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Are you thinking about going to college in the Golden State, and looking to secure California student loans? Or are you a graduate forging a career in California who is already managing student loans?
Both situations can be stressful. In one, you’re looking for ways to finance an education with a potentially hefty price tag. In the other, you’re looking to cut your debt as you move forward in your career.
Here’s the good news: There are several programs to help you both get and manage California student loans. Read on to find some options that could work for you.
Federal student loans for California schools
Private student loans for attending college in California
Loan repayment plans for California residents
Federal income-driven repayment programs
Student loan refinancing
Federal Public Service Loan Forgiveness
Utilizing the statute of limitations on student loans in California
More options for paying for school in California
Federal student loans for California schools
If you hope to attend college in California, just as in any state, you can get federal student loans to help you pay for it. 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 the amount you can borrow in federal student loans. You don’t need to worry about a credit check or income qualifications to get these types of loans. Plus, if you qualify based on need, you might be able to get subsidized loans, meaning the government will pay your interest as long as you’re in school.
You can get federal loans each year you attend college, and you’ll have to complete a new FAFSA each year.
Private student loans for attending college in California
Private student loans can be a way to bridge a funding gap for California student loans, if needed. After receiving your financial aid package, calculate the difference between what it will cost to attend college (including tuition, fees, books, and room and board) and what you have. Then you can apply for private student loans 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, based on your financial situation, you might consider getting a cosigner to help you.
Loan repayment plans for California residents
So, what if you’re already done with school? If you have student loans and are working or want to work in California, here are some student loan repayment assistance programs that can help, depending on your needs, career choice and qualifications:
1. CDA Foundation Student Loan Repayment Grant
2. California Bachelor of Science Nursing Loan Repayment Program
3. Licensed Mental Health Services Provider Education Program
4. California State Loan Repayment Program
5. Steven M. Thompson Physician Corps Loan Repayment Program
1. 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 student loans. You must be eligible to practice dentistry in California.
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.
2. California Bachelor of Science Nursing Loan Repayment Program
The Office of Statewide Health Planning and Development (OSHPD) offers several loan repayment programs. One of them is a program for California nurses. Among the qualifications:
- You must have a Bachelor of Science nursing degree.
- You must be a California-licensed registered nurse (RN).
- You must be providing direct patient care for at least 32 hours a week.
- You must be willing to work in an underserved area in California for a year.
If you’re selected for the award, you can receive up to $10,000 for student loan repayment. Applicants can receive this reward up to three times.
You can find more information about whether your work qualifies you for this award by going to the OSHPD website.
3. Licensed Mental Health Services Provider Education Program
This award, also offered by the OSHPD, is for professionals working in the Public Mental Health System. The eligible positions for receiving this award include the following, and they are based on need in the county in which you work:
- Associate marriage and family therapist
- Associate clinical social worker
- Registered or licensed psychologist
- Postdoctoral psychological assistant
- Postdoctoral psychological trainee
- Registered or licensed marriage and family therapist
If you’re selected for an award, you can receive up to $15,000 for your student loan repayment for a two-year commitment. Mental health professionals who are former foster youth are specifically encouraged to apply to this program.
You can find more information about whether your work qualifies you for this award by going to the OSHPD website.
4. California State Loan Repayment Program
The California State Loan Repayment Program helps you pay your student loans if you work in one of the following fields, according to OSHPD:
- Medicine
- Dental care
- Social work
- Nursing
- Certified nurse midwives
- Pharmaceuticals
- Psychology/mental and behavioral health
This program enables you to receive up to $110,000 if you’re a full-time student, or up to $80,000 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 may qualify, you can apply for the award on the OSHPD website.
5. 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. Here are a few more 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 student loan repayment. You must work full-time in a designated shortage area for at least three years. Applicants may be rewarded up to two times.
Other loan repayment programs from OSHPD can be found here.
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% 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, although you should be cautious about doing so. Yes, if you don’t qualify for IDR, and you have good credit, refinancing your federal loans may save you money. However, you will also lose the potential to go on IDR later, if your financial situation changes, and other benefits that come along with having federal loans.
Federal Public Service Loan Forgiveness
Borrowers who 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, as standard repayment is designed to have your loans paid off in 10 years.
Utilizing the 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.
Keep in mind that all of this should be a last resort, as going into student loan default can have a very negative effect on your credit score. It’s always best to pay back your student loans if you can, and make every effort to do so.
More options for paying for school in California
Grants and scholarships for attending school in California can help you cut into your college expenses, and might even allow you to graduate with no debt. You might even qualify for completely free tuition through Free City. This award 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.
Yes, Free City is a limited program. Cal Grant is much broader. According to the California Student Aid Commission, 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
Cal Grants come in three types: A, B and C. The eligibility requirements and award amounts vary based on your FAFSA, school, GPA and more.
There are more specialized grant programs for California students as well, including:
Look for more programs on the CSAC website. And here’s more information on finding money for college.
Rebecca Stropoli and Miranda Marquit contributed to this article.
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