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

How to Apply for the California Dream Act

How to Apply for the California Dream Act

College application season is here! That means that applying for financial aid is also here! When you are applying for financial aid, you will either apply for FAFSA or the California Dream Act! So you may be wondering, what is the difference between FAFSA and the CA Dream Act? They both help pay for your college education, but they are two separate applications. Keep reading to find out all the ins and outs of CA Dream Act! 

Background and Eligibility 

Q1. What is the California Dream Act? 

The California Dream Act allows undocumented and nonresident students (U.S. Citizens and eligible non-citizens) who qualify for a non-resident exemption under Assembly Bill 540 (AB 540) to receive certain types of financial aid such as: private scholarships funded through public universities, state administered financial aid, university grants, community college fee waivers, and Cal Grants. In addition, the California Dream Act, allows eligible students to pay in-state tuition at any public college in California.

Q2. Who can apply for the California Dream Act?

Students who live in California and meet the eligibility requirements for a non-resident exemption, as well as students who have a U Visa or TPS status, can use the California Dream Act application (CADAA). Similarly, students without Social Security Numbers or students who have lost DACA status (or never applied for DACA), may still be eligible. The full language of the law and eligibility requirements is stated in CA Education Code 68130.5

Q3. What is the difference between the FAFSA and the California Dream Act application?

Students should only complete one of the applications (not both), according to the citizenship requirements below:

  1. You are eligible to complete the FAFSA at www.fafsa.ed.gov if you are a:
  • U.S Citizen 
  • Permanent Resident 
  • Eligible non-citizen 
  • T Visa holder
  1. You are eligible to complete the CADAA at https://dream.csac.ca.gov/ if you are:
  • Undocumented 
  • Have a valid or expired DACA 
  • U Visa holders 
  • Have Temporary Protected Status (TPS) 2 | Page Revised 09/19 
  • Meet the non-resident exemption requirements under AB 540

Note: If you have further questions, including how to ensure you are completing the correct financial aid application, you can visit the Immigrants Rising website and review the document titled, “FAFSA VS CA Dream Act: Apply to the Correct Financial Aid,” at https://immigrantsrising.org/resource/fafsa-vs-ca-dream-act-apply-to-the-correct-financial-aid-in-ca/ 

Q4. What are the non-resident exemption requirements under AB 540?

Students must meet all four (4) requirements to be eligible:

  1. Time and coursework requirements
  • High school attendance in California for three or more years, OR 
  • Attainment of credits earned in California from a California high school equivalent to three or more years of full-time high school coursework and a total of three or more years of attendance in California elementary schools, California secondary schools, or a combination of those schools. OR 
  • Attainment of credits earned at a California adult school, OR 
  • Credits earned at a California Community College, OR 
  • A combination of the schools listed above 
  1. Degree or unit requirements (completion of either of the following):
  • Graduation from a California high school or the equivalent (GED, HiSET, TASC) •
  • Attainment of an Associate degree from a California Community College 
  • Fulfillment of the minimum transfer requirements from a California Community College to a UC or CSU campus
  1. Register or enroll in an accredited and qualifying California college or university

For a list of Cal Grant eligible schools, please visit: https://webutil.csac.ca.gov/CalGrant_Inst/CalGrantInstSearch.aspx 

  1. Submit a signed “Non-Resident Exemption” Request

Some schools will refer to this document as an “AB 540 affidavit.” This form states that you meet all the requirements to qualify for a non-resident exemption under AB 540 and, if you are undocumented, that you are in the process of legalizing your immigration status (or will do so as soon as you are eligible). 

Please contact the Residency Deputy or the Admissions and Records office at your college for information on how to complete your non-resident exemption form and to determine if supporting documentation is needed. You should complete this form upon accepting an offer to attend a college in California and at least one semester or quarter before you are scheduled to start classes. 

Q5. What should I do if I’ve already submitted a FAFSA before learning that I should have submitted a CADAA?

You must first complete the CADAA and then complete the “Application Conversion Form G-55” which can be obtained at: https://www.csac.ca.gov/post/application-conversion-form Please make a copy of this form for your records, send the original form (along with documentation to prove your identification) to the Commission and contact the financial aid office at the college you plan to attend to inform them of this error.

*For a full copy of of the California Dream Act FAQs for Students and Parents please go to this link: CA Dream Act FAQ

For a checklist of applying  for the CA Dream Act go here: CA Dream Act and Cal Grant Checklist 

For a checklist of applying for a Cal Grant through the CA Dream Act go here: CA Dream Act and Cal Grant Checklist

Sources: CSAC and Immigrants Rising

Get Educated: How to Fill Out the FAFSA

Get Educated: How to Fill Out the FAFSA

Happy October 1st! FAFSA opens October 1st, 2020, and closes March 2nd, 2021.

The FAFSA application process can be confusing and a bit scary, but it is important that you fill it out as soon as possible! Many families have suffered economically during the coronavirus pandemic and may have to take extra steps to qualify for maximum help. 

Please make sure you apply as early as possible! Many families have suffered economically during the coronavirus pandemic and may have to take extra steps to qualify for maximum help. 

According to a New York Times article, “completing the form early is always a good idea in order to meet varying deadlines for scholarships. But this year, college students or prospective applicants who have been affected by the pandemic may need to submit extra documents to their colleges.

The more you know about the FAFSA application process, the more you can help others. 

Download our easy-to-follow guide that clearly explains the FAFSA process and answers the most common questions from low-income students and parents.

Guide provided by:

Form Your Future and National College Access Network

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.

Appealing Your Financial Aid Award

Appealing Your Financial Aid Award

UC and CSU system officials are stating that financial aid appeals are up in both systems, with some campuses seeing as many as twice as many financial aid appeals as they had the year before.

If your financial situation has changed you can file an appeal at any time throughout your college journey. There is a chance your Expected Family Contribution (EFC) might be lowered. If your financial aid office lowers your EFC in response to your financial aid appeal, you may be able to take out additional federal loans or receive additional scholarships.

Financial aid appeal or request is available to qualifying students at all types of institutions offering federal financial aid. Federal law allows your financial aid office to make changes to your financial aid package under certain circumstances. Each school has its own process and requirements.

COVID-19 has impacted our families and communities tremendously. This might be a good time to consider if you qualify to submit a financial aid appeal. There is a free resource that will help you write a financial aid appeal letter – for free.

SwiftStudent is the only FREE, digital resource that provides financial aid appeal letter templates for students. Through SwiftStudent, students can learn about the financial aid appeal process, review eligibility requirements for making an appeal, and customize a financial aid appeal to start the conversation with your college financial aid office.

Get your appeal started today!