Higher Education is an Investment

Getting a college education is an investment that can pay back for a lifetime: people with a college education usually enhance their job opportunities, earn more money, and develop valuable skills and knowledge. Investing in your education means planning for the future and making some very important decisions early.

A four-year college degree is becoming more and more important for unlocking the doors to economic and educational opportunity in America today. Getting a college education requires time, effort, and careful planning, but it provides knowledge and skills you can use for the rest of your life.

According to the U.S. Department or Education, attending college helps to:

• Get (and keep) a better job. Because the world is changing rapidly, and many jobs rely on new technology, more and more jobs require education beyond high school. With a four-year college education, you will have more jobs from which to choose.
• Earn more money. On average a person who goes to college earns more than a person who does not. Someone with a two-year associate degree earns more than a high school graduate. In 1995, a man with a college degree earned almost 89 percent more than a man with only a high school diploma, and a woman with a college degree earned almost 73 percent more than a woman with only a high school diploma.
• Get a good start on life. A college education helps you acquire a wide range of knowledge in many subjects, as well as advanced knowledge in the specific subjects you are most interested in. College also trains students to express thoughts clearly in speech and in writing, to make informed decisions, and to use technology--useful skills on and off the job.

Planning Ahead: Financing your Education

Most people believe that college is much more expensive than it really is. Financial aid (money available from state governments, colleges, and the U.S. Department of Education) can help students pay for college. The basic costs of college are tuition (called "Registration Fees" at UCI) which are charges for instruction and attendance; fees, which cover other costs, like athletic activities and special events; and other expenses, including room and board (the cost of housing and food), books, supplies, and transportation.

The cost of tuition, fees, room and board, and other expenses may increase somewhat over time--but remember: as college costs increase, the amount of money you earn, and thus the amount you will have available to pay for college, may also rise. No one can be sure how much educational costs will change over time--so be cautious when people tell you a particular amount.

Costs at UCI

How much college costs usually depends on whether it is a public or private school. Most students attend state or public colleges, like UCI, which receive a portion of their budgets from state or local governments and can charge lower tuition to students who live in that state. Students from other states pay higher tuition. Private institutions tend to be more expensive than public colleges and charge the same tuition for in-state and out-of-state students.

Your expenses at UCI will vary depending on your academic program, your living arrangements, and other factors. The total cost of your college education can also be affected by choices you make about financing your education, such as: how much you can "pay as you go" from work or savings, what kinds of financial aid you receive, what loans you accept, what kind of budget you follow, and what your plans are after you leave UCI.

UCI's General Catalogue provides estimated expenses for students attending UCI during the 2002-03 academic year (see Expenses and Fees).

Paying for College: Financial Aid at UCI

Students and their families are not alone in paying the costs of college: every year millions of students apply for and receive financial aid and almost half of all students who go to college receive some kind of financial aid. More than 60 percent of UCI's enrolled students receive some form of financial aid. Students can apply for federal, state, and other student financial aid to help pay for college. Major types of aid are scholarships and grants (which do not have to be repaid), loans (which, like a car loan or a mortgage, must eventually be repaid), and work-study.

At UCI, the Office of Financial Aid and Scholarships determines eligibility for grants, scholarships, loans, and work study based on information from financial aid applications and other supporting documents. After they establish that you qualify for aid, they design an award "package." The type of package you receive not only depends on your need, but also whether or not you meet priority deadlines.

To learn more about financial aid programs at UCI, read about Financial Aid in UCI's General Catalogue or visit the web site of UCI's Office of Financial Aid and Scholarships.

Student Loans: Borrowing is One Option

Many students are hesitant to take out loans, but paying a loan after graduation may be easier than it might seem. Students usually do not have to start repaying their loans until after they finish school, and the interest rate is usually lower than for other kinds of loans.

If a student loan is included in your financial aid package, it is likely that borrowing is an important option for financing your education. Nevertheless, it is important to understand the terms of a loan before accepting one and to know when repayment will begin and how much your payments will be. There are many different education loans, so before taking out any loan, be sure to find out what the exact conditions of the loan are. Like other methods of financing your education, a student loan can be a good investment in your future; just remember that loans need to be repaid. Like any investor, the better you understand the potential costs and benefits of receiving a loan, the better you can decide if a particular loan is a good investment for you.

Maximizing Your Investment

If you decide to borrow, there may still be a number of steps you can take to minimize your costs (and maximize your investment):

• Borrow the cheapest money you can
  Loans have different costs. Interest rates, origination fees, and subsidies all determine how much you will pay for the money you borrow. If you have a choice of loan programs and/or other fund sources, you can calculate and compare these costs to determine which loans or other methods of finance are best for you before accepting a loan.
  Using a credit card to pay college expenses is another form of borrowing. If you pay credit card charges in full every month, before interest is charged (finance charges), credit cards can be a convenient and inexpensive way to handle some of your expenses. If you need to borrower longer-term, though, a student loan is almost always less expensive and usually provides more flexible repayment terms.
• Borrow only what you really need (and as little as possible)
  Although you may be offered a loan for a specific amount, you may not need to borrow the entire amount. You may be able to borrow less by reducing your expenses. If you receive money from a variety of sources or a variety of loan programs, you can consider using your less-expensive fund sources first and set aside more expensive funds to be used for emergencies. If you find you don't need the funds, you may be able to return them or repay early, to reduce your loan obligation. If you receive financial aid from UCI and are still in school, you'll want to contact UCI's Office of Financial Aid and Scholarships to learn if, and how, returning funds or paying back early may affect your financial aid eligibility.
• Pay back as soon as possible
  If you make payments on your loan early while you're in school or during your grace period, or if you make larger payments than are required, you can reduce the total amount of interest you will pay on your loan in addition to reducing your loan obligation. If you have an unsubsidized loan and are charged interest while you are in school, consider setting aside some of your loan proceeds to pay the interest when it comes due. If your unpaid interest is capitalized, it is added to your loan principal and future interest will be calculated on the new, larger amount. You will pay less in the long run if you can repay your interest as you go.
• Know and understand the special benefits of your loan(s)
  Student loan programs have different terms and conditions. Learn how these terms may benefit you in the long-term. Consider what your plans are for after you leave UCI and see what loan terms may apply to your circumstances. For example, portions of some loans can be canceled if you teach in certain areas, others are interest-free while you attend school or work in public service, and others defer payments for medical interns and residents. Receiving these benefits can reduce the cost of your loans, making a student loan an even better investment in your education.

A Final Note from Loan Services

Whether you are considering accepting a student loan, are continuing to borrow on an existing loan, or are in repayment, Loan Services is here to discuss UCI loan programs and to assist you in managing your student loans successfully. We believe a college education from UCI is a major ingredient for success in the world today-- we wish you success in your endeavors.

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