Resources for Student Loan Borrowers

Resources for Student Loan Borrowers

The Institute for College Access & Success (TICAS) has put together tools and advice for students and borrowers impacted by the Coronavirus. They have compiled a list of what you need to know about your student loans during the COVID-19 pandemic, including: 

  • The basics of student loans during COVID 
  • Are your loans covered by new benefits?
  • What happens if your loans are in a grace period?
  • Late payments
  • What happens if your loan is in default?
  • What happens if your federal loans aren’t covered by COVID protections?
  • Options if you have private students loans

Visit their page Resources for Student Loan Borrowers for more information. 

This resource was provided by TICAS

Student Loans 101: An Intro Guide to Student Loans

Student Loans 101: An Intro Guide to Student Loans

Paying for college can seem intimidating, but after calculating your net price, you’ll get a better sense of your education’s affordability. Though you may receive grants, scholarships, and other money you do not have to pay back, you may have to take out loans to pay for school.

What exactly is a loan?

Simply put, a loan is money that is borrowed. Unlike your grants and other aid, you will eventually have to repay your loan. That said, there are varying types of loans that have different terms and conditions. This article will cover the most common types of college loans. 

Federal subsidized loan

After reviewing your FAFSA application, your school may offer you a subsidized loan if they deem you high-need. The amount they offer you will depend on the rest of your financial aid package. They will never offer you a subsidized loan that exceeds the cost of your school’s attendance.

With a subsidized loan, you are not required to pay interest while you are a student (half time or more). After you graduate, you have six months until you are required to begin paying. This loan is offered by the federal government. 

Federal Unsubsidized loan

Regardless of your financial need, your school will offer you an unsubsidized loan. The amount they will offer you will depend on the rest of your financial aid package. 

With an unsubsidized loan, you are required to begin paying interest as soon as you take out the loan. If you do not want to pay the interest immediately, you may defer your payments (postpone them). Deferring your payments, however, will add the interest due to your capital (the original amount of money you borrowed). Read more on interest and capital below.

Federal vs Private loans

Despite the complexity of federal loans, they are both better options than a private loan from a bank or other financial institution. Federal loans have lower interest rates than banks, meaning that in the long run, you will pay less back. Some of the federal loans perks include:

  • Terms and conditions set by law. Conversely, private lenders can change their terms and conditions whenever they want.
  • Fixed interest rates. This means you won’t be subjected to a higher interest rate because of the market or your credit score. Private lenders can change their interest rates as they see fit. With lower interest rates, you pay less in the long run!
  • Loan forgiveness programs. Your federal debt may be forgiven if you work in certain public service sectors. 

CA Dream Loan Program
If you are an undocumented student in California, you are not eligible for federal student loans. However, California has the CA Dream Loan Program available to undergraduate and graduate students attending the CSU and UC. 

Your school’s financial aid office will offer you the loan based on your Dream Act application. The maximum loan is $4,000 a year. You are not required to pay interest while you are in school and have six months to start paying your loan off. The terms and agreements are almost identical to the federal subsidized loan. 

Read more about the difference between government (state and federal)  and private loans here. We at Let’s Go to College CA, highly encourage you to use government loans over private loans; we believe the terms and conditions are better than private loans. 

Principal and Interest Rate

What is a principal?

In finance, the principal is the amount of money that you owe. If you take out a $1,000 loan, your principal is simply $1,000.

What is interest?

Interest is the cost of borrowing money. A financial institution will charge you a percentage of the capital, that you have to pay back on their terms. You can pay the interest monthly, yearly, or however often required. 

People often think that when you pay interest, you are paying off your loan. This is incorrect. You are simply paying the financial institution for the privilege of having the capital.

Let’s say you take out a $1,000 loan. The interest rate (the percentage of the capital) is 10%. This means that monthly, you are paying the financial institution $100. Even though you are paying $100 every month, your capital, the $1000 you originally borrowed, is still $1000. Again, this is because you have only been paying interest.

The only way to decrease the capital is to pay extra money in addition to the interest. If your capital is $1000 and your interest rate is 10%, then you may want to pay $150. That way, $100 goes towards interest and $50 towards your capital. Then, your capital is $950. This means that your interest payment is now $95. Remember, interest is simply a percentage of the capital you owe. 

Please note that with unsubsidized loans, your deferred interest becomes part of your capital. Let’s say you took out a $1000 loan. You differ your 10% interest rates for a whole year (12 months), meaning you did not pay $1200 worth of interest. This amount gets added to your capital, so instead of owing $1000, you now owe $2200. This is how student debt accumulates significantly!

Check out these Youtube videos for more explanation on capital and interest rates. 

Check out this US News Report article on college financial literacy. It includes links and brief explanations on budgeting, living on your own, filing taxes, and more. 

Vocabulary Summary

Here is a quick rundown of the terms mentioned above!

Federal Subsidized – a loan that does not charge interest until six months after you have graduate college given by the federal government.

Federal Unsubsidized – a loan that charges interest as soon as you take the loan out given by the federal government.

Private loan – a loan that charges interest as soon as you take it out, given by a private lender like a bank, credit union, or other financial institution.

Capital – the amount of money that you owe.

Interest – a percentage of the capital that you are charged for the privilege of the loan

Please know that Let’s Go to College CA is student-led and student-centered. We understand the burden of student debt and will constantly advocate for better affordability. Please check back soon for more information on paying back loans, loan forgiveness, and more.

Get Connected! Internet + Technology Services

Get Connected! Internet + Technology Services

By MONICA AGUILERA

Boba-drinking, Zelda-playing, Horror-watching brown girl from Oaxacalifornia.

As students and educators go online, the digital divide between low income, BIPOC students, and other students has never become more apparent. According to a 2019 report by the Public Policy Institute of California, only ¨between 54% and 67% of low-income, rural, African American, and Latino households had broadband subscriptions in 2017, compared to 74% for all households¨. This means there are students without any internet connection to access their school work. In addition, in many of these cases, there is also no home computer, and if there is, it is being shared by multiple people. 

California, however, has stepped in to make online learning accessible to everyone.  About 56,700 laptops and 94,000 hotspots have been sent to districts across the state so far and the California Department of Education announced that it will be granting $5 million to local districts to purchase 20,000 more devices or hotspots. This will be a huge beneficiary to Black and Latinx students specifically in rural areas who typically lack this access even before the virus. 

If you or someone you know needs internet access or an electronic device as we go digital, below are some resources you can access. In this list, you can find different internet providers that have lowered their cost for students, along with where you can find low-cost computers. In addition to these resources, feel free to contact your college to see if they have a loaner program for students regarding laptops or other electronic devices. You deserve all the tools to have a successful semester! 

Human-I-T

Human-I-T believes that through social entrepreneurship, opportunities are created for our world to become more inclusive, sustainable, and bold. We inspire and empower people through technology and information to achieve their full potential. This isn’t just our mission. It’s our purpose.

Low-Cost Internet, Affordable Computers, Free Digital Training – Download flier here

Other reduced-cost or free internet access:

Information on low-cost computers:

Northern California: in English and Spanish

Southern California: in English and Spanish

Food Banks

Food Banks

By MONICA AGUILERA

Boba-drinking, Zelda-playing, Horror-watching brown girl from Oaxacalifornia.

Food is a basic human right, yet prior to the COVID-19 pandemic, over 36% of college students faced food insecurity in the United States. According to Feeding America, food insecurity is “a federal measure of a household’s ability to provide enough food for every person in the household to have an active, healthy life.” Food insecurity is such a big issue for students because it can affect your test scores, concentration, energy, academic standing, and lowers your chances of graduating. In addition, food insecurity affects the most vulnerable students ex. students who receive financial aid, students who are parents/ caretakers, students with disabilities, LGBTQ+ students, first-generation students, BIPOC, and more.

Unfortunately, students who are facing food insecurity are not accessing all the public benefits they could. The food insecurity among college students can get worse because families are losing income, medical bills are piling up, and folks are being forced to tap-in to their savings. However there are college, local, state and federal resources for you as a student.

Below is a list of food banks/ pantries that are accessible to you and your family at no cost, because no student should go upon not knowing when their next meal will be.

CalFresh – Receive up to $193/month for groceries

CalFresh – Receive up to $193/month for groceries

By ARIANA LOPEZ TORRES

Ariana is studying microbiology, she enjoys listening to true-crime podcasts and spending time with her cat Luna.

The CalFresh Program is for people with low-income who meet federal income eligibility rules. CalFresh provides you with a budget to put healthy and nutritious food on the table.

CalFresh is a state program that awards you up to $193 a month for groceries.

If you are a student, you can get CalFresh if you:

  • Work at least 20hrs/wk, on average, OR
  • Are approved for state or federal work-study money and anticipate working during the term, OR
  • Are a full-time student with a child under age 12
  • For further requirements, click here.
  • More special rules for students and exceptions click here.

To begin signing up for CalFresh, select your county and get started. You will need to submit proof of your situation.

  • Documents that are usually required to get CalFresh:
    • Copy of ID
    • Proof of any income
    • Proof of immigration status (for non-citizens)
    • Proof of student status (for college students)
  • What if you can’t get proof?
    • Tell the caseworker during the interview. CalFresh generally accepts a sworn statement as last resort.

Apply now online at https://www.getcalfresh.org/