I. Have. Been. Stressin’. Let me just tell you.
Let me break it down for you, this is my cost of attendance for my first/junior year at UC Berkeley:
Books and supplies: 1, 226
Tuition and Fees: 12, 864
Health Insurance: 2,014
Living Expenses: 12,754
My Gift Aid: 15,401
My Net Cost: 13,457
I kept wondering how I did not have to pay any fees for my undergraduate education. I thought that working full-time and being an independent student would screw me over. So this whole time I’ve been thinking that the financial aid office would recheck my aid and take some of it away, which would be tragic. I was wondering where this magic $15,401 number came from. By my calculations, that covers my tuition and fees, health insurance, and some of my books and supplies. There is $703 of those essential expenses that it looks like I have to cough up myself, as well as my living expenses that they estimate to be $12,754.
The reason I’m being covered is a lovely UC program called Blue and Gold. I’m writing this post to put my thoughts on paper, but also to let my friends who have not finished their undergraduate education that if you get into a UC and fork up the money to live and pay your bills, the UC will have your back and cover your tuition. The link for UC Berkeley’s specific program is here, but it is the same the general one linked above. In short, if you keep up your grades, apply for a cal grant, and make under $80,000 as a household (independent or dependent students), you’re automatically eligible for help. No excess paperwork, no essays, just pure help.
Now this did not relieve me of all of my stress. I still have to find a way to pay my rent, car payment, groceries, etc…with no job. The catch-22 is that getting a job reduces the amount of potential aid (which, in my case is irrelevant because I was not given any aid for living expenses). But I am filing a Student Contribution Appeal to update my status. Currently they think I make a certain amount, but I do not. I quit my job in the beginning of August to become a full-time student. I don’t want to work if I do not have to, that way I can for once just be a student. So my SC should go from what it is now to $0, as that is what I am making. But until I finish this form and until it is processed, I am paying for all of my expenses with no consistent income stream.
So…what’s the only other option? Loans? Oh hell no, I thought. But I need to keep what I have in my savings for emergencies, yet I need to pay my bills. So I did my research. Private loans can start low, around 2.5%, but that is a variable rate that can change and very few qualify for. Most of them really start around 6%-9%, and that is with excellent-to-good credit. Then I realized that part of my financial aid package is a Federal Unsubsidized Loan. I had to look up the difference, and this handy website helped. Then I read these sexy words:
Congress has passed and the President has signed the Bipartisan Student Loan Certainty Act of 2013, which ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan.
The following table provides the interest rates for new Direct Loans made on or after July 1, 2013, and before July 1, 2014. These rates will apply to all new Direct Loans made during this time, even loans already disbursed before the passage of the Act.
While I would prefer a subsidized loan, as the interest does not start accruing until six months after separation from the university, the going rate of 3.86% for both unsubsidized and subsidized federal loans is pretty attractive when compared to private loans. I also learned in a Cal financial workshop yesterday that I can wait to accept these loans and therefore not rush into any decisions. I can see if I can hack it until October and then decide I need the $12,500, or chose a partial amount, that they are offering me and go along my merry well.
Basically, what I am saying is that I am a lot more informed now and I lot more comfortable with this whole “student loan” option. Hopefully I can get more gift aid because I am not working, but even so, $25,000 over two years in loans is a lot less than if I had attended Cal for all four years.
P.S. In 2014 this bad boy kicks in: Health Care and Education Reconciliation Act