Rotational Play and University

The term continues even if it’s not the active household. In my experience, they automatically re-enrolled and got a B and B-. It seems to have given them a random number of classes.
** ETA: Sorry, I was confused about this. That is how it works for other playable sims, but not the sims you’ve played yourself. For the sims you’ve played yourself, I’ve experienced 2 different things when rotating back to them. In one, I was immediately given a chance to re-enroll, and it appeared he got an average grade because his GPA went from an A+ to an A. In the other household (another dorm), I returned to find them On Probation, but I get an option to enroll again and the Merit Scholarships are still there, so that’s weird. **

So if you want your sims to graduate with honors, make sure you play them through their entire term each time. You will lose scholarships if you do not immediately re-enroll when the term ends, though I believe you can re-apply later, and you’ll be given 4 hours to pack up your things if you are living in Uni housing.