DACA Student Loans: Options and Strategies for Dreamers

DACA recipients — the nearly 3.6 million U.S. residents here under the Deferred Action for Childhood Arrivals program — aren't eligible for federal student loans. But that doesn't mean a college education is out of reach for these “Dreamers.”

In fact, several financing and funding options are available to DACA students — some free, some that come at a cost. Use this guide to learn more about student loans and other financing options available to DACA recipients.

Current private student loan rates

Can DACA recipients get student loans?

DACA recipients aren't eligible for student loans from the federal government. These are reserved for U.S. nationals, permanent residents, and some immigrants, including those granted refugee, asylum, and a few other circumstances.

Private student loans, however, are an option for Dreamers. These loans come from private lenders and banks. Their terms, loan amounts, qualifying requirements, and other factors vary.

“Several private lenders do offer financing for DACA students,” says Stacey MacPhetres, senior director of education finance at EdAssist by Bright Horizons. “In some cases, DACA students would be considered international students.”

Student loans for DACA students

DACA students will need to meet certain financial requirements to qualify for private student loans, though these are “generally the same as for non-DACA borrowers,” according to Jack Wang, a college financial aid advisor at Innovative Advisory Group.

“Credit score, income history, and debt-to-income ratios all matter,” Wang says.

The exact requirements will depend on the lender, though many will require a cosigner. This is someone who agrees to legally share the responsibility of the loan and make payments if you fail to do so. Lenders will also consider a cosigner's financial situation — their income, DTI, credit score, and more — when processing your application. This could make it easier to qualify for a loan or get a better rate.

“Lender underwriting policies for private loans vary from lender to lender,” MacPhetres says. “In some cases, DACA students may be required to apply with a creditworthy co-borrower due to the credit requirements of the loan programs. There are also lenders who have tailored programs specifically for DACA students with assigned rates and terms.”

Some lenders offering private student loans to DACA students include Ascent, Earnest, and MPower.

Scholarships and grants for DACA students

Though private student loans are one option for DACA students, they do require you to pay interest — and shouldn't be the first source of funding you consider.

“Maximizing institutional aid, such as merit scholarships or need-based aid from a college, is always the first goal,” Wang says.

Many schools offer in-house grant and scholarship programs, which don't need to be repaid. These may be provided for specific degree programs, for students in financial need, or on a merit-based system for certain accomplishments or academic achievements. You can talk with someone in your school's financial aid department to learn about your options.

“Colleges that award institutional scholarships typically do not require a student to be a citizen or permanent resident to qualify,” MacPhetres says. “Many colleges also maintain institutional need-based funds for undocumented students to award eligibility through their institutional need-based financial aid programs.”

There are national scholarship opportunities for DACA students to explore, too. For example, scholarship fund TheDream.US, offers scholarship programs at 80 partner colleges, and Golden Door Scholars offers scholarships and scholarship matching.

State-specific funding for DACA recipients

DACA students' options depend largely on where they live. In at least 25 states, for example, DACA recipients can qualify for in-state tuition. These include Arizona, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, Oklahoma, Oregon, Rhode Island, Texas, Utah, Vermont, Virginia, and Washington.

And in 16 states, DACA students may be eligible for state-funded financial aid. These include California, Colorado, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oklahoma, Oregon, Texas, Vermont, Virginia, and Washington. The District of Columbia also allows DACA students to access financial aid funds.

Tips for managing student loans as a DACA recipient

Borrowing money should always be a last resort. If you do end up taking out a student loan as a DACA student, make sure you understand your loan's terms, and get on a budget to ensure you can always make your payments. You can also set up automatic payments, which may even qualify you for a lower interest rate, too.

Also, monitor your credit. As you make on-time payments, your credit score should increase, which might make refinancing your loans — to one with a lower rate or better terms — an option down the line.