UC-Backed State Loan Program Will Provide Aid to Undocumented Students

UC-Backed State Loan Program Will Provide Aid to Undocumented Students

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Undocumented UC students who qualify for in-state tuition but are ineligible for federal assistance soon will be able to borrow up to $4,000 a year to make up the shortfall, thanks to a new law supported by the University of California and state legislators.

Gov. Jerry Brown signed legislative bill SB 1210 last week, creating the new California DREAM Loan Program. The bill was sponsored by state Sen. Ricardo Lara, and supported by both UC and the California State University system.

“Giving undocumented students the same access to financial aid as other students can improve their chances of academic success and help them reach their dream of a college degree and a brighter future,” said UC President Janet Napolitano. “By investing in our students, we are investing in California.”

About 2,000 undocumented undergraduate students are enrolled at UC. They typically are the first in their families to attend college and come from low-income households.

Under existing state law, undocumented students who graduate from a California high school and meet other eligibility requirements under the California Dream Act can pay in-state tuition at UC and CSU, and are eligible for state and university financial aid. But they do not qualify for federal assistance, and that lack of eligibility for federally sponsored financial aid virtually eliminates their access to student loans.

The California DREAM Loan Program aims to close that gap. It establishes campus loan programs at UC and CSU that allow undocumented students to borrow up to $4,000 per academic year, with a maximum of $20,000 from any one campus.

Repaid loans will go back into the pool for future loans, eventually creating a self-sustaining program with income from the repayment of principal, interest and fees offsetting administrative costs.

The first-year cost for the state and UC is an estimated $3.1 million each, starting in the 2015-16 fiscal year, and $3.6 million the following year. That amount eventually would decline until the program becomes self-supporting.