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If you’re thinking about transferring to a different college, that’s undoubtedly a big decision. It’s also a common one — according to a survey by the National Student Clearinghouse, approximately one-third of college students will transfer schools. You might be transferring because you’re moving from a two-year college to a four-year college, or perhaps because you didn’t get into your first choice school right out of high school, or because you feel that your current college is not a good fit for you. Whatever the reason, there are some factors you’ll need to consider, especially financial ones such as student loans and scholarships. Read on for a few important things you should know.
You may have to update your FAFSA.
The new school you transfer to will need to access your Federal Student Aid (FSA) report, which provides the financial information your school needs to determine your financial aid awards. First, you’ll need to list your new school on your Free Application for Federal Student Aid (FAFSA). Then, you may or may not need to update a current FAFSA depending on when you decide to transfer. For example, you’ll have to update your FAFSA to include your new school’s information if you’re planning to transfer in the middle of a school year and want to use federal financial aid or student loans. However, if you’re planning to transfer at the end of a school year, all you have to do is include your new school when you fill out a FAFSA for the upcoming year.
Get familiar with how student loan disbursements work.
Loans are disbursed by academic term to the college rather than to the student. As a result, students who transfer have to log into their Federal Student Aid (FSA) loan account and add the new school so that their FAFSA data is transferred along with their student loan eligibility. This is important to know so that you are correctly following the steps you need to take during the transfer process.
Know that you are responsible for paying the student loan.
While you don’t have to repay your student loan right after you transfer, you’ll still have to deal with it at some point. You can continue to defer the loans while you’re still in school, but ultimately you are responsible for paying back all loans — including interest accrued — for the school you transferred from, even though you didn’t receive your degree there. Keeping this in mind is important so that you know what you are still responsible for financially even after you transfer.
It’s possible that your financial aid award will change.
Most of the time, your federal aid award at your new school should be about the same as it was at your former school — although, of course, there are sometimes exceptions. For example, if you received institutional or state aid at your former school, you might see a change in the amount of aid you receive at your new school. This may happen if you were attending a state school and received a state grant, but then you transfer to a new school in a different state, which means you could lose access to those state grant funds.
What’s more, if you transfer in the middle of the academic year, you likely won’t receive either institutional or state aid for the remainder of the year. Since most states and universities have a limited amount of aid available and distribute it on a first-come, first-served basis, they likely won’t have enough aid left for you in the middle of the year (because they already distributed it to students who enrolled at the beginning of the fall semester).
Additionally, some private student loans allow you to borrow up to the cost of attendance at your school. As a result, if the cost of attending your new school is significantly higher or lower than attending your former school, the amount you are eligible to borrow will likely change.
Don’t wait to apply for scholarships.
When applying for scholarships, don’t make the mistake of waiting. As soon as you decide on which schools you’re interested in applying to, reach out to their financial aid offices to confirm whether or not they provide scholarship help for transfers. Taking action right away will ensure that you have the information you need ahead of time.
Transferring colleges can come with its challenges, but if you make sure you do your research, you should be well prepared to handle the financial aspects, including what to do about loans and scholarships.
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