Why community college may not be a bargain

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(MoneyWatch) If you begin your studies at a community college and then transfer to a four-year institution to complete your bachelors degree, your education will be cheaper. Or will it?

A new study questions the conventional wisdom that starting at a two-year school, which often allows students live at home, will shrink overall college costs. The study, which was conducted by the Texas Guaranteed Student Loan Corporation, concluded that transfer students who begin at a community college ended up borrowing the same amount as those who studied exclusively at a four-year public institution. Transfer students who ended up at private, four-year institutions borrowed more ($27,000) than students who started at four-year private schools ($25,000).

"Many students have traditionally been guided to follow the transfer route, with the assumption it will help them save on certain college costs," observed report author Carla Fletcher, s senior research analyst with the group. "Unfortunately, we found this to be untrue, and in fact, the transfer route may end up creating significant barriers for some students."

A major reason why transfer students face higher college costs than they likely expect is because the financial aid and grants they receive when they transfer aren't as generous as those that non-transfer students enjoy. The best financial aid packages are typically given to freshmen because they often enjoy many college options.

The study, which looked at aid packages for the 2007-08 academic year, concluded that the median grant awarded to transfer students at public universities ($2,200) wasn't significantly different from what other students got ($2,500). But median awards were significantly different at private schools for transfer students ($5,300) versus the other students ($9,000).

Another problem not cited in the report that frequently hurts transfer students is their inability to preserve all their class credits. When credits don't transfer, that can add a semester or more in additional schooling.

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