I second the comment about asking to take a break. Some schools are very accommodating, others are not, it's always worth a try.

If you can't, though, and you find yourself really overwhelmed, there's nothing wrong at all with dropping out. Choosing your health over school is difficult, but it's important to take care of yourself! School will always be there to try again in the future, and if you don't have any direction or idea where you want to go right now it may be helpful to use the time away to think about that.

I nearly dropped out last fall, and only didn't because my school offered to let me go on leave for the rest of the year. Even if I did have to drop out, I wouldn't have regretted the decision in the slightest. Depression is a monster to deal with even when you have no obligations, and school on top of that is enough to overwhelm anyone.