DACA Student Loans and Financial Aid

Learn all about student loans and financial aid available to DACA students. Includes information on what loans you can avail, federal financial aid and loans for DACA students, state-wise financial aid, private student loans and other options that you could look into.

Updated by B Harshitha on 30th July 2020

If you are a “DREAMer” student, you may have taken the popular belief that it is impossible for students who hold a DACA to successfully secure a student loan to be true. While it is true that the DREAM Act was never passed, the former US President Barack Obama signed the Deferred Action for Childhood Arrivals in 2012, which has since opened up numerous opportunities for “DREAMer” students.

The DACA executive order permits immigrant individuals to stay in the US if they meet certain requirements. They are offered some protection from deportation and may even be given a work permit. These will remain for as long as their record is clean. 

Quite a number of DACA holders do not consider student loans to be an option for them. This is mainly because DACA students are not given the same benefits and privileges as US citizens. A majority of federal student aid options are not open to access for DACA students. This lack of funding availability can hamper their plans to pursue higher education. It has also been noted that a large number of requests to get a student loan get declined on a yearly basis for DACA students. But do not forget about private student loans.

Bear in mind that while difficulties do exist, it is not always the case. With about 1.1 million people who are eligible for the benefits and about 790,000 recipients, we can see that DACA holders make up a considerably big group. Your immigration status need not hinder your educational goals. Let us explore student loan and financial aid options for DACA students.

Table of contents:

What Is DACA?

Before we explore student loans and financial aids available for DACA students, let us first learn what DACA is. DACA stands for Deferred Action for Childhood Arrivals. It is an executive order that acts as a relief for children of illegal immigrants that is provided by the government. It protects these children from being deported from the US. It has to be understood since these kids were brought into the United States as minors and have managed to establish a life for themselves in the US over time. 

This order also provides to them a number of additional benefits. Passed by Obama, it gives them access to a work permit, a driving license and even a social security card. DACA holders are referred to as “Dreamers” since most of them found their way to the US in pursuit of the American dream and have tried to build a life for themselves through hard work.

While DACA banking remains quite challenging, fortunately, there are still quite a number of options DACA students can look into. 


What Loans Can DACA Recipients Avail?

The following are some loans that DACA students may apply for:

Personal Loans

With a little documentation, DACA holders may avail personal loans for a range of purposes. Since dreamers are considered to be high-risk individuals, banks will not be very enthusiastic about providing loans. But there are some alternative lenders who are willing to give loans to DACA holders. The interest rates vary from lender to lender. Be sure to perform a background check on the lender before making any deals.

Student Loans

While DACA students are mostly not eligible for federal aid, they can still get private student loans and a few scholarships. Their colleges may also provide some educational aid. Alternative loans are sometimes given even without any citizenship. But remember that your “high-risk” status may make you prey to slightly high interest rates. 

Mortgage Loans

Similar to personal loans, DACA holders can also avail financial assistance with their mortgage. Most of the time, you do not need to have a citizenship to get a housing loan. A residency status will do. 


DACA Student Loans

As already mentioned, student loan options for DACA students are not as varied or accessible as they are for US citizens. This does not mean that all hope is lost. DACA holders can still get good student loans and financial aid.

Can DACA students get student loans?

DACA students often do not qualify for federal student loans. This is because of their status as “high-risk” kids. But there is a range of other student loans that they could try and get their hands on. The only downside with private student loans is that they may come with comparatively higher interest rates and the students may have to find a cosigner to get a loan.

Can DACA Students Get Financial Aid?

College education is expensive and not everyone can afford to pay for it out of their own pockets. So, it goes without saying that yes, DACA students can also get good financial aid. Since federal education aid is not something that is open to them, they can look into other options like private scholarships.


Federal and State-wise Financial Aid for DACA Students

Federal financial aid isn’t available for DACA students

Even if immigrants are eligible noncitizens, there are quite a few obstacles that they may have to face to get federal financial aid.

About 800,000 Dreamers, despite being allowed to live in the US under the Obama-era program of DACA, are not eligible at all. If you are a DACA student with a Social Security Number, you may be able to fill out the FAFSA. This will enable you to receive a Student Aid Report that details all the non-federal aid that you are eligible to receive.

DACA Students Should Still Fill Out the FAFSA

As already mentioned, DACA students are not eligible for various forms of federal educational aid. This list includes Pell grants and federal student loans. The first step to receiving federal aid would be to fill out the FAFSA, or the Free Application for Federal Student Aid. There are a number of federal programs that depend on the completion of this form on the student’s part.

This does not mean that DACA students should refrain from filling out the FAFSA. Remember that there are numerous state and local programs organized for immigrants that depend on data in the student’s FAFSA. You would not want to miss out on any opportunities as a result of not filling out the FAFSA.

But in order to fill the FAFSA, you will require a Social Security number. A majority of DACA students lack a Social Security Number. But the ones who do would do well to complete the FAFSA and also sign up for state and local student financial aids. Take guidance from the guidelines provided at studentaid.gov for instructions on how to fill out the tax and residence details.

Discuss with your College’s Financial Aid Office or Guidance Counselor

You might want to talk to your college’s financial aid office or your high school guidance counselor to learn more about the state-based options that you may have. 

Different states have their own forms and their own rules. An example would be the Minnesota State Grant that comes with a state-specific DREAM Act application that gives DACA students $2000 that they are not required to pay back. Minnesota also charges only the in-state tuition rates from DACA students while most states charge out-of-state tuition rates even if they are a resident of the same state.

Read up on your state’s financial aid programs by using this map by National Association of Student Financial Aid Administrators.

Check financial aid for DACA students offered by organizations

If the colleges that you have shortlisted do not offer sufficient financial aid for DACA students or if you live in a state that is not big on supporting Dreamers with a good amount of financial aid. But fortunately there are quite a few organizations that are keen on offering support and good financial aid to DACA students.

An example would be TheDream.US that has partnered with 75 colleges in 14 different states to help DACA students finish their education. This organization also received a $33 million grant from Jeff Bezos, Amazon and his then-wife.

Four-year scholarships are offered by Golden Door Scholars for DACA students who are high-performing. 

Other potential sources of scholarships for DACA students include the Hispanic Scholarship Fund and QuestBridge. You can find more national and local opportunities using the Dream Educational Empowerment Program’s list of resources.


Financial Aid for DACA Students by State

Support for DACA students is offered at the state level that can be availed. There are a number of eligibility requirements to qualify for these. This map from the National Association of Student Financial Aid Administrators gives a list of all the grants and scholarships that are available in different states.

Undocumented students are offered in-state tuition fee rates in the following states:

  • California

  • Colorado

  • Connecticut

  • Florida

  • Illinois

  • Kansas

  • Maryland

  • Minnesota

  • Nebraska

  • New Jersey

  • New Mexico

  • New York

  • Oregon

  • Texas

  • Utah

  • Washington

  • District of Columbia

The following 5 states have supported laws that make DACA students eligible for financial aid:

  • Connecticut

  • Maryland

  • New Jersey

  • Oregon

  • Washington

Financial assistance is offered to DACA students in the following states:

  • California

  • Connecticut

  • Maryland

  • Minnesota

  • New Jersey

  • New Mexico

  • Oregon

  • Texas

  • Washington


Private Student Loans for DACA Students

Private student loans and financial aid is a very good option for DACA students considering how they are not eligible for federal aid and very few states coe forward to offer any form of financial assistance. Most private lenders agree to give student loans to DACA holders with a US citizen as a cosigner. 

Discover 

Discover offers private student loans to international students. They are required to have a qualified, creditworthy US citizen with a Social Security Number. The cosigner should also hold a good credit for the student loan to get approved and for the DACA student to avail good interest rates. The cosigner may either be a US citizen or a permanent resident of the US in order to be a qualified cosigner.  with a U.S. citizen as a cosigner. 

MPOWER 

MPOWER Financing is an organization that could help international students benefit greatly. They do not require the presence of a cosigner with the student, which can be very good news to immigrants who don’t have a lot of qualified contacts. Their fixed rate loans vary from $2,001 to $50,000. They also offer interest rate discounts up to 1.50%. They are willing to offer student loans and scholarships to students from over 190 nations

Citizens Bank

Citizens Bank is a private student loan lender that offers private loans to international students who have a cosigner with a strong credit. They either need to be a permanent resident or a US citizen. There is no necessity for this cosigner to be a parent. They can very well be an extended family member, friend or any contact who is ready to cosign.

Stilt

Stilt is another private student loan lender. They are focused on delivering student loans to immigrant students. One of the requirements that you need to satisfy to apply for a student loan with Stilt is that you need to be physically present in the United States. You need to have an address in any one of the states where they operate. You are also required to have a US based bank account under your name and a US based telephone number. They do not require that you have a cosigner or even an SSN to get a student loan to further pursue your education. 


Some other options for DACA students

There are a few prominent organizations that offer financial help to DACA students. You could start with the DREAMer’s Roadmap website and check for scholarship options.

As already mentioned, TheDream.US is also an organization that helps DACA students find appropriate colleges. Their mission reads ”We believe nothing should stand in your way of a college education—not the cost, your immigrant status, or the lack of financial aid. Our scholarships can help you pay for your college education.” The National Scholarship Award offered by them covers tuition fees up to $14,500 for an associate degree and $29,000 for a bachelor’s degree.

Dream Educational Empowerment Program’s resource page can also help you find organizations that support DACA students by offering financial assistance. 

You could even consider California as a state to move to since it is a place that offers considerable support to DACA students.

Personal loans can also be taken out. As a DACA student, there are organizations to consider that offer personal loans in an easier way. Some lenders even come with loans specifically for DACA residents. Lenders like LendingPoint, SoFi and Earnest give personal loans to immigrants. 

The Immigrant Law Group offers The Dreamers Scholarship which provides money to first-year DACA holding college students. The students need to hold a GPA of 2.5 or above, and should apply to one of 12 partner schools that include colleges in New York City, Florida, Washington, D.C., Texas, or California. There is also an online partner school.

Golden Door, along with scholarships, also offers mentorship to DACA students throughout their college and even beyond with internships and professional development help. 


In Conclusion

It can be quite stressful and frustrating for DACA students to find the right student loan and secure it. You may not have the same options as other students which can make you feel alienated. It is also very important for you to secure not just any student loan, but a good one that fits your needs. Finding financial aid that caters to your educational expenses are also essential because not everyone can afford to pay an amount as hefty as college fees out of pocket.

Your immigration status should not be a cause for your educational aspirations to get sidelined or demolished. After all, you are a “Dreamer” and your dreams have indispensable value that your government should, and as a matter of fact, does cater to.

There are state authorized plans that help DACA students with financial aid and a range of private student loan lenders who aim to make your life easier. Look into them and explore.