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Transfer Students Don’t Save Money On Student Loans

Student Loans

Often students tackle their college education considering the community college route first and then transfering to a university to finish out a four-year degree. This is intended to save on the high costs of the university courses versus the costs of the community college. However, a recent study refutes the savings logic of this tactic.

A study conducted by the Texas Guaranteed Student Loan Corporation (TG), “A Brief Look and Transfer Students and Financial Aid,” compared the cumulative debt of both transfer students with their non-transfer peers. The TG was established in 1979 in order to provide Texas students with information and services regarding assistance in financing their higher education.

It was determined that students who transfer to a four-year college will accumulate an equal amount of student loan debt as those who never transferred. Transfer and native students who graduated from a public four-year university owe an average of $20,000 in debt. A private institution in contrast, costs transfer students more upon graduation than native students, $27,000 compared to $25,000 on average, The Paisano reports.

Transfer students are also less likely to receive grant benefits compared to native students, especially among Hispanic transfer students, who receive $1,400 to $3,000 less in aid than native peers, forcing them to borrow the difference in loans, according to The Texas Tribune.

The data for this particular study was only assessed on students whose income was at or below $89,000 for dependent students and $25,457 for independent students.

Carla Fletcher, TG senior research analyst and the report’s author, said:

“People have this idea that they are somehow going to save money because they go to community college. But it looks like people end up borrowing about the same. Many students have traditionally been guided to follow the transfer route with the assumption it will help them save on certain college costs. Unfortunately, we found this to be untrue, and, in fact, the transfer route may end up creating significant barriers for some students.”

Fletcher added that many students who begin work on their bachelor’s degree in community college see their savings erased at the university level, particularly at private institutions. Nationally, only about one-third of community college students who plan on transferring manage to do so within three years.

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8 Responses to “Transfer Students Don’t Save Money On Student Loans”

  1. Heather Johnson

    I went to community college for 3 semesters and earned my AA. I went to a university for the next 5 semesters and earned my BA. I now also have 2 master's degrees. I have no debt. This study needs to be taken with a grain of salt. It is not determinative. You can get through college without any debt.

  2. Megan Charles

    Mine cost me quite a bit more because I had to work full time while going to college and paying bills for two disabled relatives. Situations are subjective.

  3. James Johnson

    I saved around $20,000 by going to community college based on room and board, tuition and book costs at my four year university. My debt load was less than half of that taken out by my friends who attended all four years at a four-year institution. However, I know a lot of people who decided to change course after two years in a four-year school (following community college) which essentially reset their debt load to four-year status. Definitely a subjective study.

  4. electedface

    Student debt is stunting the growth of the economy. Student loans have increased by 275% over past decade. As the next generation graduates from college, they are plagued by insurmountable debt that places demands on their income, limiting their ability to spend their earnings in ways that stimulate the economy.

    http://www.youtube.com/watch?v=mRA9ndc1pCM