Undocumented College Students, Taxation, and Financial Aid: A Technical Note

Abstract

A surprising amount of litigation and legislation has erupted over undocumented college students. Victims at the federal level are the DREAM Act and immigration reform. Financial aid raises technical issues for undocumented college applicants and for the citizen children of undocumented parents. Generally, the undocumented are ineligible for federal financial aid and nearly always for state aid. Even citizen college applicants face technical and administrative problems in negotiating the complex financial aid application process. The undocumented are trapped by imprecise definitions and applications of immigration categories among financial aid regulation, statutory immigration terms, and Internal Revenue Code provisions.

State and institutional policies on in-state resident tuition and financial aid for undocumented students: Examining constraints and opportunities

“…These students seldom have the necessary social and financial capital and overall support and guidance that can help them access and succeed in college (Baum & Flores, 2011;Teranishi et al, 2015). Limited access to state and federal financial aid coupled with the socioeconomic concerns, undocumented status, and high tuition prices cited above, leave many undocumented students without fruitful alternatives (Chin & Juhn, 2010;Olivas, 2009a). Additionally, studies have shown that the losses that arise as a result of bans on in-state tuition benefits are not limited to these students or their families.…”

“…In addition, since undocumented students are considered non-residents, once the number of nonresident students exceed 10% of the State University System student population, undocumented students may be required to pay the higher non-resident tuition rate (NCSL, 2014b). While limited, both of these examples seemingly provide evidence that the issue of undocumented students' access to higher education is slowly coming to occupy a central place in public policy discussions (Dougherty et al, 2010), especially because, as pointed out by Olivas (2009a), "both advocates and opponents have targeted this issue as an important line in the sand" (p. 413). This notion is supported by evidence from the NILC (2014b) which indicates that, as of late 2014, at least 19 states were considering legislation related to either augmenting existing laws or adding new ones regarding undocumented student access and in-state tuition benefits including, for example, Connecticut (S.B.…”

“…Federal financial aid, known as Title IV aid, is not available to undocumented students (Federal Student Aid, 2014;Flores, 2010;Olivas, 2009a). This is because of technical and legal issues.…”

“…On a related note, individuals who have been granted Deferred Action for Childhood Arrivals (DACA) status are also unable to qualify for Title IV aid. However, many undocumented individuals nonetheless, pay taxes using a Taxpayer Identification Number (TIN) and thus contribute to the nation's economic and tax system while being unable to benefit from federal aid (Olivas, 2009a).…”

“…Instead, undocumented students must rely upon piece-meal policies adopted state-by-state or institution-by-institution to determine whether they can access higher education, pay affordable tuition rates, or obtain state level financial aid (Cohen, 2014;Nguyen & Serna, 2014). This approach to financing access for undocumented students further exacerbates the difficulties that exist for undocumented students who are contributors to their communities and the tax system, as a whole (Olivas, 2009a). Undocumented students have fewer resources, less institutional knowledge, and fewer support networks (Baum & Flores, 2011).…”