Over half of financial aid comes in the form of loans to students or parents that must be repaid. Student loans are subsidized by the government, so no interest accrues until the student begins repayment after he or she graduates.

At CSU schools, over 56 percent of all undergraduates who receive financial aid typically take out a student loan.

The average loan for 2009-10 was $7,485. A large percentage of UC students take out student loans as well.Almost all students qualify for some form of student loan, but should consider the obligations associated with borrowing. It is likely that students will use a combination of funding options for college, but ideally, they will have scholarship money to offset the cost they will have to borrow.