Lana Oconnell
UCLA offers a range of services to help students and graduates navigate the complexities of student loan repayment. UCLA's Financial Education, Loan and Support Services (FELSS) department provides online resources and counselling to help borrowers understand their loan options and manage their finances effectively. With federal student loan payments resuming this fall, borrowers can benefit from new programs and repayment plans offered by the Department of Education to make loan management more accessible. UCLA's Debt Management Services offers additional support, including guidance on deferment, forbearance, and loan consolidation options, ensuring Bruins have the tools necessary to confidently tackle their student loan debt.
| Characteristics | Values |
|---|---|
| Grace period | A grace period is a stated amount of time when you are not expected to make payments. It begins when your enrollment falls below half-time status, you leave school, or graduate. The grace period for a Direct/Stafford Loan is six months, while a Perkins Loan has a nine-month grace period. |
| Interest | Interest is a fee charged for the loan money, calculated as a percentage of the principal of the loan and paid over a specified time. With subsidized (need-based) loans, the federal government pays the interest during specific periods. With unsubsidized (non-need-based) loans, borrowers are responsible for interest payments during school, grace periods, and authorized deferment periods. |
| Repayment plans | There are various repayment plans available, including Income-Driven or Income-Based Repayment (IDR/IBR), Pay As You Earn (PAYE), and Standard Repayment. IDR/IBR caps monthly federal loan payments based on income and family size, while PAYE caps monthly payments at 10% of discretionary income and offers loan forgiveness after 20 years. Standard Repayment involves fixed quarterly payments for up to 10 years, with a minimum of $120 per quarter. |
| Loan consolidation | Consolidation combines multiple educational loans into one new loan. It can lower the total loan finance charge if extra payments are made. |
| Default assistance | The US Department of Education (DOE) provides assistance for federal student loan borrowers who default on their loans. The Fresh Start initiative helps borrowers in default, and the Loan Simulator tool helps determine loan payments under different repayment options. |
| Debt management services | UCLA offers debt management services to provide counseling and support for students and graduates repaying federal student loans or managing outstanding debts with the university. |
| Economic crisis response | UCLA's Economic Crisis Response (ECR) team provides guidance to students experiencing financial difficulties that impact their academic success. |
| COVID-19 payment pause | The DOE allowed borrowers to request a refund for payments made during the COVID-19 payment pause, which began on March 13, 2020. |
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What You'll Learn
Understanding grace periods
A grace period is a set amount of time during which you are not expected to make payments on your student loans. This period begins when you leave school, graduate, or your enrolment falls below half-time status. Grace periods are typically offered with Federal Stafford Loans, Federal Direct Loans, and Federal Perkins Loans.
The grace period for a Direct/Stafford Loan is six months, during which interest accrues. After this period, you will be expected to make monthly payments. If you go back to school or maintain at least half-time status in a qualifying course, you may be eligible for another grace period. However, if you allow the initial grace period to elapse, you will not be eligible for a new one in the future.
The Perkins Loan has a nine-month grace period. After this period, you will not be expected to make a payment until the end of the first quarter of the billing cycle. For example, if your grace period ends in December, your first payment will be due in March.
It is important to note that during the grace period, interest may still accrue on your loan, depending on the type of loan. With subsidized (need-based) loans, the federal government pays the interest during the grace period. However, with unsubsidized (non-need-based) loans, you are responsible for paying the interest during this time.
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Loan consolidation
UCLA offers a range of services to help students and graduates navigate their finances and manage their student loan debt. UCLA's Financial Education, Loan and Support Services (FELSS) provides financial education, meal support services, loan counselling, economic crisis support, short-term loans, and personal care support.
The Debt Management Services (formerly Collections) provides counselling for Bruins repaying their federal student loans and those with outstanding debts with the University. They work with students and graduates to find affordable repayment options and help them keep their loans current.
The advantages of a Federal Consolidation Loan include simplified repayment by replacing multiple monthly payments with a single payment. Additionally, borrowers can access benefits such as income-driven repayment plans and the Public Service Loan Forgiveness Program.
However, there are also potential drawbacks to loan consolidation. For example, Perkins Loan borrowers may lose valuable interest subsidy and cancellation rights by consolidating. Consolidation is usually limited to larger loan amounts and may extend the loan repayment period, which could increase the total finance charge.
Before consolidating, borrowers should carefully consider the advantages and disadvantages and be aware of all the loan terms and conditions. The application process for a consolidation loan typically involves gathering personal and loan information, completing an application, choosing a repayment plan, and signing a promissory note.
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Interest-free short-term loans
UCLA offers interest-free short-term loans to qualifying, registered students through the Loan Services unit of FELSS. These loans are intended to help students facing unforeseen expenses and are available in three types:
Emergency Loan
An emergency loan provides a loan of up to $200 to students who are enrolled in the current quarter, have paid student services fees, and have no outstanding short-term loans.
Living Expense Loan
A living expense loan offers up to $350 for students who meet the above criteria and are employed. Written employment verification on company letterhead is required for this type of loan.
Financial Aid Advance
This loan assists students facing a delay in the disbursement of their current quarter/semester financial aid.
To apply for a short-term loan, students must do so in person and present one of the following forms of picture ID: Bruin Card, driver's license, state ID card, military ID, or passport. It is important to note that short-term loans are always due on the 20th day of the following month from the date borrowed.
Before obtaining a short-term loan, borrowers must sign a promissory note agreeing to the terms, which include keeping Loan Services informed of their current address and promptly responding to correspondence. Failure to repay the loan by the due date or obtain an extension will result in a $10 late fee and potential default on the loan.
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Income-driven repayment plans
UCLA offers a range of services to help students and graduates navigate the complexities of student loan repayment. UCLA's Financial Education, Loan and Support Services (FELSS) empower Bruins to confidently manage their finances. UCLA's Debt Management Services, a part of FELSS, provides counselling for Bruins repaying their federal student loans or those with outstanding debts to the University.
The US Department of Education (DoE) offers income-driven repayment plans for federal student loans. These plans, which include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR), are designed to make student loan debt more manageable by basing monthly payments on income. The DoE also provides a Loan Simulator to help borrowers determine how much their loan payments would be under each repayment option.
Additionally, UCLA offers interest-free short-term loans to qualifying registered students and provides support through its Economic Crisis Response (ECR) team for those experiencing financial difficulties that impact their academic success. UCLA's Debt Management Services assists students in navigating repayment options, including deferments, forbearance, cancellations, and loan consolidation.
It is important to note that UCLA's Debt Management Services can provide comprehensive guidance on repayment plans, and students can refer to the UCLA Financial Wellness website to improve their financial literacy. Understanding the basics of student loan repayment, such as grace periods, interest rates, and repayment incentives, is crucial for making informed decisions about loan management.
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Loan forgiveness
UCLA offers a range of services to help students manage their finances and navigate the complexities of student loan repayment. UCLA's Financial Education, Loan and Support Services (FELSS) is dedicated to empowering Bruins to confidently manage their finances and make informed decisions about their student loans.
One key aspect of loan repayment is understanding the difference between federal and private student loans. Federal student loans are legally required to offer flexible repayment options, including income-driven plans and the Public Service Loan Forgiveness Program. Federal loans also provide loan forgiveness benefits that private lenders are not mandated to offer. It's important to note that federal direct loans are generally available to most students, regardless of their income. UCLA offers online entrance loan counseling to help students make informed decisions before accepting any loan offers. This counseling covers the terms and conditions of different loans, as well as the rights and responsibilities of borrowers and lenders.
For students facing economic challenges, UCLA's Economic Crisis Response (ECR) team provides support and guidance. The ECR team assists students who are experiencing financial difficulties that may impact their academic success. They work with students to assess their available resources and find the best repayment options to fit their budget. UCLA also has a Debt Management Services team, formerly known as the Collections Office, which provides counseling for Bruins repaying their federal student loans or managing outstanding debts with the university.
Additionally, UCLA offers interest-free short-term loans to qualifying registered students. These loans can provide temporary financial relief and help students manage their immediate expenses. UCLA also provides resources for students with specific loan types, such as Perkins Loans, Regents Loans, Dream Loans, and Health Professional Loans.
Understanding the basics of loan repayment is crucial. UCLA provides information on grace periods, during which no payments are expected, as well as deferment, forbearance, and cancellation options. Students can also learn about repayment incentives, such as interest rate reductions for automatic debit payments.
By utilizing the resources and services offered by UCLA, students can make informed decisions about their student loans, take advantage of loan forgiveness programs, and effectively manage their financial obligations.
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Frequently asked questions
A grace period is a stated amount of time when you are not expected to make payments. It begins when your enrollment falls below half-time status, you leave school or graduate.
With subsidized (need-based) loans, the federal government pays the interest that accrues when you are enrolled at half-time level or higher in qualified courses, during your grace period, or during authorized deferment periods. With unsubsidized (non need-based) loans, you are responsible for the payment of interest during these periods.
UCLA Debt Management Services provides counselling for Bruins repaying their federal student loans. Income-Driven or Income-Based Repayment (IDR/IBR) caps monthly federal loan payments at a level based on your income and family size. Pay As You Earn (PAYE) caps monthly loan payments at 10% of discretionary income and offers loan forgiveness after 20 years of payments.
Yes, your federal student loans may be prepaid or paid-in-full at any time without penalty. You may elect to shorten the duration of your loan payments by making extra payments or paying more than the minimum amount billed.
The US Department of Education provides help for federal student loan borrowers who find themselves in default on their federal student loans. The Department also has a time-limited initiative called Fresh Start to help borrowers who are in default.
