(a) A state institution of higher education shall permit military reserve and national guard personnel who are attending the institution and are called to active duty the option to withdraw, even if the deadline to withdraw from courses has passed, or to receive a grade of incomplete in any course in which a service member is enrolled. The withdrawal or the grade of incomplete shall be reflected on the service member's transcript. A service member who withdraws from a course shall be eligible for a tuition credit or refund under subsection (c).

(b) If a service member is called to active duty and must withdraw from a course or receive a grade of incomplete, then the withdrawal or grade of incomplete that is related to the service absence shall not affect eligibility or continuing eligibility for state or institutional financial aid, including scholarships or grants, upon reenrollment at the institution. The semester hours attempted for courses from which the military service member withdrew or received a grade of incomplete shall not count against any limitation or receipt of state or institutional financial aid, including scholarships or grants. Future consideration for state or institutional financial aid, scholarships, or grants shall not be affected by the withdrawal from a course or the receipt of a grade of incomplete due to mandatory service obligations.

(c) Military reserve and national guard personnel who are students attending a state college or university located in this state and whose active military service occurring after August 1, 1990, mandates that they be away from the college or university during a school term shall be entitled to a credit for tuition or a refund for each credit hour paid by or on behalf of the student for that school term. Credit shall be given only if the reserve or national guard student did not receive a final grade in the class or course for which tuition credit is sought.