Calderon Bill Creating Income Based Repayment for DREAM Loans Passes Higher Education Committee

Tuesday, March 13, 2018

SACRAMENTO, CA – Assembly Bill 1895, a measure authored by Majority Leader Ian Calderon that would require UC and CSU campuses to create income based repayment (IBR) plans for DREAM loans, passed the Assembly Higher Education Committee today.

“The lack of flexibility in repayment is problematic for students who take out DREAM loans,” stated Majority Leader Calderon. “By creating an income based repayment plan, students who are undocumented and receive DREAM Loans will have the same opportunity as their documented peers to feel secure taking out loans, afford their loans upon graduation, and most importantly, pursue the American Dream.”

In 2014, Governor Brown signed the DREAM Loan Program, which extends loans to students who are undocumented and have financial need. Participating students can apply for $4,000 a year and up to $20,000 over a lifetime to fill gaps in educational funding left by their ineligibility for federal loans. All UC’s and most CSU campuses participate in the DREAM Loan Program.

Under current law, repayment terms for DREAM Loans are limited to standard repayment plans. Under a standard repayment plan, students make equal payments over a ten year period regardless of ability to pay.

Since President Trump’s election in 2016, the future of DACA has been threatened through executive order and lack of action from Congress. Students who risk taking out DREAM loans face the uncertainty of repayment if they cannot be lawfully employed in the United States. Additionally, Latino students, who are the primary recipients of DREAM Loans, experience wage discrimination. College-educated black and Hispanic men earn roughly 80% the hourly wages of white college educated men. This wage disparity makes it even harder to make payments on a standard repayment plan.

AB 1895 would require that participating UC and CSU campuses create procedures for income based repayment plans for DREAM Loans. Under an income based repayment (IBR) plan, students make payments based on their ability to pay.

AB 1895 is supported by the Campaign for College Opportunity and California Immigrant Policy Center.

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Contact: Lerna Shirinian, (562) 692-5858