H4 to F1 visa conversion

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I am currently pursuing masters on an H4 visa, living in the US. I want to convert my visa to F1 now, but my DSO says that I need to move out of the US to activate my SEVIS and obtain an initial I20 form. Is that really required? Because I know many of my friends studying in the US converted their visa statuses without moving out of the country. 

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