Many students and parents choose to borrow money for college. Taking out loans can help you to work less and graduate sooner, but it's important to do your research on the types of loans that are right for you. Education loans are available to families at all income levels.
Student loans
Unlike grants and scholarships, a loan is a type of financial aid that must be re-paid, usually with interest.
Federal student loans
Federal student loans are available to most students who are U.S. citizens, permanent residents and eligible non-citizens regardless of income. Federal student loans, unlike private loans, are required by law to provide a range of flexible repayment options and loan forgiveness benefits which private lenders are not required to provide.
For most students and families who decide to borrow, federal student loans are the best option.
Repayment on federal student loans doesn't start until after you leave school, and with fixed interest rates and payment plans, monthly payments can be manageable.
Learn more about federal student loans »
Private student loans
Unlike federal loans, private loans are administered by private lenders — either banks or private institutional lenders — who set the terms for the loans. This can mean they have different criteria for both loan eligibility and loan rates (they can have a range of interest rates and fees). Before you decide to apply for a private student loan, we encourage you to do your research and contact UC campus financial aid officers who can guide you through your options.
You can also get a better sense of how to manage your loans after graduation by using a student loan calculator. It determines how you can repay your loans based on the expected income associated with your intended major.
See the Brookings Institution's student loan calculator or the Department of Education's calculator»
Parent loans: PLUS loans
Federal PLUS loans are available to most families who do not have an adverse credit history, but you need to file a FAFSA to obtain one, even if you don't expect to receive "need-based" financial aid. The maximum that a family can borrow is the total cost of attendance minus all other financial aid. Family repayment can be reduced or deferred until a student and any siblings leave college.
FAQs
Need based grants examples include the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG) and state-based grants. In other words, always say “yes” to grants if your child receives them on the financial aid award! However, check into the requirements for the grant.
Does applying for financial aid reduce your chances of admissions? ›
If the college operates on a Need-Aware system, then it is technically possible that it could affect your chances of admission. But generally, the answer is no. Many top schools have Need-Blind admissions policies, which means that they do not consider an applicant's financial need when making admissions decisions.
How do I know if I got the blue and gold opportunity plan? ›
How do I know if I qualify? If you qualify for the Blue and Gold Opportunity Plan, your financial aid awards will include scholarships or grants to cover your UC systemwide tuition and fees. Please note that you cannot receive more awards under the Blue and Gold Opportunity Plan than your calculated financial need.
What happens if you don't get enough student loans? ›
There may still be ways to pay for college if financial aid isn't enough. Scholarships, grants, part-time jobs and private student loans can all help cover the gap—or you might choose to attend a more affordable college. The right path for you will depend on your college goals and financial situation.
Should you say yes on financial aid common app? ›
Every college should have its own Net Price Calculator, found on its website (federal policy ensures they have one). Try inputting your family's financial numbers to see if you qualify for aid. If you do, confidently mark "Yes" on the Common App question.
What happens if I say yes to work-study on FAFSA? ›
You'll get your work-study funds through a regular paycheck.
You'll get paid at least once a month, although some schools may pay you weekly or biweekly. Most schools offer direct deposit, but some may still use paper paychecks. Check with your school's financial aid office about how you would be paid.
What is the income limit for UC financial aid? ›
Your family earns less than $80,000 annually. Be in your first four years as a UC undergraduate (first two for transfer students) Your Expected Family Contribution (EFC)/Student Aid Index (SAI) is less than your Estimated Cost of Attendance. Enrolled in at least six (6) units (half-time)
Is it possible to get a full ride to a UC? ›
Under the Blue and Gold Opportunity Plan, California students whose family income is below $80,000 will receive enough scholarships and grants to fully cover their UC fees for the first 4 years of college. But keep in mind that the expensive part of an UC education is not the fees but the housing and everything else.
Does the Blue and gold Opportunity Plan cover housing? ›
Students with greater financial need can qualify for even more grant support to help pay other educational expenses (like books, housing, transportation, etc.).
Why did FAFSA give me so little? ›
This can happen. The FAFSA relies on two-year-old tax information. Or your family may be facing big expenses that the FAFSA didn't ask about. If your financial aid offer seems way off, contact the college's financial aid office.
7 Options if You Didn't Receive Enough Financial Aid
- Apply for scholarships.
- Request an aid adjustment.
- Explore additional needs-based programs.
- Find part-time work.
- Ask about tuition payment plans.
- Request additional federal student loans.
- Research private or alternative loans.
College students are regretting taking out student loans before they even leave school, a new report from WalletHub revealed on Tuesday. Roughly 61 percent of college students said they regretted how much they borrowed with student loans, according to the report.
What is the meaning of need-based financial aid? ›
The term “need-based” is a designation that is based on a student's financial need. For example, a need-based grant might be awarded based on a student's low income.
How do you answer financial need questions? ›
Body: Your financial situation and hardships
Make sure you describe your parents' occupation, any savings (like a 529 College Savings Account), and any student jobs. You might also discuss any sudden changes in fortune (e.g. parent fell ill or lost their job) that have ruined your original financial plans.
What do you say when asking for financial aid? ›
Your letter should clearly state the facts of your family's financial situation and your financial need. It should explain why you need additional aid, even if the reason is something you find difficult or even embarrassing to talk about. Be candid and honest about your family finances.
Do you need to pay back need-based aid? ›
Students have to pay back financial aid if it is in the form of a loan, but they do not have to pay back grants, scholarships or money awarded through a work-study program. Students eligible for grants or scholarships should exhaust those options before taking out any loans, experts say.
