New senate bill would allow Dream Act students to qualify for loans

Ilian Cervantes

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An estimated 6,400 CSU students unable to receive federal or private loans due to residency status would have the chance to close that gap in financial aid through a California Dream Loan.

The Dream Loan Act, drafted by Senator Ricardo Lara, was introduced April 9 and will go through the state legislative process.

CSU Chancellor Timothy White and University of California President Janet Napolitano also came in support of the bill.

“The California State University stands with Senator Lara and the University of California in supporting improved access to financial aid for the state’s growing population of AB 540 students,” White said at the bill’s announcement. “These students are not currently eligible for federal financial aid. “The proposed campus-based Dream Loan Program addresses this critical funding gap and will enable these students to attend college, graduate and contribute to California’s economy.”

Sacramento State President Alexander Gonzalez went to the Capitol the same day the bill was introduced on behalf of the California State University to show support for the act, which would help provide funds for undocumented students.

“It is consistent with the California State University system’s values of access and affordability for all students,” Gonzalez said. “Every student we admit as a campus and a system should have the ability to succeed, so I was proud to represent the CSU in supporting this bill.”

Individual institutions would supply $2.3 million while the state funds $6.9 million the first year of its effect. The maximum amount CSU students can loan is still undecided, but a spokesperson for Senator Lara said the Dream Loan will be similar to the Perkins Loan, which students who filed under FAFSA can receive, and include a 5 percent interest rate.

CSU Director of Public Affairs Mike Uhlenkamp said the only challenge recipients face is they cannot receive federal loans like other students who complete their financial aid through FAFSA.

“If you were a citizen of California and you filled out your financial aid packages, you’re getting grants, loans, work study and whatever else goes into the package,” Uhlenkamp said. “If you’re an AB 540 student, you would have gotten that same package with the exception of federal loans.”

Uhlenkamp said the Dream Loan would provide students waivers, which allow the undocumented residents to pay in-state tuition, and the ability to gain equal footing with students eligible for federal financial aid.

“If you received $10,000 in financial aid, $3,000 would come from loans,” Uhlenkamp said. “If you were an AB 540 student, you would only get $7,000 without the other $3,000 that comes from loans. This would fill that gap.”

In 2011, joint bills were introduced, allowing AB 540 students to apply for and receive scholarships in public colleges. They soon became available for university grants under AB 131, which took effect last year.

Melgar said Lara is trying to ensure AB 540 students have access to their version of the California dream and have access to resources that will lead to graduation, since the loan would be paid back with interest rates to recycle back into the program and fund future scholarships.

“What we’re seeing is the universities think like we do that this is a student population that isn’t going anywhere,” Melgar aid. “They’re contributing to our economies in the long term and in recognition of that, the UC and CSU systems have come onboard to support the measure.”

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