How Might Transferring To Another College Affect My Financial Aid?

If you’re considering transferring to another college, you’re not alone. Plenty of students switch schools for various reasons, like finding a better program or wanting to be closer to home. But before you make the leap, there are important factors to think about—especially when it comes to your credits and financial aid. Transferring can impact everything from the amount of financial aid you receive to your timeline for graduation. Let’s break it all down so you can make an informed decision.

How Transferring To Another College Might Affect My Financial Aid

1. Will Your Credits Transfer?

One of the biggest concerns when transferring is whether your hard-earned credits will actually count at your new school. While many colleges accept transfer credits, it’s not always a seamless process. Each school has its own rules, and they may not accept every class you’ve taken.

If a significant number of your credits don’t transfer, you might end up having to retake classes, which could delay your graduation. In addition, your new school may categorize you as being in a lower grade level if some credits don’t count, which could reduce the amount of financial aid you’re eligible to receive. This means you could potentially borrow less in federal loans because your loan amounts are often tied to your grade level.

2. Federal Loan Limits and Lower Grade Levels

When you transfer, the amount you’re allowed to borrow in federal loans might change depending on how many credits you transfer and your new grade level. Federal loans are capped at certain amounts based on your year in school, so if your new college places you in a lower grade level because not all your credits transferred, you could end up being eligible for less financial aid than you had anticipated.

For example, if you’re currently classified as a junior at your current school but are bumped down to a sophomore after transferring, the amount you can borrow in federal loans will decrease accordingly. This could mean that you’ll need to take out private loans or find other ways to cover your costs.

3. Financial Aid Doesn’t Transfer Automatically

Here’s something many students don’t realize: Your financial aid package doesn’t automatically follow you when you transfer. Scholarships, grants, and loans are typically based on the Cost of Attendance (COA) at your specific school, so what you were awarded at your current school may change significantly at a new one. And unfortunately, most institutional scholarships and grants are tied to the school itself, meaning you’ll likely lose them if you transfer.

Federal financial aid, such as Pell Grants and federal student loans, will still be available at your new school, but you’ll need to update your FAFSA® (Free Application for Federal Student Aid) to include your new school’s information. Keep in mind that your aid package might look different at the new school, especially if the COA is higher or lower than at your current school.

4. Watch Out for Reduced or Lost Scholarships

Scholarships are another key thing to keep in mind. Many scholarships are school-specific, so transferring could mean losing out on some of the free money you’ve been counting on. Even merit-based scholarships, which are often awarded for academic achievement, might not be available at your new school—or they could be reduced.

The same goes for need-based scholarships and grants. Your new school might have different financial aid policies, and there’s a chance their funds for need-based aid could already be used up, especially if you’re transferring mid-year. Some schools do offer specific scholarships for transfer students, but these can be limited.

5. Additional Costs to Consider

Beyond tuition and fees, transferring could bring new living expenses. Moving to a new school might mean higher housing costs, especially if you have to live off-campus. If your new school is farther from home, travel expenses could also add up quickly, especially during holidays or breaks.

You might also need to consider any fees associated with transferring, like application fees or transcript fees. And if you’ve already paid for things like parking permits or meal plans at your current school, you might not be able to get a refund, so that’s another expense to keep in mind.

6. The Timing of Your Transfer Matters

When you transfer can have a big impact on your financial aid and academic progress. If you transfer mid-year, there’s a chance you could miss out on state grants or other forms of aid that are distributed on a first-come, first-served basis. Plus, transferring mid-year might make it harder to find housing or register for the classes you need.

On the other hand, transferring after completing a full academic year might give you a better chance of keeping certain types of aid, and it can ensure that your loan eligibility increases as you advance in grade level.

7. Do Your Homework Before You Transfer

Transferring colleges can be a great move, but it’s essential to do your research. Start by contacting the financial aid office at your prospective school to understand how transferring will impact your aid package. Be sure to ask about scholarships and grants for transfer students and whether your current credits will count toward your degree.

Also, check out your new school’s COA. A school with lower tuition might seem like a great deal, but if you lose a lot of credits or miss out on aid, it could end up costing you more in the long run. Don’t forget to factor in living expenses, too!

Final Thoughts

Transferring colleges can be an exciting opportunity to find a better fit for your academic and personal needs, but it’s important to understand the financial and academic implications before making the move. Take the time to talk to your current and prospective schools, review your financial aid options, and consider how transferring will impact your credits, graduation timeline, and overall costs. With careful planning, you can make the transition smoother and ensure you’re set up for success at your new college.

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

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Daniel Bod

Writer at Going Merry

Daniel Bod is a seasoned higher education professional with two decades of expertise in financial aid. He began his career at Hofstra University in 2004, after completing his Bachelor's degree from Stony Brook University in 2000, where he provided comprehensive financial aid support to families from diverse backgrounds. In 2007, he transitioned to LIU Post and advanced to Senior Assistant Director of Enrollment Services, dedicating over ten years to assisting students and families in various capacities. During his tenure at LIU Post, Daniel also earned a Master's degree in Childhood Education. Transitioning to St. George's University in 2019, he spent over four years focusing on the financial needs of medical students. Daniel excels in advising on loan options and empowering students and families to make informed decisions about educational finances.