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Transferring to a four-year college or flagship university may not be worth it for some students with relatively low GPAs, a recent working paper found.
In Texas, academically marginal transfer students — those with GPAs that barely crossed the threshold for admission — have worse earning potential than students who applied to transfer but were rejected, the paper published by Brown University’s Annenberg Institute found.
The paper examined both students who moved from two-year to four-year institutions and students who moved from less-selective four-year institutions to flagship universities.
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In total, the students who transferred from two-year to four-year colleges who were barely accepted earned about $7,000 less per year than those who applied but were rejected, the paper stated. The differences in earnings were statistically significant six to 10 years after students moved to transfer.
Likewise, transfer students from four-year colleges who were marginally admitted to a flagship state university also saw lower earnings than those who were rejected, though they largely weren’t statistically significant, the paper stated. The paper found these students move from higher paying to lower paying majors as they transfer.
“At least for students who are just barely getting in, their outcomes are actually not positive, and potentially even negative in the long run, in terms of their earnings relative to a student who applied to transfer but was rejected,” said Lois Miller,an economics professor at the University of South Carolina.
That doesn’t mean students with high GPAs wouldn’t benefit from transferring, Miller said. The paper only compared students at or near the transfer-eligibility cutoff; it did not compare them to students with higher GPAs, said Miller.
But students with GPAs near the cutoffs — typically around 2.0 — who were rejected when applying to transfer fared better than the academically marginal students who were accepted, she said.
Research has shown that a college education leads to better employment and higher earnings potential. For low-income students, public colleges that primarily grant bachelor’s degrees often provide the highest return on investment compared to other institutions, a 2022 report from Georgetown University researchers found.
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Transfer students, who make up over one-third of all college students, often change institutions because they are poorly matched with their first college, the paper stated. Others pay less for their bachelor’s degree by beginning their studies at a community college before transferring to a four-year institution, the study added.
Low-income, first-generation, and underrepresented racial minority students “are disproportionately likely” to initially enroll at community colleges or less-resourced institutions, according to the paper. Their “most accessible pathway to a well-resourced college” may be through transferring, it stated.
But the paper’s findings break from the expectation that transferring to more selective institutions yields better financial results, said Miller.
“It is very surprising. It’s not what I was expecting to find,” said Miller.
Transfer students may be underprepared
The paper examined enrollment, degree completion and earnings data on public higher education students in Texas between 2000 and 2024. That paper analyzed more than 50,000 students who applied to transfer from a two-year to a four-year college, and about 22,000 students who applied to transfer from a different four-year college to one of the state’s two flagship universities, the University of Texas at Austin and Texas A&M University, the paper stated.
One reason for reduced earnings potential is that students with lower GPAs may not necessarily be academically prepared for the four-year institution or flagship university that they transfer to, said Miller.
Transfer students coming from community colleges who were underprepared by their high school education and their initial college are expected to learn at their new institution at a junior standing, without having taken any classes there, she said.
“If the content was pretty different between your community college and your four-year college, then it’s going to be really hard for you to keep up as a junior in the four-year college,” said Miller.
Additionally, students who were marginally admitted from a four-year college to a flagship university often substitute higher-paying majors, such as business and health, with lower-paying majors, such as general liberal arts and social sciences, the paper stated.
That’s likely due to admissions restrictions — the business school at their destination institution may be more selective than its liberal arts college, the paper said. Course credits being transferred may also only count as general credit rather than toward major requirements, the paper added.
“They’re basically not able to major in business anymore,” said Miller. “If they had stayed at their less selective four-year college and majored in business, they would have eventually gotten a higher-paying job from that.”
Texas is fairly decentralized when it comes to transfer agreements — often leaving students to figure out themselves which colleges they can transfer to and which course credits will move over, said Miller.
The system differs from some other states, such as California, which have strong statewide transfer partnerships that align many classes between two- and four-year colleges, she added. But the challenges transfer students face in Texas are common in many other states throughout the U.S., Miller said.
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What can help provide ROI for transfer students?
New pathways that allow students at community colleges to earn bachelor’s degrees could help improve potential outcomes for transfer students, said Miller. More community colleges nationwide are offering bachelor’s degrees, potentially bypassing the need to transfer.
Colleges could also provide transfer students with more comprehensive support, said Miller.
Four-year colleges, for example, often provide programming for first-year students to help them adjust, she said. Transfer students could benefit from that kind of support, as they face unique challenges entering a new campus environment where it can be hard to integrate socially and build connections with their professors, she said.