On 21 October 2005, the revised retention policy per Pamantasan Administrative Order No. 19, which requires freshmen to maintain a GWA of 2.25 and a grade of 2.50 in the higher years on a semestral basis to attain a Good Standing (GS) status, initially took effect at PLM. According to the new guidelines, students who fall short of the required GWA are now allowed to shift to another academic program at PLM that has a lower retention criteria and will not lose their non-paying status. The Warning status was removed and students who fail to meet the criteria of GS are automatically given the Probationary status. Probationary students may regain their GS status immediately after a semester of satisfactory performance. If a probationary student fails a certain subject or has incurred a GWA that is below the acceptable standards required by the academic program or college, he is instantly subjected for expulsion, and is given the option for transfer to another university.

Every college has imposed its own retention criteria. For instance, in the College of Accountancy & Economics, a GWA of 2.00 must be maintained without failing grades in all major subjects. In the College of Mass Communication, students must maintain an average of 2.25 or better without failing grades in all major subjects or must not have more than two major subjects with grades of 3.00 or a combination of 2.75 and 3.00. Psychology students must maintain a mark of 2.50 in all psychology subjects and 2.00 in English or major subjects for Bachelor of Science in Tourism, Hotel and Travel Industry Management. In the case of the PLM College of Nursing, students with a GWA of 1.75 or better but with failing grades are considered disqualified from the said program.

Any student may shift from one college to another during the second semester but must satisfy the specific criteria of the degree program and be able to finish the program within the prescribed time frame.

In the previous years, students who failed to meet the PLM standards were given reconsiderations to be readmitted in the University. However, this practice is no longer permitted under the current academic policy so as not to compromise PLM's status as one of the country's top universities.