TG Report Explores the Financial Ramifications of Transferring

Anna TalGiven the hard economic times, some students opt to keep college debt down by beginning their postsecondary education at a community college. But a recently released four-page report by the Texas Guaranteed Student Loan Corporation (TG) calls into question the notion that beginning at a community college and transferring to a four-year university will significantly lower debt for transfer students.

TG is a nonprofit organization that offers resources to help students and families plan for college, learn about money management and repay their federal student loans. The group’s conclusions are based on data showing that transfer students are not afforded as much financial aid upon entering a four-year institution as are the “native” students (those students spending their entire four years at the university).

The data used in this report were for academic year 2007-2008 and contend that transfer students in their final year of school borrowed more money than their native peers. The report looks at median institutional aid, median overall grant aid and median loan aid awarded for public versus private four-year institutions, by sector. The data were filtered to include only students whose dependent or independent income was at or below the median of all students in the 2008-09 Baccalaureate and Beyond Longitudinal Study database, which was $88,836 for dependent students and $25,457 for independent students.

The report notes that the greatest difference in monies awarded was the institutional aid awarded to native versus transfer students at private four-year universities, where native students received $3,700 more than transfer students; the transfer students borrowed $800 more than their native peers. At public four-year universities, the difference in institutional aid was a mere $300 more for native versus transfer students, but transfer students borrowed $1,050 more than native students.

The native advantage?

Anna Tal, a native student who graduated from the University of North Carolina at Chapel Hill (UNC-CH), says that native students receive more institutional aid because “it’s all about the numbers. The native students make the school look good.”

As far as the median overall grant aid, there was a $200 increase awarded to native versus transfer students. The report states that less grant money awarded likely contributed to higher borrowing levels for transfer students when compared to native students, although other considerations were also likely factors. The report did not state what these other likely contributing factors were.