Financial Aid: The Basics

Prospective students have many options for financing their University educations. Grants and scholarships can reduce the total cost of attending; student and parent loans and student part-time work can help with the cash flow to manage the rest of the cost.

The total cost to each student and family depends on the campus the student is attending, and his or her living situation. A California resident living on campus can expect to pay about $24,000 for a year of UC attendance. The estimated budget for a student living off campus is about $22,000. For a student living with family and commuting, the estimated budget is $17,400 per year. Included in these estimates are undergraduate fees, housing, food, health insurance, transportation, books and personal expenses.

Nearly two-thirds of UC undergraduates receive some form of financial assistance from the University. Depending on their family’s income, students may qualify for federal, state and other need-based grants. Some scholarships are available to students irrespective of income, but most grant assistance is awarded to students from families with incomes up to about $60,000.

Most families use current earnings and savings to pay for the remaining cost of attendance but still may need to consider loans to cover the total. Though many families may balk at incurring debt, borrowing to finance a UC education is not like taking out a car loan or using a credit card. Interest rates on government-backed loans are lower than consumer loans, and the investment in a UC education pays for itself many times over.

See the chart below for examples of how four families of varying means and an independent student might finance the net cost of a UC education.

Grants

For low- and middle-income students, grants can substantially reduce the cost of attendance. UC students receive grants through programs including the federal Pell Grant, the state-funded Cal Grant and UC’s University Student Aid Program.

Like many other colleges and universities, UC uses a federal formula for determining a student’s grant assistance. This calculation is based on financial information the family supplies on the Free Application for Federal Student Aid (FAFSA).

Borrowing Wisely

Campus financial aid offices can be valuable allies as students and families negotiate the path to securing financial aid. Students should use these offices as their primary source of recommendations for loans.

As students go through the admissions and financial aid process, they and their families are likely to receive numerous offers of loans from private firms. They will also see ads on television and radio, in magazines and on the Web. But nearly always, a student will be better off with a federally backed loan awarded by a college.

Campus financial aid offices can advise families on how to obtain these better loans, which usually cost less overall and offer flexible repayment terms as well as safety-net provisions that allow deferred and income-based repayment, if needed.

Federal loans are available to nearly every student and family regardless of financial circumstances. To access these better loans, all students and families should file a FAFSA. Students should file the FAFSA even if they don't think their families can qualify for financial aid, because some financial tools, such as federal education loans, are available only to families who submit the FAFSA.

The Scholarship Search

Using information from admissions applications to determine eligibility, the University awards thousands of scholarships in recognition of academic achievement, community service, special talents and other personal characteristics. The average award is $3,500. Like grant aid, scholarships do not have to be repaid.

For more information on UC scholarships, see www.universityofcalifornia.edu/admissions/scholtypes. For more on other scholarship sources, as well as additional financial aid advice, see finaid.org.

Students should also investigate local scholarships from service groups such as the Rotary and Lion’s clubs, cultural and heritage groups, and businesses.

The FAFSA

Filing a FAFSA by the March 2 priority filing deadline—which also is the deadline for Cal Grants—ensures that students qualify for as much grant aid as possible. Missing the deadline may mean they qualify for significantly less aid, and may have to work more or borrow more to meet expenses.

In January, students and their parents can go to the PIN Website and apply for a PIN, necessary for signing the FAFSA online. Applying online, students and parents will get their PINs in as little as 48 hours; mail can take up to two weeks. Students should check the California Student Aid Commission's website, for dates and locations of free workshops offering help in completing the FAFSA.

After students are admitted, UC campuses will notify them of their financial aid packages, with details of the grants, scholarships and loans they qualify for.

Students should remember that the application for financial aid is not tied to admission, and that they should apply for aid before they have received an offer of admission. 

also in this issue:

UC Applications Top 120,000, an All-Time High
Governor's Proposed Budget Falls $400 Million Short of Regents'
How I Spent My Summer Vacation: Learning at UC
Save the Date: Spring Events
Financial Aid: The Basics
Questions About Transferring? Get Answers at ETS
Application Update Site Open: All Transfer Students Must Submit Form
Campuses Offer Support to Transfer Students
UC Is Tops in Green Building

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