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Loans for  DACA students

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Financing a college or graduate degree in the United States can be challenging for many young people. If you’re eligible for the Deferred Action for Childhood Arrivals (DACA) program, you’ll likely face additional hurdles when looking for financial aid and loans. This brief overview explores the challenges you and other students may face and the types of loans for DACA students that may be most helpful in finding your education.

Challenges of  loans for DACA students

Financial aid is essential for most international students because of the high cost of tuition in the U.S. Tuition can range from several thousand dollars per year at community colleges to tens of thousands at universities, not including additional expenses like housing, books and fees. When combined, these costs can easily add up to US$70,000 each year or more, depending on the school you choose.

As a DACA student, you won’t be eligible for student aid offered by the U.S. federal government, which unfortunately limits your access to certain grants, scholarships and low-interest loans. These funding sources are restricted to U.S. citizens and certain eligible non-citizens, but DACA recipients are excluded from programs like Pell Grants, federal work-study and Direct Subsidized and Unsubsidized Loans. To fund your education, you’ll need to look for alternative sources, which can be more expensive and harder to obtain.

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Options for financial aid and loans for DACA students

Despite these challenges, there are options available to help you finance your education.

  • State financial aid: Some states offer financial aid programs specifically for DACA students. For example, California, Connecticut, Hawaii, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Texas and Washington have all offered state financial aid to DACA students in the past. Researching the programs available in your state is the best place to start when looking for loans and financial aid.
  • Scholarships: Various organizations offer scholarships specifically for DACA students. Applying for these scholarships can help reduce the amount you need to borrow, but the competition for scholarships can be high.
  • Private lenders: Private education loan lenders are banks or companies that offer loans, and some of these are available to or tailored specifically for DACA students. You’ll find there are two basic types of private loans: loans that require a cosigner and loans that don’t. A cosigner is a U.S. citizen or permanent resident with strong credit and the financial ability to pay back your loan if you cannot. Requiring a cosigner reduces the risk for the lender, but it makes the application more difficult for DACA students who may not have friends or family willing to take on this responsibility. That’s why no-cosigner loans may be one of the most helpful options for DACA students.

No-cosigner student loans for DACA students

No-cosigner student loans are loans that do not require you to have someone else sign the loan with you. Typically, lenders consider an applicant’s credit history and financial status when deciding whether to make a loan. As a DACA student, you may not have a long credit history or the kind of property or assets to offer as collateral. With a no-cosigner loan, the lender bases its lending decisions on things like your academic performance and your future earning potential rather than your credit history or a cosigner’s guarantee.

No-cosigner private student loans for DACA students offer several benefits.

  • Freedom from financial entanglements. With a no-cosigner student loan, you won’t have financial obligations to a friend or family member as a cosigner. You’ll be solely responsible for managing and repaying your loan.
  • Broad coverage for educational expenses. No-cosigner loans for DACA students will typically cover all the expenses related to your education in the U.S., including tuition, fees, housing, meal plans, books, transportation and other ancillary expenses.
  • A boost in your credit score. By taking a student loan and making regular, on time payments, you can build your credit history, taking the first steps in building a stronger financial future.
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Loans for DACA students  from MPOWER Financing

MPOWER Financing is an education loan company that specializes in helping international and DACA students overcome the financial barriers to education. MPOWER offers no-cosigner student loans from US$2,001 to US$100,000, with competitive fixed interest rates and an easy application process, fast approval decisions and no prepayment penalties. That’s why NerdWallet recognized MPOWER as the Best Student Loan for International and DACA students in 2024.

When you become an MPOWER student, you can also take advantage of additional services and offerings such as career assistance and a resume builder. Additionally, DACA students are eligible for a number of international scholarship opportunities offered by MPOWER.

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FAQs

What types of loans are available for DACA students?

DACA students can apply for private student loans, certain state-based financial aid, university-specific loans and scholarships designed for undocumented students.

Do DACA students need a cosigner or collateral for private student loans?

Many private lenders require some kind of collateral or a cosigner who’s a U.S. citizen or permanent resident. However, some lenders offer study loans without collateral or no-cosigner loans based on academic performance and future earning potential.

Are interest rates higher for no-cosigner loans for DACA students?

Since lenders accept more risk with no-cosigner loans, the interest rates may be higher. In general, rates depend on the lender, your academic background and your future earning potential. It’s always smart to complete an education loan comparison to find the best deal.

Can I get a loan for a master’s program as a DACA student?

Yes, some lenders offer master’s program loans to DACA students. It’s important to research and find lenders that cater to graduate students.

What documentation do DACA students need to apply for an MPOWER loan?

You’ll need your I-797 Notice of Action approval on an I-821D Deferred Action for Childhood Arrivals case OR your I-766 (Employment Authorization Document) with your name and the category listed as “C33.”


*Rates as low as 9.99% (11.16% APR). This interest rate and APR includes a 0.25% discount for automatic recurring payments.

DISCLAIMER – Subject to credit approval, loans are made by Bank of Lake Mills or MPOWER Financing, PBC. Bank of Lake Mills does not have an ownership interest in MPOWER Financing. Neither MPOWER Financing nor Bank of Lake Mills is affiliated with the school you attended or are attending. Bank of Lake Mills is Member FDIC. None of the information contained in this website constitutes a recommendation, solicitation or offer by MPOWER Financing or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.

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