All About CA DREAM Loans

All About CA DREAM Loans

Background

The creation of the California Dream Loan was first introduced by then-Senator Lara back in 2014. Then in 2018, Assemblymember Ian Calderon introduced AB1895 and it was signed by the California governor. AB1895 provided repayment programs based on someone’s income for the loan. The latest piece of legislation signed by Governor Newson was SB354 by Senator Maria Elena Durazo which expanded the Dream Loan program to graduate students. 

How to apply and know you if are eligible

Students are eligible if they are enrolled at a CSU or a UC where the loan is currently being provided and they are enrolled as an AB540 student. Students may also be eligible if they file the California act application with the financial aid office and show that they are in financial need. Students need to keep in mind that the loan is provided on a main campus basis so they have to make sure to talk to their campus because it is not administered by anyone else.

Important details about California Dream Loans 

  • The interest rate that you agree upon in your contract can not change, it is a fixed interest rate and the interest rates are the same as federal student loans.
  • Just like federal student loans, you have a six-month grace period before you have to pay it back.
  • There is an income-based payment program that schools have come up with. This is based on what you are making as someone who has entered their career and are you eligible to repay this program.

 To learn more about CA Dream Loans click the video below! 

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All About Cal Grants and Other CA Financial Aid

Paying for college can be challenging, but as a Californian student, you have several state-based financial aid programs available to help ease the burden. Remember that you will either need to submit the FAFSA or the California Dream Act application by March 2 in order to be considered for most types of financial aid. See our post, “Financial Aid 101”, to learn more about the process of applying for financial aid. Read on to find out more information about the Cal Grant, Middle Class Scholarship, Chafee Grant, and other financial aid opportunities in California. 

Cal Grant

Perhaps the most well-known financial aid program in California is the Cal Grant. The Cal Grant is a state-sponsored grant program available to eligible California students who attend participating colleges, universities, and technical schools in California. Some key facts about the Cal Grant program are:

  • The Cal Grant is gift aid and you do not need to pay it back
  • You need to meet certain financial, academic, and general requirements in order to be eligible for one of the Cal Grant awards
  • There are several types of Cal Grant awards, based on factors like when you are applying for financial aid, what type of college or institution you attend, and your income level. The following provides brief descriptions of the types of Cal Grant awards:
    • Cal Grant A or B High School Entitlement: For eligible current high school seniors and recent high school graduates
    • Cal Grant A or B Transfer Entitlement: For eligible students who plan to transfer directly from a California Community College to a participating four-year college or university
    • Competitive Cal Grant A or B: For eligible students who are not applying as a high school senior, within one year of high school graduation, or upon transfer from a California Community College to a four-year college or university
    • Cal Grant C: For eligible students who are pursuing an occupational or technical program
  • You do not need to figure out which Cal Grant you may qualify for on your own – you are automatically considered for the correct award based on the information you provide when applying.
  • The award amounts for the Cal Grant program depend on which award you have received and the type of institution you attend

Your FAFSA or California Dream Act application serves as your application for the Cal Grant program. Once you have submitted the appropriate financial aid application, you will need to create a WebGrants 4 Students account to access the next steps and secure your Cal Grant, if awarded. For more information about Webgrants, see our post, “After the FAFSA/Dream Act: Next Steps”.

Keep in mind that students who are current or former foster youth, and students who have dependents, may be eligible for additional funds or increased Cal Grant eligibility. 

Important Links and Resources:

  • Read detailed information about the different types of Cal Grant awards and their eligibility requirements here
  • Check out the various Cal Grant award amounts by institution type and award type here
  • Check out the 2021-2022 Cal Grant Program Income Ceiling chart here
  • Create your Webgrants 4 Students account here
  • Learn more about the Cal Grant B Foster Youth Award here
  • Learn more about Cal Grant awards for students with dependents here

Middle Class Scholarship

If you are not eligible for the Cal Grant program but still meet certain financial and general requirements, you may be eligible for something called the Middle Class Scholarship (MCS). Unlike the Cal Grant, the Middle Class Scholarship is only available to eligible students at public, four-year universities in California. Some key facts about the MCS are:

  • In order to be eligible, your family may have an annual income of up to $184,000 and hold up to $184,000 in assets
  • The Middle Class Scholarship is gift aid and does not need to be repaid
  • Award amounts for the MCS are sliding scale and may vary by student and institution. This means that you may receive a MCS at one college you have been accepted to but not another
  • Students who are eligible can receive an award amount between 10% and 40% of the mandatory system-wide tuition and fees at a University of California or California State University campus
    • At a CSU, awards can range between $574 – $2,298
    • At a UC, awards can range between $1,257 – $5,028

Like the Cal Grant, your FAFSA or California Dream Act Application serves as your application for the Middle Class Scholarship. Once you have submitted the appropriate financial aid application, you will need to create a WebGrants 4 Students account to manage your award. You will be notified if you have been awarded a Middle Class Scholarship by August.

Important Links and Resources:

  • Read the top 10 things to know about the Middle Class Scholarship here

Chafee Grant

In addition to the Cal Grant or Middle Class Scholarship, current or former foster youth who meet certain criteria may also be eligible for another financial aid program in California called the Chafee Grant. If you have been in foster care for at least one day between the ages of 16 and 18, as a dependent or ward of the court, you qualify for this award. If eligible, you can receive up to $5,000 per year (that does not need to be repaid) for five years as long as you attend a qualifying institution in or outside of California. 

You will first need to submit a FAFSA or California Dream Act application to be considered for the Chafee grant. If a first-time applicant, you will also need to complete an additional form called the California Chafee Grant application, which you can access through their Webgrants 4 Students account. If the California Department of Social Services is unable to verify your foster status, you will need to complete an additional form to certify your eligibility.

Important Links and Resources:

  • Find detailed information about eligibility, the application process, and more for the Chafee Grant here
  • To learn about your rights as a California foster youth as well as resources available to you, visit the California Office of the Foster Care Ombudsperson here

California College Promise Grant

For California residents who attend a California Community College and meet certain financial and general eligibility requirements, there is another financial aid program available called the California College Promise Grant (CCPG). This grant waives all enrollment fees for eligible students and does not need to be repaid. It is important to keep in mind that the CCPG waives the $46/unit enrollment fee for any number of units you enroll in, but does not cover additional student fees or books and supplies – you will need to cover these costs through the use of other financial aid or out of pocket. 

There are several ways to qualify for the California College Promise Grant, for instance by meeting the income requirements, providing proof of receiving certain federal or state benefits or showing a certain level of financial need. The easiest way for you to determine your eligibility is by completing the FAFSA or the California Dream Act Application, and submitting the California College Promise Grant Application for the specific community college you attend. The financial aid office will follow up to confirm eligibility and potentially request additional documents as proof. 

Important Links and Resources:

  • For a complete list of links to the California Community Colleges that offer online CCPG applications via CCCApply, click here
  • To learn more about the financial aid and opportunities available at the California Community Colleges, check out the website icanaffordcollege.com 

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After the FAFSA/Dream Act: Next Steps

Check Your Student Aid Report (SAR)

After you submit your FAFSA or Dream Act there are some additional steps that you should be aware of. For students who complete the FAFSA, there is something called a Student Aid Report (SAR) which is a summary of all information reported on the FAFSA. This summary is usually available to view a few days after you submit the FAFSA. It provides important information about potential issues with your FAFSA such as a mismatch between what you reported on the FAFSA and what the Social Security Administration has on file for your name and social security number. Any issues such as these need to be addressed as soon as possible- otherwise, it could create a delay in receiving your financial aid.  

For students who complete the Dream Act, there is a very similar document called the Cal Student Aid Report (Cal SAR) which is a summary of all information reported on the Dream Act, available a few days after you submit your application. The Cal SAR also provides important information about potential issues with your Dream Act application. You should address any such issues as soon as possible to avoid delays in the financial aid process.

The SAR and Cal SAR also will include your official Expected Family Contribution (EFC). The EFC  is determined by the information entered into the FAFSA or Dream Act such as family income, household size, and number in college. The EFC is an important index number that is used by colleges to determine what type of and how much financial aid you can receive based upon your need. The higher the EFC, the lower the need, and the lower the EFC, the higher the need. The EFC is not the exact amount you will have to pay for college, but instead, it can be thought of as the minimum amount you and your family will need to pay. Colleges will receive your EFC and use it to determine the student’s eligibility for financial aid.

Important links and resources:

  • A helpful video about how to retrieve and download a Student Aid Report can be found here. 

 

You Might Be Selected for Verification

Another step that you should be aware of is something called verification. Verification is a process in which the federal government and colleges can request copies of specific documents to confirm the accuracy of the information reported on financial aid forms. Some students are randomly selected for verification while others are selected due to conflicting information that the colleges are seeing on the financial aid forms. 

Examples of documents required for verification can include any of the following if applicable:

  • Official tax transcripts or tax returns
  • Proof of citizenship/residency
  • Documentation of legal guardianship

This process must be completed in a timely manner! If you receive a verification request from a college you need to respond as quickly as you can so you do not miss out on potential financial aid that is first-come, first-served. Note that these verification requests may come through email, the school portal, and/or the regular postal mail.

Institutional Documentation Service – CSS Profile Submissions Only

For students required to complete the CSS Profile, there is a follow-up step that is similar to verification which is called Institutional Documentation Service (IDOC). If required, this process will also require you to submit additional documentation. 

Important Links and Resources:

  • Watch a helpful video that shows how to request a tax transcript via IRS.GOV to be mailed home here.
  • To find out you are required to complete IDOC, check out this website.
  • Created by the College Board, this is a series of slides and videos that reviews the IDOC process that can be found here

Create a WebGrants 4 Students Account

California students also need to be aware of the steps to take to secure their Cal Grant, Middle-Class Scholarship (MCS), or Chafee Grant, if awarded. For general information about these financial aid programs, see our post “All About Cal Grants and Other CA Financial Aid”. After you submit your FAFSA or Dream Act, you will need to create a WebGrants 4 Students (WG4S) account. This is the online portal that allows you to track the status of your state financial aid, complete required To-Do items and manage their award, and review your state financial aid history and remaining eligibility.

It is crucial that students complete your required steps by the appropriate deadlines, such as:

  • Confirm your intended school of attendance or make a school change
  • Certify your high school graduation date, for current high school seniors
  • Complete the Transfer Entitlement Certification, for community college transfer students
  • Complete the Cal Grant C Supplement, if being considered for Cal Grant C

Keep in mind that the timelines for you to complete these steps may vary depending on if you are a first-time applicant or renewing your award, as well as what type of award you are being considered for. You should keep track of their deadlines to ensure that you do not miss out on any state financial aid you may be eligible for. Once you have completed all of the requirements on your WG4S account, your intended college will be able to confirm their eligibility and move forward with issuing payment of their award. 

Important Links and Resources:

  • Watch a help video created by the California Student Aid Commission about how to create your WebGrants 4 Students account here

Check out a detailed description of how to complete certain steps on WG4S here.

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Verifying Your Income for the CA Dream Act Application

After submitting the CA Dream Act Application, you may be asked to verify the information you provided about your income. Don’t worry, you did not do anything wrong if you are selected; a percentage of all applicants are required to verify income as general practice. If you happen to be selected, follow the steps below!

  1. Know if you have you have to verify your income

Not all CA Dream Act applicants are required to verify their income. You will know if you must verify your income via email or schools’ online portals. If you do not receive any notification about verifying income, then you do not need to take additional steps at the moment.

2. Know if you are Dependent or Independent Student

You are Dependent if you are all of the following:

  • under 24 years old or born after 1/1/98,
  • not legally married (single),
  • have no children or other dependents, 
  • and are pursuing an undergraduate degree.

If you are Dependent then you MUST provide information on BOTH your income and your parents’ income. Even if you do not live with your parents or receive their financial support, you must provide their information. Some exceptions on this may apply depending on school. 

You are Independent if you are at least one of the following:

  • over 24 years old or born before 1/1/98,
  • legally married, 
  • have children or other dependents for whom you provide 50% of their support, 
  • a veteran or active duty, 
  • an orphan or ward of the court, 
  • at risk of homelessness,
  • have a special circumstance, 
  • or pursuing a graduate degree.

If you are Independent, then you will only provide income information about yourself.

3. Know if you and/or your parents are Tax Filers

If you and/or your parents file taxes, be prepared to obtain the 2019 tax return transcript (note: this is different from the tax account transcript). You may request the tax return transcript from the Internal Revenue Service (IRS) for free online or through the phone. The person requesting the transcript must be the one who signed the taxes; someone else is not allowed.

If you and/or your parents do not file taxes, prepare the following information/documents:

  • all 2019 household income earned,
  • financial assistance or benefits (if received),
  • a copy of W-2 form(s). 

Be aware that if you or your parents earned over the IRS income filing limits, you may be required to file taxes in order to receive a financial aid award.

If you and/or your parents do not file taxes because of cash payment and do not have a W-2 form, you must explain the circumstances in the school verification worksheet. You may be required to include proof of non-filing from the IRS.

4. Fill our the Income Verification Worksheet

After you have determined where you stand with dependent/independent status and tax filing status, you will fill out the Income Verification Worksheet. A standard worksheet asks about/for the following:

  • Household Size: The rules of the CA Dream Application define households as you (the student); the biological or adoptive parents; siblings under the age of 24 in most cases; and/or other dependents for whom the parents are financially responsible (such as an elderly or disabled person). Additional family members or individuals that live within the home, but do not meet these requirements should not be included in the household.
  • Marital Status: Indicate whether the parent or you are single, married, separated or divorced, or widowed. Parents who are living together, but are not married should choose that option.
  • Tax Filing Status: Indicate whether you and/or parent or spouse is a tax filer or a non-tax filer.
  • Financial Aid Received: List the amount of grants or scholarships you received during 2020 and the school(s) attended.
  • Child Support Paid: List the amount of any child support paid in 2020, including the child’s name, the name of the person who paid child support, and the name of the person to whom it was paid.
  • SNAP Benefits Received: Indicate whether you and/or your parents received SNAP  benefits in 2020 or 2021. Documentation from the agency that issued SNAP benefits may be required upon request.
  • Certification and Signature: By signing the verification worksheet, you and/or your parent certify that all the information is true. Signing also authorizes the Financial Aid Office to update the student’s California Dream Application per CSAC guidelines and the information provided.
  • Additional Documentation: An individual college or university has the right to ask for additional documentation regarding household size or income earned if it is necessary to gain an adequate understanding of how household expenses were met for 2020.
  • Multiple Schools: If you listed more than one school on the CA Dream Application, you will be required to complete income verification at each school individually.

It is natural to feel overwhelmed by this process! Remember that this is standard procedure for a certain percentage of students who apply for the Dream Act. Do not be discouraged. We, and many others, are here to support you through the process!

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Mixed status households: how to apply for in-state tuition & financial aid in CA

For a student who is a citizen or legal permanent resident but whose parents are undocumented, you must follow specific steps to ensure you will be considered for federal aid through FAFSA. 

  1. Paying Resident Fees at a CCC, CSU, or UC Submitting the FAFSA Application
      • When students are financially dependent on their parent(s), Residency for Tuition Purposes in CCCs, CSUs, and UCs can be based on the residency of the parents when the student is under a specific age
      • However, students who are citizens, legal permanent residents, or eligible non-citizens but whose parents are undocumented should be classified as residents in most instances if their parents meet all other residency requirements for tuition purposes. Keep in mind that this is a complicated process and not all students are accurately classified. 
      • If you are classified as a non-resident but believe that you meet the residency requirements for tuition purposes in CA, contact the residency officer at your campus. If you are unable to resolve it at that level, contact the Chancellor’s Office of the CCC, CSU, or the President’s Office of the UC regarding their policy on residency for students who are U.S. citizens with undocumented parents. 
      • If you cannot be classified as a resident, check to see if you meet the eligibility for AB 540/SB 68 and submit the nonresident tuition exemption form (AB 540 affidavit), along with any required proof (transcripts).
      • Being classified as a resident for tuition purposes or AB 540/SB 69 student is key to paying resident fees and being able to receive state-based financial aid. 
  2. Submitting the FAFSA Application
      • Students who are citizens, legal permanent residents, or eligible non-citizens, but whose parent(s) is/ are undocumented are eligible to submit the FAFSA application and receive federal financial aid. 
      • Students should apply at fafsa.ed.gov but should pay attention to these specific details if their parents are undocumented:
        • Students should obtain their own FSA ID
        • Parent(s) should include their information, if required
        • Parents should be sure to use 000’s for the Social Security Number (SSN) if they do not have a valid SSN. They should not use an Individual Tax Identification Number (ITIN). The application will request confirmation if you use zeros. Say yes.
        • Students should sign the FAFSA with their FSA ID and parents should “Print signature page” to sign the FAFSA because they cannot obtain an FSA ID
        • Students should save one copy of the signature page and mail the other to FAFSA. It can take up to six weeks to process, so be sure to send it early!
        • Students should check on www.fafsa.ed.gov to confirm that the parents signature has been received. The student’s FAFSA application cannot be processed until the parents signature is successfully added.
  3. Receiving Federal and State Financial Aid at a CCC, CSU, or UC
      • Students who filled out the FAFSA but were admitted as non-residents usually do not see CA state financial aid in their original financial aid award–only federal financial aid. Once approval of their residency classification or AB 540 status is approved, students must contact the Financial Aid department to ensure that all state financial aid for which they are eligible is added to their financial aid award. 

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