Student loan options for DACA recipients

DACA recipients cannot access federal student loans like Direct Loans or Pell Grants, but you can finance college through private student loans, state-based financial aid, and institutional scholarships. This guide covers how families and students can navigate these options to build a complete funding strategy.

For many families, the realization that federal aid is unavailable can be stressful. However, the landscape for “Dreamers” has improved significantly in recent years. Many private lenders now specifically cater to DACA students, and several states have passed legislation to open up public financial aid to non-citizens. By understanding the full scope of what is available, you can create a plan that covers tuition without relying on federal programs.

By the end of this guide, you will be able to:

• Identify which private lenders and state programs offer funding to DACA recipients.
• Assemble the specific documentation required for non-citizen loan applications.
• Create a funding waterfall strategy that prioritizes “free money” before debt.

Understanding DACA status and federal aid ineligibility

The first step in planning your college finances is understanding exactly where the boundaries lie with federal aid. Deferred Action for Childhood Arrivals (DACA) provides temporary protection from deportation and work authorization, but it does not grant the status required for Title IV federal financial aid.

According to StudentAid.gov (as of January 2025), federal student aid is generally reserved for U.S. citizens or “eligible noncitizens,” a category that includes permanent residents (green card holders) but explicitly excludes those with DACA status. Even though DACA recipients possess a Social Security Number (SSN) and an Employment Authorization Document (EAD), these documents do not override the statutory citizenship requirements for federal lending programs.

This ineligibility means that DACA students miss out on the protections available with federal student loans, such as income-driven repayment plans and Public Service Loan Forgiveness (PSLF). Because these safety nets are not available, families must be more diligent when reviewing the terms of private loans or other financing options.

A common point of confusion is whether DACA students should file the Free Application for Federal Student Aid (FAFSA). Generally, you should not file the FAFSA if you are a DACA recipient, as you will be rejected for federal aid. However, there is a nuance: some colleges may ask you to file it solely to calculate financial need for their institutional aid, or they may have a separate institutional form. Always check with your school’s financial aid office before submitting a FAFSA to ensure you are following their specific procedure for undocumented students.

Private student loans for DACA recipients

For many DACA students, private student loans are the primary method for covering the gap between savings and the cost of attendance. Unlike federal loans, which are funded by the government, these loans are provided by banks, credit unions, and online lenders. While they were once difficult to obtain for non-citizens, the market has evolved, and several major lenders now welcome DACA applicants.

To qualify for a private loan, lenders need assurance that the debt will be repaid. Since DACA status is temporary, lenders often have stricter criteria for these applicants. The most critical requirement is usually a creditworthy co-signer who is a U.S. citizen or permanent resident. According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” This is especially true for DACA students, as the co-signer provides the security the lender needs.

However, some lenders have begun offering loans to DACA students without a co-signer, provided the student meets high income and credit standards, though this is less common for undergraduates.

Source: Lender eligibility criteria as of January 2025.

Quick Decision Guide: If you have a creditworthy parent or guardian who is a U.S. citizen, applying with lenders like College Ave or Sallie Mae often yields the lowest interest rates. If you do not have a co-signer, specialized lenders like MPOWER or Funding U are your best path, though interest rates may be higher.

As of January 2025, private student loan interest rates are 3.49% - 12.99%^{2 for fixed rates and 1.19% - 11.98%2 for variable rates, depending on the borrower’s (and co-signer’s) credit profile. DACA students should be prepared to provide more documentation than the average applicant. You will typically need to submit:}

• A valid, unexpired Employment Authorization Document (EAD) card (category C33).
• Your Social Security Number.
• Proof of residence and income (for both you and your co-signer).

Because private loans do not carry the same legal protections as federal loans, it is vital to read the fine print regarding repayment terms. The Consumer Financial Protection Bureau (CFPB) advises all borrowers to confirm grace periods and forbearance policies before signing.

Compare rates from DACA-friendly lenders

State-based financial aid programs for DACA students

While federal aid is off limits, your state of residence might offer a significant lifeline. Over the past decade, a growing number of states have passed “tuition equity” laws. These laws often do two things: they allow DACA students to pay in-state tuition rates (which are significantly lower than out-of-state rates), and in some cases, they open up state-funded financial aid grants.

According to the Higher Ed Immigration Portal, as of January 2025, over 20 states and the District of Columbia offer in-state tuition to undocumented students. A smaller subset of these states also provides access to state financial aid. If you live in one of these “access states,” you should prioritize applying for this aid before taking out any private loans.

Source: Migration Policy Institute and State Higher Education Agencies (as of January 2025).

In these states, you do not file the FAFSA. Instead, you file the specific state alternative form listed above. These applications mirror the FAFSA in that they ask for family income and household size to determine financial need, but the data is processed by the state agency, not the federal government.

Common Pitfall: Deadlines for state aid are strict. For example, according to the California Student Aid Commission, the CADAA in California typically has a priority deadline of March 2nd (for the upcoming academic year). Missing this deadline can cost you thousands of dollars in grant money that you do not have to pay back.

If your state is not listed above, check with the Higher Ed Immigration Portal or your high school counselor. Policies change frequently, and new legislation may open up opportunities in states that previously restricted access.

Institutional scholarships and alternative funding

Beyond loans and state grants, “free money” in the form of scholarships is the most valuable resource for DACA students. Unlike loans, this money does not need to be repaid. Many colleges and private organizations have established funds specifically to support Dreamers.

Some private universities meet 100% of demonstrated financial need for all admitted students, regardless of citizenship status. These institutions often use the CSS Profile—a financial aid application administered by the College Board—rather than the FAFSA to determine eligibility. Notable examples of schools known for supporting undocumented students include Emory University, Tufts University, and Pomona College.

When researching colleges, search for “undocumented student support services” on their website. A dedicated office or contact person is a strong signal that the institution has funding mechanisms in place for DACA recipients.

There are several large-scale scholarship organizations dedicated exclusively to helping undocumented students afford college. Applying to these should be a top priority in your junior and senior years of high school.

• TheDream.US: The nation’s largest college access and success program for Dreamers. They offer scholarships that cover tuition and fees at partner colleges.
• Golden Door Scholars: Provides scholarships for high-performing DACA and undocumented students, often coupled with mentorship and career support.
• Hispanic Scholarship Fund (HSF): According to HSF, they offer awards ranging from $500 to $5,000 to DACA recipients based on merit and need.

For a broader look at how to find and win these awards, research scholarship opportunities through your school’s financial aid office and national scholarship databases.

At select institutions, Income Share Agreements (ISAs) are emerging as an alternative to private loans. With an ISA, the school funds your education, and in exchange, you agree to pay a fixed percentage of your future income for a set period after graduation. Since ISAs are often based on future potential rather than current credit history or citizenship, they can be a viable option for DACA students who lack a co-signer.

Building credit and improving loan eligibility

If you determine that private loans are necessary, your ability to get approved—and the interest rate you receive—depends heavily on credit history. For DACA students, building a U.S. credit profile is a powerful step toward financial autonomy.

While DACA recipients have Social Security Numbers, some undocumented students may only have an Individual Taxpayer Identification Number (ITIN). The good news is that you can build credit with either. The most effective way to start is by opening a secured credit card. With a secured card, you provide a cash deposit (e.g., $200) that serves as your credit limit. By making small purchases and paying the balance in full every month, you report positive payment history to the credit bureaus.

Building a credit score strong enough to qualify for a loan (or to help a co-signer get a better rate) takes time.

• 6-12 Months Before Applying: Open a secured card or become an authorized user on a parent’s credit card (if they have good credit).
• 3 Months Before Applying: Check your credit report for errors. According to the Consumer Financial Protection Bureau, ensure your utilization ratio (the amount of credit you use vs. your limit) is under 30%.

According to Sandy Baum, a fellow at the Urban Institute, “Borrowing is not inherently bad; the question is how much, and under what terms.” By building your credit score, you gain control over those terms, moving from predatory rates to competitive ones.

If you need a co-signer, have an honest conversation with them about the responsibility. Explain that you are building your own credit so you can eventually refinance the loan into your own name. Many private lenders offer “co-signer release” programs, which allow you to remove the co-signer from the loan after you have made a certain number of on-time payments (typically 12 to 36 months) and meet income requirements.

Creating your college funding strategy

Combining these different funding sources into a cohesive plan is the key to affordability. Do not rely on a single source; instead, use a “waterfall” approach where you exhaust the cheapest money first.

1. Institutional & Private Scholarships: This is your first priority. Apply for TheDream.US and school-specific grants. This money never needs to be repaid.
2. State-Based Aid: If you live in a state like CA, TX, or NY, complete the alternative financial aid application immediately when the window opens.
3. Income from Work: Use your DACA work authorization to secure part-time employment. Even earning $3,000 a year can cover books and personal expenses.
4. Private Student Loans: Use these only to fill the remaining gap. Compare at least three lenders to find the best rate.

Junior Year of High School:

Research colleges with “meet full need” policies for undocumented students. Start building credit using a secured card.

Fall of Senior Year:

Apply to colleges. Submit the CSS Profile if required. Apply for major national scholarships like Golden Door Scholars.

Spring of Senior Year:

Submit state financial aid applications (CADAA, TASFA, etc.). Review financial aid offer letters. If a gap remains, apply for private loans with a co-signer.

For help estimating your total funding needs, create a detailed budget that accounts for tuition, fees, room and board, books, and personal expenses. Having a clear number in mind helps you avoid over-borrowing.

Frequently asked questions

Yes. If your status changes to Permanent Resident (Green Card holder), you become eligible for federal aid immediately. You can file the FAFSA for the upcoming term. However, this eligibility is not retroactive; it applies only to future aid periods.

Not all, but most do. Lenders like MPOWER Financing and Funding U specialize in no-cosigner loans for international and DACA students, basing decisions on academic potential. However, major banks generally require a U.S. citizen or permanent resident co-signer to approve the loan.

Your private student loan is a private contract. Changes to federal DACA policy generally do not alter the terms of an existing loan. You are still responsible for repayment. However, if you lose work authorization, repayment becomes difficult, making it essential to have an emergency fund or co-signer support.

Yes, DACA recipients can refinance student loans, provided they meet the lender’s credit and income requirements. This is a great strategy after graduation if you have built a strong credit history and secured a steady job, as it can lower your interest rate.

Most states with tuition equity laws require you to submit an affidavit stating that you have filed (or will file) an application to legalize your immigration status as soon as you are eligible. You will also typically need high school transcripts showing 3+ years of attendance in that state.

While the path to funding college as a DACA recipient requires more navigation than it does for citizens, it is entirely achievable. The absence of federal loans is a hurdle, not a roadblock. By leveraging state aid, institutional support, and DACA-friendly private lenders, thousands of Dreamers fund their education every year.

Key takeaways:

• Start Early: Scholarship and state aid deadlines are strict. Begin your research in your junior year of high school.
• Layer Your Funding: Always exhaust scholarships and state grants before turning to private loans.
• Build Credit: Use your ability to get a credit card to build a financial track record that will help you secure better loan terms.

If you have exhausted your scholarship options and still have a funding gap, private loans can provide the necessary bridge to your degree. Modern lenders are increasingly recognizing the potential of DACA students.

Compare rates from DACA-friendly private lenders — checking rates won’t affect your credit

References and resources

Use these organizations and portals to find specific applications and legal support.

• TheDream.US: The largest college access program for Dreamers, offering scholarships and partner college connections.
• Immigrants Rising: Provides lists of scholarships, legal resources, and guides on entrepreneurship for undocumented individuals.
• United We Dream: The largest immigrant youth-led network in the country, offering advocacy and “Know Your Rights” resources.
• Higher Ed Immigration Portal: An interactive tool to check tuition and financial aid policies for DACA students in your specific state.
• Consumer Financial Protection Bureau (CFPB): Resources for understanding student loan contracts and credit reporting for non-citizens.