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The AB 540 Advisors’ Guide to the California Dream Acts of 20111

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.

Cal Grant Primer

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.

Part One: AB 130

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 130 at a Glance

  • Signed into law on July 25, 2011.
  • Became effective January 1, 2012.
  • Allows students that meet AB 540 criteria to apply for and receive private scholarships administered by California public colleges and universities, including scholarships funded through private donors, alumni contributions, and individual departmental efforts.
  • AB 540 students must contact their college or university financial aid office or scholarship office for information on how and when to apply.

Part Two: AB 131

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:

  • Have attended a California high school for three or more full academic years between grades 9 through 12. They do not need to be consecutive years.
  • Have or will graduate from a California high school or have attained a GED; or received a passing mark on the California High School Proficiency Exam (CHSPE);
  • Registered or be currently enrolled at an accredited institution of higher education in California.
  • Not hold a valid non-immigrant visa (F, J, H, L, A, B, E, etc.);
  • Demonstrate financial need and meet all other program requirements.
  • In addition, undocumented students must file an affidavit as required by the individual institutions that the filer will apply for legal residency as soon as possible.

High School Seniors Eligible For AB 540

  • Beginning April 2, 2012, for the term of 2013 high school seniors can complete the 2012-13 California Dream Application. This California Student Aid Commission form collects income information that campuses can use to administer institutional aid.
  • Students should contact the contact the financial aid office if they have questions.

Beginning January through March 2, 2012, graduating seniors eligible for AB 540 can apply for a Cal Grant for use beginning fall of 2013.

Current AB 540 College Students

  • During the spring and summer of 2012 students can prepare to file for state aid for the Spring term of 2013.
  • Current AB 540 college and university students can complete the 2012-13 California Dream Application at www.csac.ca.gov/dream_act.asp. This California State Student Aid Commission (CSAC) form collects income information that campuses use to administer institutional aid. Students need to follow up with their respective financial aid offices about available aid.

January to March 2, 2013

  • Community college students planning to transfer to a qualifying four-year institution can apply for a Cal Grant.
  • College students enrolled or planning to enroll in a career technical program can apply for a Cal Grant.
  • All other current AB 540 college students are not eligible for Dream Act Cal Grants, but they may still be eligible for other Dream Act aid and should visit their respective financial aid office.

General Cal Grant Eligibility Requirements

  • Be a California resident or meet AB 540 requirements
  • Be a US citizen, eligible non-citizen or meet AB 540 requirements
  • Meet Selective Service requirements
  • Attend an eligible California school
  • Not be in default on a Federal student loan
  • Not have earned a BA or BS degree
  • Maintain satisfactory Academic Progress
  • Not be incarcerated
  • Be enrolled at least half time

Types of Cal Grants for which Dream Act Students May Qualify

Cal Grant A is available as a high school entitlement and a California Community College entitlement for those that qualify:

  • Low to middle income students (average family income of new Cal Grant A recipients is $44,100)
  • Associate and Bachelor degree programs only
  • Can be used for tuition and fees only
  • Maximum annual award amount:
    • CCC – not paid, but held in reserve until transfer
    • CSU – up to $5,472
    • UC – up to $12,192
    • Independent or private for profit – up to $9,708
    • Current policy provides that Cal Grant awards are increased to meet fee increases at the public universities

High School Entitlement Cal A

  • Students applying in their senior year of high school or in the year after they graduate or
  • Students applying within one year of passing the GED
  • Uses high school grade point average (GPA) only (minimum 3.00)

California Community College (CCC) Transfer Entitlement Cal A

  • Students transferring from a CCC into a bachelor’s degree program
  • Must have graduated from a California high school after 7/1/00 and not yet be age 28
  • Uses CCC GPA only (minimum 2.40)

Currently an unlimited number of awards

Cal Grant B is available as a high school entitlement and a California Community College Transfer entitlement for those that qualify.

  • Very low income students (average family income of new Cal Grant B recipients is $17,200)
  • AA, BA and Certificate programs of at least one year
  • Can be used for any school expenses including tuition and fees, except that first time freshmen are not eligible for tuition and fee component of award
    • All Cal Grant B recipients, at all schools get a $1,551 “Access” payment each academic year
    • Students beyond their first year also get a tuition benefit equal to the Cal Grant A tuition and fee amount if attending a school other than a community college

High School Entitlement Cal B

  • Student applying in their senior year of high school or in the year after they graduate or
  • Student applying within one year of passing the GED
  • Uses high school GPA only (minimum 2.00)

California Community College Transfer Entitlement Cal B

  • Student transferring from a CCC into a bachelor’s degree program
  • Must have graduated from a California high school after 7/1/00 and not yet be age 28
  • Uses CCC GPA only (minimum 2.40)

Currently, an unlimited number of awards

Cal Grant C

  • Low income students (average family income of new Cal Grant C recipients is $18,700)
  • Can be used for tuition, fees, books and supplies
  • AA and certificate career technical programs only
  • Maximum annual award amounts:
    • Tuition and fees - $2,592
      • At private vocational schools
    • Books and supplies - $576
      • At private vocation schools and
      • Community colleges
  • Scored based on occupational factors and educational history
  • $7,761 award per year

The Application

California Dream Application or FAFSA (establishes financial need)

  • California Dream application submitted online at the California Student Aid Commission’s website: www.csac.ca.gov (starting April 2, 2012 for 2013 Spring term and January 1 for 2013-14 school terms)
  • All Dream Applicant students eligible to file a FAFSA will be redirected to www.fafsa.edu.gov
  • Grade Point Average Verification (establishes merit)

    • Submitted by school to the California Student Aid Commission electronically or
    • Submitted by student via mail (Cal Grant Verification Form to be available through the California Dream Application)

    Transfer Entitlement Verification Form

    • California Student Aid Commission will send this form to all students that meet Transfer Entitlement requirements

    Cal Grant C Supplemental Form

    • California Student Aid Commission will send the form to all students that meet the Cal Grant C requirements

    1Material largely taken from a presentation by the California Student Aid Commission, February 21, 2012