Financial Aid for Undocumented Students

Since undocumented students are not eligible for federal aid, and rarely have access to state aid, one of the most significant obstacles they face in America is finding financial support. Most undocumented students are forced to pay out-of-state tuition and do not qualify for private scholarships, grants or funds, leading many to turn to other options like personal loans.

Various financial institutions offer private loans for undocumented students, though the terms, conditions, and requirements vary greatly. This article provides students with a breakdown of the various paths forward they can take to find financial aid and complete their education in America.

Who are Undocumented Students?

An undocumented student is a student in America who is not an American citizen nor an “eligible noncitizen”, meaning someone who does not have a green card or permanent resident status, including F-1 visa holders. Undocumented students are often popularly referred to as “Dreamers,” derived from the DREAM Act legislation introduced in Congress, though this attribution typically only applies to students who have lived in the United States since they were very young.

Within the broad group of undocumented students, there is a subset known as DACA students, who have received Deferred Action for Childhood Arrivals.

DACA: What is it?

Typically, undocumented immigrants are targeted for removal from the country; DACA is a process begun in 2012 by the Department of Homeland Security that allows exceptions to be made in the case of children who arrived in the country at a young age. If the proper requirements are met, these immigrants can apply to the U.S. Citizenship and Immigration Services to have their removal deferred for up to two years, which they can renew annually. This does not give the applicant lawful status but gives them the ability to work and study in the country.

Who is a DACA Student?

DACA students are those undocumented immigrants who have applied for and received a deferral of their removal action. Most students who are granted a referral also receive work authorization. The combination of deferral and work authorization allows undocumented students to apply for a Social Security number, a valuable step in potentially transitioning to permanent status or receiving financial aid.

Eligibility for Financial Aid

The political controversy surrounding the status of undocumented students has made financial aid highly restricted and difficult to attain even for the most accomplished and qualified students. DACA students, or Dreamers, and the whole broader set of undocumented students cannot receive federal financial aid. State-level aid and aid provided by colleges is potentially accessible, though it can be difficult for the undocumented to qualify.

The first step of inquiry is to speak to your counselor or financial aid officer to see what aid is available. It’s also important to fill out the Free Application for Federal Student Aid, or FAFSA, which is how colleges decide who is eligible for aid. Completing a FAFSA requires a Social Security number, however.

More information on financial aid options for undocumented students can be found here: Financial Aid Options for International Students and Non-U.S. citizens.

College Admission Policies

Though there is a common misconception that undocumented immigrants are not allowed to attend a US state college, there is no legal obstacle in place preventing them from doing so. Citizenship is not required to attend school in America. Still, the positions and policies in place regarding undocumented students vary from school to school.

Some schools do ask for proof of citizenship from applicants, or at least residency, and may reject offhand those who do not qualify, though these policies are not reflected in law. The other obstacle in place is that many schools treat undocumented students as foreign students, allowing them to attend but barring them from state aid and in-state tuition.

College Tuition Policies

The issue of in-state tuition and financial aid for undocumented students is a political touchstone in America, refracting across partisan lines and folding into broader controversies surrounding immigration. Since many public universities and colleges deny the undocumented in-state tuition, options are often starkly limited. However, certain states allow undocumented students to apply for in-state tuition if they meet specific requirements.

The DREAM Act is a piece of legislation that gives undocumented students a path towards permanent legal status if they complete high school in the United States and arrived in the country before the age of 15. If passed, the legislation would allow such students to receive permanent status within six years if they graduate college in the United States or serve two years in the military.

Federal, state, and institutional financial aid policies

The typical avenues for students to attain financial aid, including federal and state grants and institutional financial aid, are broadly denied to undocumented students. Federal aid is not available and state aid is also generally denied, though some states allow for exceptions when applicants meet certain conditions. The majority of scholarships and funds require US citizenship to be eligible. Nevertheless, there are still ways to get personal, bank, and mortgage loans as a DACA student.

6 Best Personal Loans for Undocumented Students

The paucity of options available to undocumented students regarding financial aid leads many to apply for personal loans. These loans can also be difficult to attain since financial institutions often require proof of income, citizenship or residence, or a credit history before they are willing to disperse funds.

Some larger institutions offer options for undocumented immigrants and students, while others are geared specifically towards such immigrants and aim to provide options for those who may not otherwise have access to credit.

Here are 6 of the best options available:

College Ave

College Ave has student loans available for undocumented students, offering interest rates at 3.69% –12.07%. These loans are available for undergraduate and graduate students, as well as parents of undocumented students in the United States.

Citizens Bank

Citizens Bank offers loans at 4.07% –12.19% interest rates, available to undergraduate and graduate students and their parents. However, Citizens Banks requires a cosigner with good credit who is either a US citizen or permanent resident.

Sallie Mae

Sallie Mae offers 4.12% – 11.85% interest rates, with loans available for undergraduate and graduate students.

PNC

PNC has loans available to undocumented students at rates of 5.03% – 12.29%, which can be dispersed to undergraduate and graduate students.

LendKey

LendKey offers interest rates of 4.63% – 9.71% to undergraduate and graduate students.

Stilt

Stilt is a lender geared towards undocumented and documented immigrants, providing loans to those without the credit or financial history to get them from larger lenders. Offering interest rates at 7.99%-15.99%, Stilt gives opportunities to applicants other lenders deem “high-risk” because they lack a Social Security Number or a green card, or are simply seeking loans as international students.

Read More

• International Student Loans with No Cosigner
• How International Students Can Get a Car Loan
• Top 3 Personal Loans for F-1 Visa Holders
• Loans for Canadian Students Studying in the US
• Student Loan Forgiveness for Professors
• International Student Loans: The Complete Guide

Conclusion

The political controversy surrounding undocumented students has placed many obstacles in their path towards getting educated in the United States.  The avenues for financial aid that are available to most students are denied to the undocumented, but options like private loans are still feasible. Lenders tend to discriminate against the undocumented and those without a substantial financial history in the country as well, so you must find a lender that doesn’t have requirements or conditions you can’t meet.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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