The college school year will be ending shortly, and for most students, there have been many changes both academically and personally. College exposures students to a new way of thinking and increases the student exposure to new opportunities. In addition, for many students, a new level of maturity occurs. This new maturity may cause some students to change their plans or make them rethink what their college experience should be.
It may result in a college transfer. Approximately 35% of students will transfer within the first two years of college, and over 50% will change majors at least once during their college experience. Having a plan that has flexibility will improve the student’s probability of a successful outcome.
Has your child approached you about the possibility of changing colleges? According to the September 2017 Government Accountability Office study, one in three students will change colleges before they graduate. What is the impact of the college transfer? It varies depending on the student, but for many families, it involves extra expenses and length of time for the degree. It is also often filled with difficult decisions as the student navigates the path to their new institution.
Students transfer from colleges for a variety of reasons. It may have been the wrong college from day one. Other reasons can vary from campus life, academics, financial, major change or a variety of these reasons. Regardless of the reason, there are certain factors students need to understand before they begin the college transfer process.
I have grouped specific areas that students should investigate before making a move to transfer. Some of these areas involve the family reviewing their four-year paying for college strategies. This analysis is especially crucial if you now expect the college timeframe to be extended past the planned four years. Many families overlook the financial consequence of this extended time.
Don’t get blind-sided by the unexpected costs of lost credits when you want to transfer to a new college. It may not happen to your child, but it occurs more often than you think. It even occurs when you have good grades in specific courses.
Do your research and investigate the number of accepted college credits that will be honored at the new institution. During your review, a student may find that some of their current college credits may not be eligible for transfer to the new institution due to the curriculum or grade attained by the student. It is important to understand now that not all college courses are equal and college curriculum is not standardized.
How do you begin this process? In preparation for this course credit review, you need to get an unofficial copy of your transcripts and a course description for each course. Having this information handy will make the credit transfer discussion more comfortable with the new college. Call or make an appointment to speak with an admissions representative. Some colleges have special days for just transfer students. It is essential to find out how many of your courses count specifically toward your graduation requirement. If you are changing majors at the same time of the transfer, this review could become painful but necessary.
There are other reasons for reviewing your academic standing. Understanding the educational requirements that will count toward attaining your degree at the new transfer institution will help the student determine a realistic graduation date. More importantly, it will allow the student to calculate the possible added cost that will be incurred by adding time to the college experience. Often, students think that they have reached a certain grade level by the courses they have taken but in reality, a student may be short one or two classes because of credits not being honored as major electives or counted at all. Transferred grades are also important to review the course themselves. Check the major at the transfer school and determine if any courses require a minimum transfer grade.
Loss of Financial Aid
The other area that families often do not consider is the possible loss of financial aid. The new financial aid package may not be the same as the initial offer, if you had applied to the school, previously. If a student is receiving financial aid based on need, every school has a different amount of need-based aid that the school meets. Depending on the time of year and that school year, a student’s transfer package can be significantly different.
A student should also understand that the financial aid process has both academic and annual award limits each year. If a student transfers and does not maintain their same academic progress, it may reduce the amount available through the federal financial aid process. These amounts are often prorated based on the student’s academic progress.
Part of the transfer process will necessitate the family reviewing their plan for paying for college. Many families utilize federal loans to help supplement the cost of paying for college. If this had been part of your strategy, then it is essential that the family update the FAFSA with the new school. Once submitted, the new college will recalculate the student’s eligibility based on the family’s financial information.
The family’s eligibility for the federal loans will be the same if the student has maintained similar academic progress. The institution scholarship money may vary significantly from the original award since this is from the college. This analysis is why families should check with the new college to determine their policies and available funds before making a final decision.
Impact on Federal Loan Limits
As part of the transfer process, families will also have to review their current debt structure. There are specific limits to the federal loans that the student can obtain in their name with limitations based on year and the student’s academic progress. The student’s academic progress (SAP) is crucial since it will determine the student’s federal loan limit.
As an example, a student transfers to a new college after their freshman year. They had received $5,500 of Federal loans. The second-year federal loan limit for a dependent student is $6,500. Due to the transfer, only 24 of the 30 credits were accepted by the new college. As part of the SAP, the transfer student is not a full academic second student. The $6,500 will be pro-rated down to reflect the missing six credits at this time. Understanding the credit transfer is why it is essential for the family to understand the academically level once credits are transferred to the new institution.
Grace Period on Loans
Students with subsidized direct loans need to be aware of the grace period rules. If the student enrolls as a full-time student immediately and has direct federal loans, then the loans will stay in deferment. On the other hand, if the student decides to take time off or return on a part-time basis the in college deferment may not be available. Before making your transfer decision make sure you understand the status of your existing student loans. Payment of federal loans will need to start in six months unless the student is re-enrolled. You are only allowed one six month grace period for undergraduate loans and one grace period for graduate loans.
Expected Family Contribution (EFC) and transfer timing
The timing of the transfer can work both ways when you have multiple children in college. For some families, being in college longer may help other family members significantly. The most significant factor in lowering a family’s EFC is based on the number of children in college at one time. By creating a family timeline and seeing each child’s college graduation date, families can review how their financial aid may change. This factor is especially important for families who qualify for need-based financial aid. With this approach, you can see when college overlaps will occur and the impact it will have on your financial aid position.
A common error in this understanding the family timeline is it only pertinent for undergraduate students. Once a student has their undergraduate degree, they become an independent student, and the parent information is not required for the financial aid process. With this approach, you can see when college overlaps will occur and the impact it will have on your financial aid position.
Each institution has its merit aid and specific academic qualifications for this money. Checking what is available should be done at the same time as your college credit approval. In most cases, the better merit aid is issued while the college is trying to attract entering freshman. Some schools do offer attractive merit money for transfers. For many transfer student, a better place to ask is under the specific chair of each major. Many departments offer scholarships for upperclassmen that have shown above average expertise in their field of study. Understanding the new cost and possible loss of all or part of existing merit money will have to be part of the paying for college strategy that you will need to consider.
There are many reasons why a child may decide to transfer to a new college. My best advice is to do your research and make sure you get clarity from the admission office before you make your decision to change institutions. Having all this financial information will allow you to plan more effectively and utilize your resources to pay for any added expenses. Some families have difficulty engaging their child in the discussion of the cost of college. By using our innovative approach of the “In College Payer,” parents can discuss with their child what costs will be until graduation and the debt needed to reach that goal. This process is especially helpful in a transfer situation when additional time may occur. It will also help you engage your child in their financial future. By explaining what their income will look like, selecting the proper repayment option and factoring other personal living expenses, the student can see the financial consequences of their decisions