Janice Lozano
If you're a student at UCI, you can pay for your student loans in a variety of ways. The university offers federal direct loans, including direct loans, subsidized and unsubsidized loans, and PLUS loans. These loans are available to most students regardless of income, although other qualification criteria do apply. You can also apply for financial aid by completing the FAFSA or California Dream Act application. This can come in the form of grants, scholarships, work-study jobs, or loans. Additionally, UCI offers its own private (institutional) student loans with fixed interest rates and no requirement for a co-signer for borrowers aged 18 or older.
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What You'll Learn
Federal Direct Loans
To be eligible for a Federal Direct Loan, you must file a Free Application for Federal Student Aid (FAFSA). You must be a US citizen or eligible non-citizen, and you must file the FAFSA each year to maintain eligibility. You must not be in default on a previous federal student loan or exceed annual and lifetime borrowing limits.
There are two types of Federal Direct Loans: Direct Subsidized Loans and Direct Unsubsidized Loans. Direct Subsidized Loans are only available to students who can demonstrate financial need. Interest does not accrue until after graduation or leaving school, and there is a time limit on how long you can receive a subsidized loan. The amount you can borrow is based on your academic year level, cost of education, and financial need. You must start paying back your loan after you graduate, leave school, or drop below half-time enrollment. Repayment starts after a six-month grace period, and the Department of Education pays the interest while you are enrolled for at least half of the time.
Direct Unsubsidized Loans are available regardless of financial need. Interest begins to accrue upon receipt of the loan funds, and you may make repayments while enrolled in school. It is advantageous to make at least the interest payments. The amount you can borrow is based on your academic year level and the cost of education. Repayment terms are similar to those of Direct Subsidized Loans.
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California Dream Loans
The California Dream Loan is a subsidized loan provided by The Regents of the University of California and the State of California to Dreamer students who demonstrate financial aid eligibility. The loan is offered to eligible AB540 undergraduate and graduate students to help cover the cost of attending the University of California.
To be eligible for the California Dream Loan, students must be eligible to complete a California Dream Application (CADAA) and qualify for the tuition exemption under AB 540. Students must file the California Dream Act Application each year to continue receiving aid. The application deadline for the best financial aid is March 2nd of each year.
The California Dream Loan is awarded based on financial need and other aid received. Students may be awarded up to $4,000 per year and can borrow up to a maximum of $20,000 during their career at UCI. The interest rate for the loan is the same as the Federal Direct Subsidized Loan, and it changes every school year. For the 2022-23 school year, the interest rate was 4.99%. Interest will not accrue until six months after graduation or if the student drops below half-time enrollment.
Repayment of the California Dream Loan starts six months after graduating, leaving school, or dropping below half-time enrollment. The loan is serviced by Heartland Educational Computer Systems, Inc. (ECSI), and once accepted, students will receive an email from Heartland ECSI with instructions and a PIN to complete the promissory note and other loan documents.
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Private Loans
UCI offers institutional private student loans with fixed interest rates. However, private loans are also available from other sources, such as private lenders, institutions, or credit unions. These loans are not guaranteed by the federal government and may carry higher interest rates than federal loans.
Private student loans have variable interest rates that can increase or decrease over time, depending on market conditions. The interest rate on a private loan may depend on the borrower's and/or co-signer's credit rating. It is important to determine the interest rate and any associated fees before accepting a private loan.
If you are considering a private loan, you should contact the lender or your UC campus' financial aid office with any questions. UCI provides a list of recommended lenders based on factors such as financial terms, loan features, and quality of service.
To apply for a private loan, you will need to submit an application directly to the lender. If your application is approved, the lender will notify UCI, and the loan will be certified and disbursed in three quarterly payments. The loan will first pay any outstanding balances, and the remainder will be disbursed to you.
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Income-Driven Repayment Plans
Federal student loans offer a range of flexible repayment options, including income-driven repayment plans. These plans are designed to make your loan payments more manageable by taking into account your income and financial situation. Under an Income-Driven Repayment (IDR) plan, your loan payments are based on your discretionary income, and you may be eligible for a reduced payment amount.
There are several types of IDR plans available, each with its own specific qualifications and features. Here is an overview of some common IDR plans:
- SAVE Repayment Plan: This plan offers the lowest monthly payments among all IDR plans for qualified borrowers. It is designed for those who cannot afford their current student loan payments.
- Public Service Loan Forgiveness (PSLF): Borrowers can qualify for loan forgiveness if they work full-time for a qualifying public service employer, such as a 501(c)(3) non-profit or government agency, for 10 years and make 120 payments under a qualifying payment plan.
- Teacher Loan Forgiveness: Teachers who work for 5 consecutive academic years in a low-income school or education agency and teach high-need subjects may be eligible for up to $17,500 in loan forgiveness.
- Income-Driven Repayment Discharge: This option provides a reduced payment based on your discretionary income and a new loan term of 20 or 25 years.
It is important to note that the availability and specifics of each IDR plan may vary depending on your loan type and other factors. To explore your specific options and qualification requirements, it is recommended to visit the official website studentaid.gov or contact the Federal Student Aid Information Center at 1-800-433-3243. Additionally, you can refer to the Office of Financial Aid and Scholarships at UCI for further guidance on repayment plans.
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PLUS Loans
Direct Graduate PLUS Loans
The Federal Direct Graduate PLUS loan program is designed to assist graduate and professional students with financial need. It is intended for those who are unable to meet their expected student contribution or have additional financial needs that are not met by other financial aid resources. The amount that can be borrowed is based on the cost of education for the academic year, minus any estimated financial aid received.
Repayment for Direct Graduate PLUS Loans begins 60 days after the loan is fully disbursed for an academic year. Repayment can also start six months after graduating, leaving school, or dropping below half-time enrollment. Origination fees are fixed annually and are subtracted by the Department of Education before the funds are disbursed to the borrower's Zot Account. First-time borrowers must complete a Master Promissory Note (MPN) and online entrance counselling to ensure they understand their obligations.
Direct Parent PLUS Loans
The Federal Direct PLUS loan program assists parents of dependent undergraduate students who are unable to meet their expected parental contribution or have additional financial needs. Parents may borrow up to the cost of their child's education for the academic year, minus any estimated financial aid.
Repayment for Direct Parent PLUS Loans also begins 60 days after the loan is fully disbursed. A credit check is performed during the application process, and parents with an adverse credit history may still receive a loan but are required to complete PLUS Credit Counselling.
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Frequently asked questions
Your federal student loans were assigned to a servicer after they were disbursed to your student account. Your loan servicer manages your loan repayment. Visit studentaid.gov to view your dashboard, which includes your federal student loan borrowing history and loan servicer contact information for repayment information. You can also call the Federal Student Aid Information Center at 1-800-433-3243.
A loan servicer is an organisation that handles the billing and other administrative tasks for your loan.
You should have been notified by your loan servicer when your federal student loan was disbursed. Contact your servicer and verify that your contact information is accurate and up to date so you can ensure you are receiving your billing statements and important repayment updates.
For federal student loan borrowers in repayment, interest began accruing on loan balances on September 1, 2023, and payments will resume in October.
The new SAVE repayment plan offers the lowest monthly payments of any income-driven repayment (IDR) plan for qualified borrowers. Explore the SAVE repayment plan and other IDR plans offered by the Department of Education. Contact your loan servicer with any questions about making payments.
