The following information is for faculty and staff who advise AB 540 students. It is not meant as the definitive word on the policies and procedures of the California Dream Acts. Institutions most likely will issue their own statements. All advisors are encouraged to read all of the documentation at the California Student Aid Commission web site: www.csac.ca.gov/default.asp. However, because many AB 540 students are already asking Allies questions about AB 130 and AB 131, this information will give you some direction in advising undocumented students. The Financial Aid Office and the Scholarship Center are also sources to seek out for the current information. Community groups are also hosting Dream Acts Application workshops..
The California Dream Act is the name of laws created by two bills authored by Assemblymember Gil Cedillo, passed by the California Legislature and signed into law by the Governor Jerry Brown in 2011. The California Student Aid Commission was directed to develop an application form for AB 540 students to apply for state financial aid. Completion of this form is required to determine eligibility for state financial aid for AB 540 eligible students. The application will be processed by the California Student Aid Commission (CSAC).
The Dream Application is an application for state aid. It can be found on line at www.csac.ca.gov/. It is NOT an application for federal financial aid. Students eligible to file the Free Application for Federal Student Aid (FAFSA) must use that application to maximize their opportunities to receive state and federal student financial aid. The FAFSA application is on line at www.fafsa.ed.gov/. Undocumented AB 540 must NOT complete the FAFSA because they are not eligible for federal financial aid. Filing a FAFSA can be considered by Homeland Security’s Bureau of Customs and Immigration Services (BCIS) as an application for a public benefit for which an undocumented student is not eligible. Penalties can be severe, including jail and deportation.
AB 540, authored by Assemblymember Marco Firebaugh, passed in 2001 to allow undocumented, non-resident students in California to be exempt from paying out of state tuition and fees at public colleges and universities if they qualify as AB 540 students. Briefly to be eligible as an AB 540 student, one must have attended a California high school for three years or more full academic years, graduated from a California high school or attained a GED or received a passing mark on the California High School Proficiency Exam (CHSPE); be registered or currently enrolled at an accredited institution of higher education; Must file an affidavit stating that the filer will apply for legal residency as soon as possible; and not hold a valid non-immigrant visa.
There are two types of grants available as Cal Grants. There are the entitlement grants and the competitive grants. Each has its own requirements. Under entitlement grants, eligible student are guaranteed a Cal Grant A if they have at least a 3.0 grade point average and apply by March 2 either of the year they graduate from high school or the following year. The Cal Grant A guarantee provides for tuition and fees at the California State University, the University of California and tuition support at participating independent colleges and universities and career colleges. If a student receives a Cal Grant A but attends a California Community College first, his or her award will be reserved for up to three years until the student transfers to a four year college, if they continue to qualify. These students must notify their transfer school that they have a reserve grant. High school seniors and community college transfer students are targeted group for Cal Grants, however all other undocumented students are encouraged to apply as there are other state support programs for which the students may be eligible.
Cal Grant A and B Competitive Awards are available for students who do not qualify for the entitlement grants. The competitive grants are not guaranteed. Each year 22,500 competitive grants are awarded. Half of the grants are awarded to eligible students that apply by March 2. The remaining half is set aside for California Community College students who meet the September 2 deadline. For a complete description, go to the www.csac.ca.gov/ page.
There is a third Cal Grant for Technical and Vocational Students. Cal Grant C awards assist with tuition and training costs for occupational, technical, and vocational programs. The award includes up to $576 for books, tools and equipment — and up to $2,592 more for tuition and fees if the student will be attending a school other than a California Community College (community colleges don’t charge tuition and fees will be waived as a Cal Grant recipient). Funding is available for up to two years, depending on the length of the program. To qualify, one must enroll in an occupational, technical, or vocational program that is at least four months long at a California Community College, an independent college, or a vocational/career school. Even though a GPA is not required to apply for a Cal Grant C, students are still encouraged to submit that information because it can only help their chances of receiving an award.
Signed into law on July 25, 2011 AB 130 became effective January 1, 2012. AB 130 allowed AB 540 students to be eligible for colleges and universities privately funded scholarships. AB 130 is the first of the California Dream Act. This message may enable you to answer some of student inquiries with some certainty about the bill and its implications. Students must also be advised that the scholarship and financial aid offices on campuses may issue their own statements about their procedures.
Although regulations have not yet been written, the bill is clear in its intent. Attached is a copy of the bill. Advising AB 540 students about their eligibility for AB 130 requires that they also be advised about their federal and state income tax obligations. The message is that at CSULB all privately funded scholarships offered by the university are open to AB 540 students. The only scholarships that are not available to AB 540 students are those where a donor has specified the eligibility requirements.
AB 540 students that receive scholarships must file federal and state income taxes. Only the cost of the tuition fee, books and required equipment for students pursuing a degree are tax exempt. Filing is the student’s responsibility and is the prudent thing to do, so that the student establishes a record as a lawful taxpayer. Normally tax withholding will be not be made at the time the scholarship is given, so the student should reserve funds to pay for the required taxes, which may be in the range as high as 28 percent.
AB 540 students are taxed and report the same as US citizens. However, unlike US citizens that report with a social security number (SSN), AB 540 students report using an Individual Tax Payer Identification Number (ITIN). Students that do not have an ITIN should obtain one as soon as they get their first scholarship letter. The letter is the justification that they need to obtain the ITIN to report and pay taxes. Currently there is no one at CSULB who can facilitate the process of obtaining the ITIN, but that situation will likely change during the summer. A list of Long Beach area providers is enclosed however; advisors should call before sending students to these places of business to confirm that they are still in business.
Finally, the scholarship provider will ask the student to complete the W9s form for the provider’s records. The W9s form does not go to the IRS, but stays with the scholarship provider for their reports. To find the form on the IRS website, type in W-9S.
AB 131 was signed into law on October 8, 2011 and becomes effective on January 1, 2013. This new law allows students who meet the AB 540 criteria to apply for and receive institutional grants, like the State University Grant, Educational Opportunity Program and Services fee waivers and the University of California Grants. California Community College students can apply for and receive Board of Governors fee waivers. AB 540 eligible students can also apply for and receive state financial aid, including Cal Grants and Chafee Foster Youth Grants for use at eligible public and private institutions. Advisors should inform students that their respective campuses may file campus specific procedures. The following information should be used to advise students that inquire about AB 131.
To qualify for California financial aid through AB 131, non-resident, including undocumented students must:
Beginning January through March 2, 2012, graduating seniors eligible for AB 540 can apply for a Cal Grant for use beginning fall of 2013.
Cal Grant A is available as a high school entitlement and a California Community College entitlement for those that qualify:
Cal Grant B is available as a high school entitlement and a California Community College Transfer entitlement for those that qualify.
Currently, an unlimited number of awards
