This information is for admitted students, but prospective students (and their parents) should review it to mentally prepare for the out-of-pocket expenses UCs expect students to cough up. I had a student with a family income of $14,000 per year (well below the federal poverty level) who received $5,000 in subsidized loan, $4,500 in work-study (essentially loans because that amount can be converted), and $500 in unsubsidized loan (starts to accumulate interest from the day the student takes it out). Several middle-class families I’ve worked with received loans to cover the entire student budget ($0 in free money). The UCs are not cheap (certainly not cheaper compared to many other college options). Prepare now so you don’t get caught unexpectedly (I had one student whose family was unprepared and took out 100% loans for four years; with a six-figure salary working for Bay Area tech startups, the student managed to pay off all of the loans before turning 30).
For those of you who have already received your financial aid package, you read it correctly, MINIMUM out-of-pocket cost at a UC is around $10,000 (usually covered by loan and/or work-study offers) regardless of your family income (even if your family income is below the federal poverty level). Many students are not able to work and the work-study amount frequently gets converted to loans (you can also convert eligible loans to work-study). That means you will graduate with at least $40,000 worth of student debt (likely significantly more) if you are entering as a freshman, or at least $20,000 worth of student debt (likely significantly more) if you are entering as a transfer.
Make sure you apply to outside/private scholarships, there are still some out there. You may find scholarship resources for freshman and transfer students on my website. Consider looking for scholarships offered through local sources, such as Rotary Club, Lions Club, Elks Lodge, credit unions, local businesses, employers, and labor unions, which usually have less competition compared to scholarships with an online presence. It’s a lot of work, but it’s better than working while in college or paying back loans for the rest of your life.
Do NOT assume that you should just take out loans to pay for college and everything will work out. The government, colleges, and private lenders are NOT taking the time to educate you on how to manage your money or explain how crushing student loan debt could ruin your life. Loans are too easy to take out and the interests add up too quickly (particularly for unsubsidized or private loans). Federal student loans will follow you for life and not to be taken lightly (you will carry the debt until you die because student loans typically cannot be discharged through bankruptcy). This is further complicated by predatory student loan servicers that are taking advantage of borrowers and contributing to skyrocketing student loan default rates (find a video that offers a clear, comprehensive explanation of the problem here – please note the video contains explicit language); some states have begun addressing the issue and California students are now protected by the California Student Borrower Bill Of Rights.
Please note that I make the recommendation below because many families have asked me for college funding advice, which is a complicated and highly regulated field. This is simply for your information in case you are interested.
Most middle and upper-middle income families with dependent college students can lower out-of-pocket college costs, maximize grants and scholarships, and minimize debt with a little planning. Get the basics of how to navigate the college funding maze with SMARTTRACK’s FREE hour-long webinar. Looking for more personalized help? Sign up for a free SMARTTRACK account (for parents or guardians) to receive a complimentary College Funding Evaluation with a professional SMARTTRACK Advisor, as well as access to free money-saving tools (such as EFC calculator and tax strategies). Services and additional resources can be purchased through the account at a discount if further guidance is needed. (Purchases made from SMARTTRACK will generate a commission that helps support the free content on this website!)
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