Student aid options for unauthorized immigrants in California

UC Riverside student Mitzie Perez sued Wells Fargo last week for denying her a private student loan because she is not a U.S. citizen or permanent resident. “As a result of Wells Fargo’s denial, Ms. Perez was forced to cover her entire tuition using various credit cards,” the lawsuit said.

This makes it sound as if the only options for students who are unauthorized immigrants in California are private loans and credit cards. Although they are not eligible for federal grants, loans or work-study, those students in California who meet certain requirements have access to the same state aid available to California residents.

This includes in-state tuition, Cal Grants, UC grants, State University Grants, community college fee waivers and scholarships administered by public colleges. To qualify, unauthorized-immigrant students generally must have spent at least three years at a California high school, but there are a few exceptions.

All students have until March 2 to apply for Cal Grants and Middle-Class Scholarships for 2017-18 by filing either the Free Application for Federal Student Aid (citizens and permanent residents) or the California Dream Act Application (unauthorized immigrants). Many campuses use these applications to award aid from their own funds.

Cal Grants will pay up to the full system-wide in-state tuition at UC and California State University campuses, up to $9,084 (this academic year) at private colleges and up to $1,670 per year at community colleges.

Unauthorized-immigrant students who qualify for financial aid in California are often called Dreamers, after the California Dream Act. This can be confusing, because people who have qualified under the federal Deferred Action for Childhood Arrivals program are also called Dreamers. But the federal and state programs are separate.

DACA lets certain unauthorized immigrants who entered the country before age 16 get deferred action from deportation and a work permit for two years, subject to renewal. It does not make them eligible for federal financial aid. But it does let them work legally in the United States, so they can help pay for college.

Students do not have to have that status to get financial aid in California, and getting it does not automatically entitle them to state aid. Likewise, qualifying for financial aid in California does not allow an unauthorized-immigrant student to work legally.

Even if they got a Social Security number under the federal program, the students must use the Dream Act application, not the federal one, to apply for state aid, said Lupita Cortez Alcalá, executive director of the California Student Aid Commission.

Unauthorized-immigrant students who qualify for in-state tuition are also eligible for scholarships awarded or administered by public colleges in California, even if they are privately funded, said Dean Kulju, director of student financial aid for the Cal State system.

There are some private scholarships just for unauthorized-immigrant students. TheDream.US offers scholarships to DACA students at 75 “partner colleges” in 14 states, including California. Recipients of its “national scholarships” can receive up to $25,000 over four years. Facebook CEO Mark Zuckerberg and his wife donated $5 million to provide TheDream.US scholarships for students at participating Bay Area colleges. The application deadline is March 8.

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If they can get one. Perez, 25, is a third-year DACA student at UC Riverside. On Aug. 26, Perez applied for a student loan on Wells Fargo’s website but was denied because she is not a U.S citizen or permanent resident. On Jan. 30, Perez and the California League of United Latin American Citizens filed a lawsuit in San Francisco federal court alleging that Wells Fargo’s denial violates federal and state civil rights laws. The suit seeks class-action status.

Perez said she came to the United States when she was 5, grew up in the Inland Empire and now lives in Los Angeles County. She wouldn’t say what type of financial aid she gets, but “it’s not enough to cover my living expenses, my tuition, my books, my commuting expenses.”

If Perez qualifies for in-state tuition, should could apply for a California Dream loan, which became available at UC and CSU campuses in 2015-16. Each campus decides how much a student can borrow based on funding, but the maximum is $4,000 per year.

This Dream loan is similar to a federal subsidized Stafford loan. The interest rate is the same (3.7 percent in 2016-17) and no interest accrues while the student is in school at least half time. But there is no guarantee a student will get one. “The loan is not an entitlement, it’s often first-come, first-served,” said Nancy Jodaitis, a director with Educators for Fair Consideration.

Students who are here legally can get federal student and parent loans to cover all of their unmet financial need. Federal student loans are cheaper, have lower interest rates and better repayment terms than private student loans, said Mark Kantrowitz, publisher of college and scholarship search site But they are not available to unauthorized immigrants.

Wells Fargo is believed to be the third-largest provider of private student loans, after Sallie Mae and Discover, Kantrowitz said. Representatives for Sallie Mae and Discover say they treat DACA borrowers like international students. If they are otherwise qualified, they can get a student loan if they have a creditworthy co-signer who is a U.S. citizen or permanent resident. Neither would say how many loans they have made to DACA students.  

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In a letter to high schools, the California Student Aid Commission said, “Regardless of what happens at the federal level, state financial aid for Dreamers remains legal in California.” It added that “information provided via the California Dream Act Application is used solely to determine eligibility for state financial aid and isn’t shared with the federal government or used for immigration enforcement purposes. CSAC will protect this information to the fullest extent of the law.”