Congratulations! Making the decision to pursue higher education is an important step that can open doors and provide opportunities, but as you graduate you must start preparing for repayment of the loans used to pay for your education. Every 28 seconds someone defaults on their student loans from the over $130 billion in total outstanding student debt in California. The average student debt balance is over $35,000, making it difficult for borrowers to buy homes, invest, and start businesses. The State of California and the Federal Government offer programs and assistance to help you pay for your student loans.
An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. The main plans are Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). To apply, visit the Federal Student Aid website.
Deferment and Forbearance
Under certain circumstances, you may be eligible to temporarily stop making payments or reduce your monthly payment amount for a period of time. To see if you are eligible, visit the Federal Student Aid Deferment or Forbearance website.
Federal Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is intended to encourage individuals to work in public service. The program allows public service employees to have certain federal student loans forgiven after 10 years of payment. Examples of “public service” include work in government, public schools, police and fire departments, public hospitals, non-profits, national service programs and more. To certify that you work for a public service organization, have your employer download and complete the Forgiveness or Cancellation webpage.
Eligible physicians may apply for a loan repayment up to $300,000 in exchange for a five-year service obligation. Eligible dentists may apply for either a loan repayment up to $300,000 in exchange for a five-year services obligation or a practice support grant up to $300,000 in exchange for a ten-year service obligation. All awardees are required to maintain a patient caseload of 30% or more Medi-Cal beneficiaries. For more information visit the CalHealthCares program page.
Closed School Discharge
You may be eligible for discharge of your federal student loan if your school closes while you’re enrolled or soon after you withdraw. You may even be eligible for a 100% discharge of your William D. Ford Federal Direct Loan Program loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans if you were unable to complete your program because your school closed. To learn more about the application process for getting your loan discharged contact your loan servicer. For more information visit the Federal Student Aid Discharge page.
Office of Student Assistance and Relief (OSAR) provides individualized assistance to California residents selecting a private college. OSAR counsels California students as they navigate their financial and academic future following the closure or unlawful activities of the private college they attended. For more information visit the California Office of Student Assistance and Relief Student Assistance page.
Student Borrower Bill of Rights
Protecting the rights of the borrowers is imperative to our nation’s prosperity. The California State Assembly is committed to protecting student borrowers. The Legislature passed the Student Bill of Rights Act that imposes new requirements on student loan providers within California.
- Ends abusive practices by the student loan industry.
- Creates minimum standards for student loan companies.
- Enacts special protections for military families, teachers and other public service workers, disabled borrowers, and older Americans.
- Creates a new Student Loan Ombudsman to advocate on behalf of borrowers.
- Demands transparency from the student loan industry.