Residents of the Golden State have a lot to brag about: beautiful beaches, epic mountains, a booming television and film industry, and the epicenter of technology.
However, there’s one thing California dwellers might not be so thrilled about: student loan debt. And as if student loans weren’t bad enough, the high cost of living in much of California makes achieving financial success even more of a challenge.
But here’s the good news: There are programs to help with California student loans. Read on to find some programs that might help you.
The state of California student loans
If you’re curious about where you stand compared to the average amount of California student loan debt, here are some numbers to get you oriented.
- The average amount of California student loan debt per graduate is more than $12,000.
- More than 32 percent of adults in California have at least a bachelor’s degree.
- The median household income for ages 25 to 44 in California ranks 15th highest in the U.S.
It’s also interesting to note that California boasts more than 1.7 million graduates from its University of California schools. And the majority of those schools’ students receive financial aid to attend.
So, where does this degree get you?
According to Census Bureau data, it can make a large difference in your income — despite the costs you might incur to graduate. In fact, California residents with at least a bachelor’s degree have, on average, more than double the income of those who did not attend college.
Federal student loans for California schools
If you hope to attend school in California, you can get federal student loans to help you pay for college. Start by filling out the Free Application for Federal Student Aid (FAFSA). Have a copy of the information sent to each of the schools you are interested in attending.
Each college will present a student aid package based on your FAFSA, including how much you can borrow in federal student loans. You don’t need to worry about a credit check or income to get these types of loans. Plus, if you qualify based on need, you might be able to get subsidized loans — and have the government pay your interest while you’re in school.
You can get federal loans each year you attend school. However, you need to complete a FAFSA each year.
Private student loans for attending college in California
In some cases, you might not be able to pay for college in California using just federal loans. After receiving your financial aid package, calculate the difference between what it will cost to attend college (including tuition, fees, room, and books) and what you have. You might need to apply for private student loans in order to make up the difference.
Depending on the lender, you might need to prove your credit history or show your income. If you can’t qualify for a private student loan on your own, consider getting a cosigner to help you.
Private student loans can be a way to bridge the funding gap if federal loans just aren’t enough.
Resources to help if you have student loans in California
But what if you’re already done with school? If you have California student loans and work in California, there are a few student loan repayment assistance programs that can help, depending on your needs and qualifications.
1. Free Tuition
This first option doesn’t pertain to graduates. Instead, it’s for people who are attending college in California or preparing to enroll. If that’s you, you might qualify for free tuition through one of two programs: Free City or Cal Grant.
Free City is for San Francisco residents attending City College, a two-year community college. The program is available regardless of need. Anyone can apply through the City College of San Francisco website.
Free City is just for San Franciscans, but Cal Grant is much broader. According to the California Student Aid Commission (CSAC), Cal Grants can be used at the following schools:
- University of California
- California State University
- California Community College
- Certain independent, career, or technical colleges in the state
There are more specialized grant programs too, including:
- California Chafee Grant for Foster Youth
- California National Guard Education Assistance Award Program
- College Tuition Fee Waiver for Veteran Dependents
- Law Enforcement Personnel Dependents Grant Program
You also can find more programs on the CSAC website.
2. CDA Foundation Student Loan Repayment Grant
The California Dental Association (CDA) Foundation offers a student loan repayment grant for new dentists working in underserved communities. You can receive up to $105,000, paid out over three years, for repayment of your California student loans.
If you don’t receive that grant, you still could earn an award of up to $5,000 toward education expenses as a runner-up. You can apply on the CDA website.
3. California Bachelor of Science Nursing Loan Repayment Program
You might qualify for this program if you’re a California nurse with California student loans. Here are the details, according to the Office of Statewide Health Planning and Development (OSHPD):
- You must have a Bachelor of Science nursing degree.
- You must be a California-licensed registered nurse (RN).
- You must be giving direct patient care as an RN in an underserved or shortage area or in a county, state, prison, or veterans facility.
Nurses who receive the award must agree to work in one of the above areas for two years.
If you’re selected for the award, you can receive up to $8,000 for student loan repayment. You also can try for a second-time award of $11,000, but you’ll have to agree to another two years.
4. California Mental Health Loan Assumption Program
This award is for professionals working in the Public Mental Health System. According to OSHPD, some of the eligible positions include the following, based on need in the county you work in:
- Postdoctoral psychological assistants or trainees
- Marriage therapists
- Family therapists
- Social workers
- Clinical counselors or clinical counselor interns
- Psychiatric mental health nurse practitioners
- Other staff within such facilities
You can find more information about whether your work qualifies you for this award by going to the OSHPD website.
If you’re selected for an award, you can receive up to $10,000 for your California student loan repayment. In return, you must agree to continue the work for one year.
5. California State Loan Repayment Program
The California State Loan Repayment Program helps you pay your student loans in California if you work in one of the following fields, according to OSHPD:
- Primary care physicians
- Dental hygienists
- Physician assistants
- Nurse practitioners
- Certified nurse midwives
- Mental or behavioral health providers
That said, you must work in a shortage area, which you can learn more about on the OSHPD website. The award amount varies.
The California State Loan Repayment Program enables you to receive up to $110,000 if you’re a full-time student or half that if you’re a part-time student. You must commit to full-time status for at least two years or part-time status for at least four.
If you think you qualify, you can apply for the award on the OSHPD website.
6. Steven M. Thompson Physician Corps Loan Repayment Program
You might qualify for this program if you’re a California allopathic or osteopathic physician or surgeon with California student loans. Here are a few of the qualifications, according to OSHPD:
- You can’t be obligated to serve for any other programs.
- You have to be licensed to practice in California.
- You must work in a shortage area.
With this award, you can receive up to $105,000 for your California student loan repayment. But you must work full time in the designated shortage area for at least three years.
7. California Loan Repayment Assistance Programs (LRAPs) offered by your alma mater
If you don’t qualify for any of the aforementioned awards, there are other ways you can receive help. One way is through a student loan repayment assistance program (LRAP) offered by your alma mater.
You can find out if your alma mater offers an LRAP by browsing its website or contacting its financial aid office. For all you know, there could be a plan in place to help.
Statute of limitations on student loans in California
If you’re facing student loan default, look into the statute of limitations on debt as it pertains to your student loans. Keep in mind that it applies only to private student loans.
Basically, after a designated number of years, your debt becomes “time-barred.” When that happens, debt collectors can no longer successfully sue you to collect on that debt.
When the statute of limitations expires depends on the type of debt you have. Student loans fall under “written contracts,” which expire at four years in California.
In other words, if your private student loan debt is more than four years old and a debt collector tries to sue you to collect, there’s only one way the debt collector can win, and that’s if you don’t show up to court to use the statute of limitations to prove you no longer owe.
There’s one more important detail you should be aware of: If your private student loans are in default and you make a payment on them, you’ll restart the clock on the statute of limitations.
Federal income-driven repayment programs
If you have federal student loans and are having trouble making payments, you can take advantage of income-driven repayment (IDR) programs that cap your monthly obligation to 10 percent of your income.
These IDR programs allow you to stay current on your loans without going into deferment or forbearance. It’s important to realize, though, that you could end up paying much more in interest over time. Your loans might be forgiven after 20 or 25 years (depending on the program), but by that time you might have paid even more than you originally owed — and you might be taxed on the amount forgiven.
Once you start earning more money, you can put some of it toward paying off your loans faster.
Student loan refinancing
Another way to get your payments under control is by refinancing your student debt to a lower rate. This works especially well with private student loans. You can refinance to a lower rate or shorter term to get out of debt faster as well.
You can also refinance federal loans. If you don’t qualify for IDR, and you have good credit, refinancing your federal loans can save you money. However, you will also lose the potential to go on IDR later, if your financial situation changes.
Carefully weigh your options to determine if refinancing is the right move for you. It’s also possible to refinance your private student loans, and separately consolidate your federal loans if you want to maintain some of your protections.
Federal Public Service Loan Forgiveness
Borrowers that work for a government or nonprofit entity can potentially have their loans wiped out with Public Service Loan Forgiveness (PSLF). In order to qualify, you need to work in a qualifying job and make 120 consecutive payments on your eligible loans.
Before you begin a job on the basis of receiving PSLF, make sure your federal loans qualify, and double-check to see if your employer qualifies. In order to be most effective, you need to be on IDR, since standard repayment is designed to have your loans paid off in 10 years.
How to live your dream even with California student loans
Repaying student loan debt can be a lonely endeavor, especially if you feel like your number isn’t getting smaller as the years go by.
You can expedite your repayment by refinancing your student loans to a lower interest rate or paying extra whenever you can. But that’s not all you can do.
If you’d like to see the laws regarding California student loans change, take your ideas straight to the powers that be: your local representatives.
And finally, stay on top of your loans by doing the following:
- Utilizing the above programs if you qualify
- Understanding your rights, including those dictated by the statute of limitations on debt
- Remembering that you’re not alone in your debt payoff journey
Student loan debt is a challenge; there’s no question about that. But if you follow the steps above and remember to tap into the programs available to you in California, you can create a winning strategy.
Miranda Marquit contributed to this article.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|