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Students with health impairments represent a growing sector of the college population, but health based disparities in bachelor’s degree completion persist. The classes students pass and the grades they receive during the first year of college provide signals of degree progress and academic fit that shape educational expectations, potentially subjecting students to a cooling out process (Clark 1960). Using the Beginning Postsecondary Students Study (BPS 04/09), we compare the signals of degree progress and academic fit and changes in educational expectations between students with and without health impairments during the first year of college. We find that net of preparation, type of institution, enrollment intensity and first year experiences, students with mental impairments are more likely to lower their educational expectations after the first year of college, due partially to negative signals of degree progress and academic fit. Students with physical impairments are more likely to receive some negative signals of degree progress and academic fit than students without health impairments, but their educational expectations remain intact. These results suggest that the standards of degree progress and academic fit during the first year of college disadvantage students with health impairments and students with mental impairments are disproportionately cooled out.