How to transfer schools when you have student loans

There are many reasons to consider switching schools. You may want to major in something that's not offered by your current school. You may not be getting the quality education you signed up for. Or maybe you just want to be closer to family and friends.

Whatever the reason, if you plan to transfer in the near future, some planning can help you determine the financial implications of such a move. Here are some tips to consider as you figure out your next steps.

1. You need to resubmit your FAFSA

Student loans don't transfer between schools, so no matter when you switch colleges, you'll need to resubmit your FAFSA form. If you are transferring mid-year, you do not need to complete a new form from scratch. Rather, you can access the FAFSA already on file and resubmit it with your updated school choice. Since the financial information hasn't changed, your eligibility for financial aid — and your student aid index — won't change. However, that doesn't mean your total costs will stay the same.

2. Your financial award could change

Depending on the details of your transfer, the financial award you receive from your educational institution may go up or down. This could be because your new school doesn't hand out as much aid, or because some student aid (like Perkins Loans) may have already been used.

The cost of attending your new school will also play a part in how much you pay after you transfer. If you transfer to a more expensive school, you could bear the brunt of higher costs. If you transfer to a less expensive school, on the other hand, you could save money or watch your aid package shrink. Make sure to speak with a school counselor to gauge how these changes might affect your finances.

3. Take care of your existing loans

You will still be responsible for the student loans you borrowed for your old school, so it's important to address them when you transfer. For example, the funds for most private and federal student loans are usually sent to the school in chunks, one at the beginning of each semester. If you're transferring in the middle of an academic year, make sure to notify your student loan lenders to cancel any funds that are still pending.

If you will be a full-time or at least half-time student at your new school, lenders usually allow you to defer your student loans while you continue your studies. When you are no longer enrolled at your old school they will report that information to student loan lenders, so make sure your lenders know you will be enrolled in another school so it does not impact the repayment status of your loans. The new school will report your new enrollment status as well, but it's good to stay on top of your loan status to avoid accidentally going into repayment.

4. Consider the costs of your new school

If you need to take out additional loans for your new school, it's important to understand the differences in cost. Every school has their own way of calculating your financial aid package, so you may find that you receive more or less aid than you have in the past. For this you can follow the same process you did when paying for college the first time around: review the financial aid package offered by your school, determine how much you and your family are responsible to pay, and determine your best approach for paying the bill.

That could mean tapping into savings or taking out additional student loans, but could also mean you don't need to borrow as much - depending on the new costs. Going through the steps of calculating exactly how much you'll need to cover will help you avoid over- or under-borrowing, which could end up costing more in the long run.

Ready to take the next step?

Citizens is here to help you navigate your student lending options for today and the future. Make sure to visit our Student Lending page — we're on chat.