I am not a big fan of the way any of this works, but one silver lining I have found is that even when students don't re-enroll immediately, you continue to see them around campus.
For example, I started by playing the Best Friends household for one term to test things out. After that term, they did not re-enroll and I moved them out (not into a house, just into the households bin... and I unchecked the heart, so they are in "other households"). Yet as I have played other Sims at Britechester, I continue to see them around campus from time to time... particularly Becca, who even participates in the debate events.
One thing I'm planning to test soon is whether editing sims in CAS is sufficient to make them "played sims" for purposes of pausing their degree progression. CAS edits, even just changing an outfit, always moves them into "my households" and even if I move them back into "other households," in the past this has at least always been enough to keep them from being culled. So I'm skeptical, but it would be nice if it would make the game consider them "played" for this purpose. Fingers crossed!