

If a suspension ends and a student returns to college before six months, their grace period should reset, Kantrowitz said.

The U.S. Department of Education did not immediately respond to a request for comment on how it was notifying student protesters of any financial impacts, including the possibility of an early start to their loan payments.

It’s possible that a suspension or expulsion will be marked on a student’s transcript, which could make it harder for them to transfer to other colleges, get into a graduate school and land jobs, Kantrowitz said.

However, this particular disciplinary action might not be looked at the same way as other academic or conduct charges, Stolar said.

“We’re talking about people involved in protest activity, which is very different than something on your permanent record saying that you cheated on an exam or assaulted another student,” he said.