The cost of college can be crippling. A year at a public university costs an average of $9,650 for in-state students. A year at a private school amounts to a staggering $33,480. With such high numbers, it’s no wonder many students have trouble paying for college and leave school with a huge debt.
One of the most effective strategies to reduce your college expenses is known as the 2+2 plan. Under this approach, you attend a community college for two years and then transfer to a four-year school. Tuition at a community college is significantly lower than tuition at a four-year school, so the 2+2 plan can significantly reduce your total costs.
When you’re considering options for paying for college, the 2+2 plan is cost-effective, but it can affect the availability of financial aid.
How community college affects your financial aid options
When you decide to transfer from a community college to a four-year school, you need to resubmit the Free Application for Federal Student Aid with the new institution’s information.
Your income and family information might not change when you transfer, but your Expected Family Contribution could be different. That’s because each college has its own eligibility requirements for grants, scholarships, and loans.
However, you shouldn’t panic about the cost of financing your education after you transfer. You’ll remain eligible for financial aid, although there might be some variations because of your status. Your financial aid options include grants, federal loans, and private student loans.
Grants are one of the best forms of financial aid you can receive. Unlike student loans, which must be repaid with interest, you usually don’t have to repay grants. You can use grants to reduce your college costs and minimize debt.
If you follow the 2+2 plan, you can qualify for federal grants as long as you haven’t earned a bachelor’s or a professional degree. Two key grants are available from the federal government:
Pell Grants: Students with financial need can get up to $5,920 per year in addition to other financial aid.
Federal Supplemental Education Opportunity Grants: These grants are awarded to students with financial need. You can receive up to $4,000 per year.
Federal student loans
As a transfer student, you’re eligible for all types of federal student loans. However, transferring can affect the amount of aid you receive in the following ways.
Transferring can impact the availability of Direct Subsidized Loans, under which the government covers the cost of interest that accrues.
You can receive subsidized loans for only 150% of the published length of your program. For example, if you enroll in a four-year school, you can qualify for subsidized loans for only six years.
If you receive subsidized loans to help pay for community college and then transfer to another program, the length of study will count against your eligibility period. For instance, if you receive two years’ worth of subsidized loans for community college and then transfer to a four-year school, you’ll be eligible for only four years’ worth of additional subsidized loans.
Although you can take out federal loans while you’re in community college and at a four-year school, there’s a limit on the amount you can borrow over the length of your education.
As of 2018, you can borrow up to $57,500 in subsidized and unsubsidized loans to fund an undergraduate degree. If you took out federal loans while in community college, the amount you can borrow in federal loans after you transfer will be reduced accordingly. If the new school’s costs are higher than the amount you can borrow, you’ll have to find additional sources of funding.
Private student loans
When you transfer from a community college to a four-year school, federal loans might not be enough to cover the total cost of attendance. If you exhaust the eligibility period or hit the maximum loan limit, you might need other financing help.
One option to help fill the gap and complete your education is private student loans. Unlike federal loans offered by the government, private loans are issued by banks and financial institutions. Private lenders usually offer higher borrowing limits, so you could take on as much debt as you need to pay for school.
However, keep in mind that private student loans tend to have higher interest rates and fewer benefits than federal loans. Make sure you use all your federal aid options before you apply for private student loans.
Paying for college
When it comes to paying for college, following the 2+2 plan is one of the most cost-effective strategies for reducing your education expenses. Going to community college and then transferring to a four-year school can help you save thousands of dollars. It also can impact your financial aid availability, so be prepared and know all your options before you transfer.
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