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.
Strategic Financing for Your Future
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 Federal Student Loans
To learn more about each type of federal student loans and how you can apply for them, click on the following links. You can also download the Student Loan Checklist to help you keep track of the loan process.
Federal Direct Subsidized Loan
Federal Direct Unsubsidized Loan
Health Professions Student Loan (HPSL)
Federal Direct Parent PLUS Loan
Federal Direct Graduate PLUS Loan
You can also compare these federal student loans!
Additional Types of Loans
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. See also Graduate Student Average Cumulative Loan Debt.
- Before Borrowing, Ask Yourself These Questionsadd1. 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 BorrowingaddBefore borrowing a student loan, it is important that you know about the benefits and responsibilities associated with borrowing a student loan.PROS
- 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.
CONS- 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 Responsibilitiesadd
- Keep track of student aid and how much you’re borrowing. Think about how your accumulated loan debt can affect your future.
- Research your career and 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?addOnce 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, see the Federal Loan 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:WHAT YOU HAVE TO COMPLETE
Summer Enrollment Periods Summer Loan Process Deadline Session A Only Second to last Friday in June Any Session ending Aug. 11 Last Friday in July Special Session ending before Aug. 11 Two weeks before end of Session - Accept your loan through CalCentral.
- Complete a Master Promissory Note (MPN).
- Complete Entrance Loan Counseling.
- 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 Counselingadd1. 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
- The Loan Process: How to Cancel Your LoansaddWithin 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 account
- Choose the “Loans & Work-Study” link from the left menu bar.
- Select “Revise Loan Amounts” and enter your changes.
- The Loan Process: After You Leave School or GraduateaddBefore 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.
- What Happens After I Leave School or Graduate If I Borrowed a Perkins Loan?addThe FEDERAL PERKINS LOAN PROGRAM ENDED SEPTEMBER 30, 2017: The Federal Perkins Loan program officially ended on September 30, 2017, and Perkins loans will not be offered after that date unless legislative action extends the program.
- Before leaving school or graduating, be sure to complete your Perkins Exit Interview.
- Keep your contact information up-to-date with Berkeley so that you receive important information about your repayment.
- Toward the end of your 9-month grace period, you should receive information about beginning repayment. If you have not received anything at the beginning of the 9th month of your grace period, contact Berkeley at accountconsultants@berkeley.edu.
- Nine months after you leave school, you begin repayment. Perkins loans from UC Berkeley are managed by a loan servicer, Heartland-ECSI.
- You can prepay your loan without penalty. This means that the faster you pay your loan, the less interest you pay over time.