Loans are a type of financial assistance that enable students and parents to borrow money from the federal government, state government, or private lenders. It is important for students and parents to be well informed of the terms and conditions of loans prior to borrowing.
Federal Direct Subsidized Loans
Direct Subsidized Loans are federally guaranteed loans based on financial need. This loan is offered to undergraduate students only. Interest does not accrue on the loan while the student is enrolled at least half-time. Students are not required to start making payments on this loan until six (6) months after they graduate or drop below half time.
For more information, including current interest rates, please see our Undergraduate Loan Guide.
Federal Direct Unsubsidized Loans
Direct Unsubsidized Loans are federal guaranteed loans that all students, regardless of need, are eligible to receive. Interest begins accruing after the first disbursement. Students are not required to start making payments on this loan until six (6) months after they graduate or drop below half time.
For more information including current interest rates, please see our Undergraduate Loan Guide.
Federal Direct Parent PLUS Loans
The Direct Parent PLUS Loan is a loan option for parents with dependent students to help pay for their educational costs. Parents can borrow up to the cost of attendance minus any other financial aid the student is receiving. Interest begins accruing after the first disbursement. Parents are not required to start making payments on this loan until sixty (60) days after the loan is fully disbursed. Parents may also defer payment if the student is enrolled at least half-time, or during the six (6) month period after the student has graduated or ceases to be enrolled at least half-time.
For more information please see our Undergraduate Loan Guide or our video guide to the differences between PLUS and Private loans.
University loans are awarded to undergraduate students, based on financial need. University loans have fixed interest rates, currently set at 5%. Interest begins to accrue on university loans 6-9 months after graduation (depending on loan type) or 6-9 months after the student drops below half time enrollment.
If awarded a university loan, additional information regarding loans terms is provided as part of the students Financial Aid Notification.
California DREAM ACT Loan Program
The California DREAM Loan Program allows for UC and CSU campuses to administer non-federal loans to undocumented students who meet the DREAM Act Application requirements.
Students who demonstrate financial need can borrow up to $4000 through the Dream Loan Program.
Interest rates will be fixed at the same rates as Federal Direct Loans, with no loan fees. You must submit your DREAM application by the March 2nd deadline to be eligible for a DREAM loan.
Choosing how to finance your education is one of the most important decisions you will make - and the impact of that decision will follow you well beyond graduation. Once you have exhausted your eligibility for Federal, State, and University financial aid and loans, you may need to consider applying for a private educational loan, also called an alternative loan. These loans are not federal student loans. They are offered by private lenders and are used to supplement other types of financial aid. The interest rates and repayment terms on these loans may vary.
Students may refer to the UC Preferred Lender List which includes lenders that have been extensively evaluated by the University of California Office of the President and found to provide competitive rates and loan terms to students.
Corbett Disclosure Statement
Students considering student loans need to be aware of the differences between federal student loans and private student loans:
- Federal student loans are required by law to provide a range of flexible repayment options including, but not limited to, income-based and income-contingent repayment plans, as well as loan forgiveness benefits that private lenders are not required to provide.
- Federal direct loans are available to most students regardless of income. Other qualification criteria do apply. For more information, please visit (http://www.studentaid.ed.gov/eligibility).
- Private student loan lenders can offer 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.
- Private student loans have a range of interest rates and fees and students should determine the interest rate of, and any fees associated with, the private student loan included in their financial aid award package before accepting the loan. Students should contact the lender of the private student loan or their UC campus' financial aid office if they have any questions about a private student loan.
Some UC campuses offer students their own private (institutional) student loans. Students offered a UC institutional private student loan should know that:
- Interest rates on UC loans will be fixed, not variable.
- UC loans can have a range of interest rates.
- UC loans are not awarded based on the credit history of the borrower.