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Since grad transfers only get 1 year (usually), do they still get to finish their masters degree for free?
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This is partly a guess, but, I think it depends on timing. I believe all NCAA athletes receive five years to play four seasons of competition. So, if they graduate and have two years of eligibility to play, that will be two years of tuition towards their masters.
However, I remember reading an article recently that found a significant portion of the 'graduate transfers' are abusing the system (primarily in football/basketball) by earning only a few graduate credits and then leaving school once their eligibility expires.
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The thing about the grad transfer rule was that they were supposed to taking graduate studies that weren't offered at their original college/university. That's how they were ruled immediately eligible. Of course, most of the grad transfers aren't taking their graduate studies very seriously and are picking any graduate courses which qualify.