This study examines the impact of adopting a less strict academic dismissal policy on students' academic performance. By utilizing academic performance panel data of students attending a private university located in Northern Taiwan from the 2011- 2014 academic year, we find that the policy may increase the students' failed-credit proportion and the likelihood of half the number of credits failing. In addition, this policy may decrease the weighted Z scores. These findings may be driven by the fact that students put less effort into their studies.