How Do I Pay for School If I Transfer?

College Transfer Article

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Cappex $1,000 Easy Money Transfer Scholarship

Are you worried about how to pay for school if you transfer? If this is you, you’re not alone. It’s estimated that 38% of first-time students transfer to a different college or university within their first six years. And transferring aid across institutions can be tricky.

We’re often asked questions about paying for school as a transfer student, including if transfer students get financial aid or what happens to student loans if you transfer schools.  This article answers these questions and explains how to pay for college as a transfer student. We discuss keeping any existing aid you have and finding new aid options. We also cover closing the gaps with a part-time or work-study job.

Our goal is to demystify what’s often a confusing process so you can transfer to (and succeed at) a school that better meets your needs.

Talk with Your Financial Aid Office

To start, we recommend going to the financial aid office at your new college or university to discuss your options. By talking to the financial aid office, you can learn if they participate in federal student aid programs and how much aid you will receive from the school.

If your current college is giving you a hefty sum, you’ll want to ensure your new college or university can at least come close to offering similar support. 

If there’s a big difference between the tuition at your current school versus the school you’ll be transferring to, it may be easier to understand these things in percentages. For example, if your tuition is $26,000 per year and the school awarded you $10,000 in merit aid, it pays for 38% of your tuition. 

Just because your new school is also offering $10,000 in merit aid doesn’t mean that it’s equal in value to your current school if the tuition is more like $39,000. In this scenario, they’d only cover 25% of your tuition. 

Recognize that transferring colleges mid-year could lead to less financial aid

One prevailing concern among transfer students is that they’ll get less financial aid than incoming first-year students. The truth is that the amount of aid you’ll get varies from student to student and school to school. Some scholarships are only available to transfer students. So don’t give up.

But one thing to remember is that transferring mid-year may lead to a more difficult time securing college and federal aid funding. Many schools have a finite amount of money to give away each year, so if you transfer midyear, you might miss out.

Depending on the available funds remaining at the new college, they may be unable to offer you the merit aid you deserve. Also, depending on what state you reside in, the allotted financial aid for the year could already have been disbursed. This is just something to keep in mind as you navigate the process.

Update Your Scholarship Providers

If you have any scholarships, you’ll want to ensure that they follow you to your new institution, especially if they’re renewable for multiple semesters or years. Send a quick email to your scholarship providers to sort out what you need to do to transfer them. Get exact dollar amounts and bookmark or save any forms you may need to fill out to renew or request the funds be sent to a different institution. 

They may request that you provide them with an acceptance letter to the new institution, so the official switchover may have to wait until you receive that. But at least you’re ready when the time comes.

Transfer Your Federal Financial Aid

When you were in the financial aid office, you should have checked to see if your new school participates in the federal student aid programs. If they do and you receive federal aid, you’ll have to do a few things to ensure your aid makes its way to your new school

The first of these steps is updating your Free Application for Federal Student Aid (FAFSA) to reflect your new school’s information. The FAFSA is available on October 1st of each year.  Consider filling it out immediately, especially if you’re in a first-come-first-serve state. 

An overview of Return of Title IV Funds (R2T4)

As we mentioned earlier, transferring mid-year can make things complicated. There’s an equation used to determine federal financial aid when transferring schools mid-year—each student is only eligible for so much money. Since tuition, opportunity, and more are likely to change when moving schools, it gets even more complicated. 

The R2T4 formula considers the cost of attendance gaps (tuition changes), the college's refund policy, and the return of student aid funds to the government to calculate the amount of financial aid available that can go toward your new school for the year. Unfortunately, this can sometimes wind up with you owing money to your current school, and they can do things like withhold your transcripts if there are unpaid bills on your account. 

You’ll really want to have an open line of communication with someone in your current school's financial aid office to ensure that you’ve calculated everything correctly. 

Moving between your freshman/sophomore or sophomore/junior years is easier by comparison. When you fill out your FAFSA for the upcoming year, you’ll add the school code to your list, giving them access to your information. There won’t be any complicated R2T4 calculation because you’re starting with a clean slate on your financial aid usage for the year. As always, apply for financial aid as soon as possible.

a college student works on his laptop to transfer his financial aid

Transfer Your Student Loans

Remember when you wondered what happens to your student loans if you transfer? Well, if you took out student loans, you need to give your loan provider a call to transfer them to the new school. Loans do not automatically transfer with you. This is especially important if you’re switching colleges mid-year. 

Get the exact total of your loan and a breakdown of the process to keep together with all the other essential information. You’ll also likely have to fill out an in-school deferment form unless you opt for an income-driven repayment plan to squash as much of that accruing interest as possible. 

Understand How Your Student Loans Really Work

We often think of federal student loans as being paused until the four years of school are up, but that’s not the case. Every year you reapply, the Direct Subsidized and Unsubsidized loans enter a state of “repayment.” 

Yes, you read that correctly. It’s a particular form of “repayment” called in-school deferment, where you don’t have to pay monthly at this point, but your balance does accrue interest. That interest accrues throughout the entire time you’re completing your undergraduate degree. Remember, this is a tidbit, even if you decide not to transfer.

There are two routes you can take to deal with this. You can take the in-school deferment if applicable—typically, Federal direct loans, Federal Family Education Loans (FFEL), Perkins Loans, and PLUS loans are eligible. Regardless, you’ll want to call and confirm you’re eligible, which usually requires enrolling at least half-time as a regular student while maintaining satisfactory academic progress.

With this route, though, interest will accrue on certain types of loans (such as unsubsidized loans), and it can be shocking to learn how much it can add up. It can be especially jarring if the interest charges capitalize (which happens after four years of in-school deferment), which means that the interest is absorbed into the principal. 

There is another option, however. You can try to utilize an income-driven repayment (IDR) plan. Spreading your payments over 20 or 25 years, IDR plans only charge you a certain percentage of your discretionary income. If you’re making $100 a month and the repayment plan caps at 10% of your income, your monthly loan payment would be $10. 

We recommend that you choose your repayment option carefully. Both options have their upsides and downsides (interest accruing vs. paying now), so talk to your parents or financial advisor to figure out what’s right for you. 

As always, the general-best-advice-available is to take out as little as possible in student loans. And accept all forms of federal loans first, which will typically have lower interest rates and easier-to-fulfill repayment plans. 

Seek Out Transfer Student Scholarships

Now that you’ve addressed the process of transferring your existing student aid and loans, it’s time to look for new scholarship opportunities. We recommend talking with your advisor to ask about scholarships and then searching for some on your own.

You can access a complete list of scholarships on the Cappex website. Filter your search by your current class - college freshmen, sophomore, or junior - to get a glimpse of the scholarships you can apply to from Cappex. 

You might be surprised by the number of scholarships specifically available for transfer students. Here are just a few of the many options out there.

Take on a Part-Time Job or Work Study Opportunity

Finally, if you end up with a financial aid gap, consider taking on a part-time job during the academic term or summer break. Federal Work-Study jobs are usually an excellent option. They can include opportunities like working with a professor on a research project, supporting your school’s IT department, working in the library, and so much more.

If you’re interested, check the box on the FAFSA to indicate that. Doing so won't commit you to work during the school year, but it may give you the option if it’s available.

Off-campus jobs are another route to go. Many jobs convenient to campus may pay better than a work-study job. This may be a good option for working during the summer since some jobs may not be able to schedule around your classes.

Final Thoughts on Paying for School as a Transfer Student

However, all this advice is primarily centered around you having found the right school to transfer to and financial aid money to help you pay for it. Good thing you’re here with Cappex.

Cappex helps transfer students discover colleges that match what’s most important —from budget to majors to style. Our college match tool is essential since you’ve already been through the college search process once and are not happy with your current institution. You can also access scholarships, calculate your chance of being accepted, and much more with Cappex.

Click the link below to get started and apply for our $1,000 transfer student scholarship. No essay or minimum GPA required.

Get the Cappex $1000 Transfer Student Scholarship

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