Facts to Know When Transferring Mid-Year with Student Loans

Facts to Know When Transferring Mid-Year with Student Loans

Did you know that if you change schools, reapplying for financial aid may be necessary?

Many students decide to transfer colleges part way through their schooling. Maybe you decided to go somewhere closer to home to save some money. Perhaps, your career path has switched courses and you have decided another school will suit your needs better. 

Some people simply don't mesh into campus life and need to transfer elsewhere. Regardless of your motivating factors, if you are relying on a private or federal student loan to cover your education costs, it is essential to understand how a transfer could affect your funding. You can enjoy a smooth transition if you plan ahead. 

Will my financial aid transfer with me to a different school?

Most financial aid offers are specific to a particular school and won't transfer with you if you change campuses.

Your first step is to reenroll right away. Most loans are automatically deferred when you are attending college. This means that there is typically a grace period when you do not have to pay the loan back for a certain amount of time once you stop being enrolled. 

However, when you are switching schools, you are essentially unenrolling at your initial school. You will have to promptly reenroll at your new school. Note, once your grace period ends, if you are not enrolled anywhere, you must start paying back your student loans.

Check-in with your lender ASAP

After you have enrolled at your new school, ensure that your loan servicers or lenders have updated your status to avoid any problems.

Note that It may take you longer to graduate if you switch schools (and it may not, depending on your program and schedules). You are required to fill out the FAFSA or Free Application for Federal Student Aid each year. You must maintain academic progress and continually meet the financial aid criteria to remain eligible for your federal loans. 

Take care of any accounts at your original school

You will have to wrap up some paperwork and financial details at your original school to ensure there is a smooth transition to the new institution. 

1. Contact the financial aid office about your transfer intention. Ensure that you have completely settled your account.

2. Get information about scholarships. Some scholarships can be portable between schools, depending on the fine print. Many schools have scholarships that are especially for students who have transferred. Speak with your financial aid office to familiarize yourself with the details.

3. Prepare to fill out paperwork. In the event you are conducting a switch mid-year, you may be required to officially cancel any subsequent financial aid disbursements and withdraw officially. 

4. Get in touch with private lenders if you have any private student loans. You will have to notify these lenders the same way. These loans will not transfer with you to your new school. You will need to decrease the amount of your loan and then reapply for extra financial aid for your new school if required. 

How to Apply for Student Loans at the New School 

1. The first step will be updating your FAFSA. You may need to update your FAFSA with a different Federal School Code if you have Unsubsidized Loans or federal Direct Subsidized Loans. Afterward, your new institution receives the updated FAFSA information and can award your aid properly. 

2. Lower your expectations and do not expect your new financial aid package to be identical to your original. If it is, wonderful; however, you may not receive the same amount at this new institution. 

It is common that the cost of the two schools may differ, dramatically affecting how much you are eligible for. Each school has different resources and various aid programs. When you transfer mid-year, expect that there are likely fewer funds to award due to availability. 

3. Determine loan disbursement timing by checking in with the financial aid office at your new school. The schedule may be affected when you transfer mid-year. There is a rule regarding multiple disbursements, allowing your school to release funds on two separate dates during the semester. 

If you are relying on loans to cover non-tuition items including textbooks and living expenses, this timing may impact your ability to cover these responsibilities. 

4. Determine your additional funding needs. If you utilized private student loan options at your original school or if you require additional funds for your education at the new school, you may apply for fresh private student loans. This is a time-sensitive process so be sure to complete your paperwork and visit the new financial aid office right away. 

Utilize your Financial Aid Office

Luckily, colleges are used to students transferring schools and aware of the paperwork protocols in place. Be sure to speak with both financial aid offices at your old school and the new one to ensure your loans are up to date and you have enough funds to cover your new location. The professionals are there to answer all your questions. They are there as your guides, but you will have to make an appointment likely at each office, so don't put it off to help you enjoy a smooth transition.