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Strategic Financing for Your Future

Federal student loans can be a critical part of your education financing plan. They are a great resource when used conservatively and wisely. We encourage you to carefully consider whether or not you really need to borrow, and if you do, to borrow as little as necessary. 

You can borrow less than the loan amounts offered in My Finances in CalCentral.

Federal student loans are available to most students regardless of income and provide a range of very flexible repayment plans including income-based repayment plans and loan forgiveness benefits. For more information, check out this video on Responsible Borrowing.

Types of Loans

To learn more about each type of federal student loans and how you can apply for them, click on the following links and download the following checklists:

Federal Direct Subsidized Loan (See the checklist.)

Federal Direct Unsubsidized Loan (See the checklist.)

Health Professions Student Loan (HPSL)

Federal Direct Parent PLUS Loan (See the checklist.)

Federal Direct Graduate PLUS Loan (See the checklist.)

You can also compare these student loans! 

Additional Types of Loans Available

Berkeley Loan


Private Alternative Loan

Short-Term Emergency Loan

Summer Sessions Loan

Did You Know? Sixty-five percent of Berkeley undergraduate students who graduated between July 1, 2016 and June 30, 2017 graduated without loan debt (Federal Direct Subsidized/Unsubsidized Loans, Federal Perkins Loans, private loans). The average cumulative loan debt for graduating seniors who borrowed was $18,197.  Graduate Student Average Cumulative Loan Debt

Before Borrowing, Ask Yourself These Questions

  1. Do you really need student loans to meet your educational costs?
    Take a close look at your budget. Are you living like a student now so that you don't have to after you graduate? For example, can you reduce your living expenses by sharing a room or choosing a less expensive dorm? 

  2. Have you considered working part-time? Have you researched any outside scholarships? 
    Work-study is a great way not only to reduce your future debt, but also to gain professional experience! If you don't see a work-study offer in your financial aid package, you may be able to trade in some of your unused student loan eligibility for work-study eligibility. Berkeley's work-study jobs are exciting!

  3. Do you fully understand your responsibilities as a student-loan borrower? 
    Your biggest responsibility is to repay your loans with interest. The flexible repayment options can help you through tough times by lowering or zeroing your monthly payment. If you are not able to make your loan payments, simply contact your servicer and let them know.

The Pros and Cons of Borrowing

Before borrowing a student loan, it is important that you know about the benefits and responsibilities associated with borrowing a student loan.


The interest rate on student loans is almost always lower than that on private loans—and much lower than that on a credit card!

You don’t have to begin repaying your federal student loans until after you leave college or drop below half-time enrollment.

If you demonstrate financial need, you can qualify to have the government pay your interest while you are in school.

Federal student loans offer flexible repayment plans and options to postpone your loan payments if you’re having trouble making payments.

Similar to all types of loans, a federal student loan is a debt and must be paid back.

Student loans accumulate interest that you need to pay in addition to the original principal loan amount borrowed. You start paying your loan back after graduating or if you drop below half-time enrollment.

Failing to pay your student loans on time can cause damage to your credit history, which will make it harder for you to apply for an apartment, car loans, or even jobs.

Loan-Borrower Responsibilities

Keep track of how much you’re borrowing. Think about how your accumulated loan debt can affect your future.

Research starting salaries in your field. As you consider borrowing, be sure that you consider your total debt upon graduation and what your monthly payments are estimated to be. Ask yourself if your expected starting salary will be enough to support your payment. If you have any concerns, be sure to research different payment options, including loan forgiveness programs, and to talk with a financial aid counselor.

Understand the terms of your loan and keep copies of your loan document. Make sure that you keep a copy of every Master Promissory Note and correspondence you receive from your loan servicer or the university.

Talk to your financial aid counselor at least once a year. Make sure that you are in contact with your counselor about your loans and financial aid package.

Keep in touch with your loan servicer. Update your loan servicer through the National Student Loan Data System (NSLDS) with any changes to your school attendance or contact information.

​Before leaving school (withdrawing, transferring, cancelling, or graduating), be sure to complete your Exit Counseling

The Loan Process: How to Apply; When and Where Does it Pay?

Once you’ve decided to borrow a federal student loan, you'll need to complete some online processes before the loan can pay (disburse). For more information on how to apply for these federal student loans, click on each loan type and print out a checklist:

Federal Loan Checklist for Students

Federal Health Professional Student Loan (HPSL) Checklist for Students

To receive a Federal Direct Loan at UC Berkeley, you need to complete required processes by the following deadlines at the latest:
Attending Fall-only: November 30
Attending Fall/Spring or Spring-Only: April 30
Attending Summer Sessions:

Enrollment Periods:                       Deadline to Complete Loan Process:
Session A Only                                 Friday, June 22, 2018
Any Session ending Aug. 11                Friday, July  27, 2018
Special Session ending before Aug. 11  Two weeks before end of Session


Accept your loan through CalCentral.

Complete a Master Promissory Note (MPN) at studentloans.gov.

Complete Entrance Loan Counseling at studentloans.gov.


After 2 to 3 business days, your Master Promissory Note and Entrance Loan Counseling will be received by the Financial Aid and Scholarships Office.

After verifying that you do not have any holds, that your financial aid application is complete, and that you meet all other basic eligibility requirements, your loan will disburse to your account.


Your loan disburses to your student account and pays for any outstanding charges that you have for the term that the loan is disbursed.

If there is no outstanding balance on your student account when the loan is paid, or if your loan disbursement is larger than your balance, you will receive a refund.

If you are going to receive a refund, you will get a notification from Billing and Payment Services.

The Loan Process: Master Promissory Note and Entrance Loan Counseling 

1. What is the Master Promissory Note (MPN)?

The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s), mainly:

You must repay your loan even if you didn’t complete your education

You must repay your loan even if you can’t get a job after you leave school

You must repay your loan even if you didn’t like the education you received

2. What is Entrance Loan Counseling?

The Entrance Loan Counseling sessions include information on loan repayment obligations and the consequences of loan default.

3. Who needs to complete the MPN and Entrance Loan Counseling?

The U.S. Department of Education (ED) requires first-time borrowers at Berkeley to complete both processes. If you completed an MPN while attending another school, or if a previously completed MPN has expired, you must complete a new one.

4. Where can you complete the MPN and Entrance Loan Counseling?

For the Federal Direct Subsidized and Unsubsidized Loans, you can complete the MPN and Entrance Loan counseling online at studentloans.gov. Use your Federal FSA ID to login.

For the Federal Perkins Loan, the MPN and Entrance Loan counseling are completed through Heartland ECSI, the Perkins loan servicer for UC Berkeley.

The Loan Process: How to Cancel Your Loans

Within 120 Days of Disbursement

You have the right to cancel all or part of any disbursement of a Federal Direct Loan without being charged interest or other loan fees as long as the cancellation is processed within 120 days of your loan’s original disbursement date in CalCentral.

To request a cancellation, use CalCentral (see the My Finances section):

Log on to your CalCentral

Choose the “Loans & Work-Study” link from the left menu bar.

Select “Revise Loan Amounts” and enter your changes.

If the deadline has passed, you will not be able to make a change.

When you cancel your loan by reducing the amount, a charge will be applied to your account within 2 to 3 business days, which may create a balance due. You are responsible for paying this balance.

Don’t send a payment to your servicer if you cancel your loan. Be prepared to send your payment to your bill.

More Than 120 Days After Disbursement

If it has been more than 120 days since your loan disbursement date, you cannot cancel your loan. However, you can make a payment to your servicer. Locate the servicer’s contact information by logging into your National Student Loan Data System account at and clicking on the Financial Aid Review button.

In order to ensure that your payment is applied to a particular loan, you must include a letter with your payment that has specific instructions about how to apply your payment.

For example: "Please apply this $200 payment to my unsubsidized loan first disbursed on 01/10/09, paying off any accrued interest and then applying any remaining payment to the principal of that loan."

The Loan Process: After You Leave School or Graduate

Before leaving school (transferring, withdrawing, cancelling, taking a semester off, or graduating), be sure to complete your Exit Counseling.

Keep in touch with your loan servicer. Update your loan servicer through the National Student Loan Data System (NSLDS) with any changes to your school attendance or contact information.

Once you leave school for any reason, your 6-month grace period begins. If you do not re-enroll before 6 months, you will enter repayment.

Toward the end of your 6-month grace period, you should receive information about beginning repayment. If you do not, contact the servicer(s) of your loans immediately and confirm that they have your correct contact number and last date of attendance. 

You begin repaying your loans after the 6-month grace period has passed.

If you ever have any trouble making payments, contact your loan servicer(s) for help. You may be eligible for a different payment plan, forbearance, or deferment, all of which keep your loans in good standing even if you are temporarily unable to make payments.