SACRAMENTO -- California public universities could lend money to students unable to take out federal loans because of their immigration status under a law proposed Wednesday.

The latest move to help California students brought to the country illegally as children, state Senate Bill 1210 would establish loan programs at the state's two public university systems for students who have no access to the relatively low-interest federal student loans.

Initial funding for the California Dream Loan Program would be $9.2 million -- $2.3 million from the universities and $6.9 million from the state, according to a news release from the office of the bill's author, Senator Ricardo Lara, D-Huntington Park/Long Beach.

UC President Janet Napolitano -- who has faced withering criticism and protests from immigration activists over her enforcement of immigration laws as secretary of homeland security -- spoke in favor of the bill Wednesday at a Senate Education Committee hearing.

"These students have worked hard to achieve their dream of a university education, and I believe we should work as hard to ensure that they have every chance to succeed, including providing them access to equivalent resources as their campus peers," Napolitano said, according to a transcript of her testimony.

The universities estimate that about 1,200 CSU students and 1,300 UC students would take out such loans.


Advertisement

The program would initially cost UC about $1.6 million a year, though if the loans are structured well, it could become cost-neutral, said spokeswoman Dianne Klein. CSU's annual cost would be roughly $900,000, said spokesman Michael Uhlenkamp.

In 2001, California was one of the first states to allow students who attended high school there to pay in-state tuition at its public universities. Last year, students who entered the United States illegally became eligible for state tuition aid, or Cal Grants.

But without access to federal Pell Grants or loans, the students still have financial aid gaps averaging up to $6,000 a year for UC students and $3,000 for those at CSU, the news release said.

"We invest in California students from an early age, and many of them have done what we've asked them to do: work hard, study and pursue a higher education," Lara said.

"If we're serious about strengthening our economy then we must remove obstacles for our future workforce when they're close to the graduation finish line," he said.

UC Berkeley will test a similar loan program for the coming school year, using funding Napolitano set aside to help students living in the country without legal permission, said Nohemy Chavez, a counselor with UC Berkeley's Undocumented Student Program.

Lending money to students is "a great temporary solution," said UC Berkeley student Jesus Lopez, whose family came to the U.S. illegally when he was 7.

"It will definitely help during our college years," Lopez said. "However once we graduate, those students who are not legally authorized to work will encounter another problem -- paying back those loans."

Follow Katy Murphy at Twitter.com/katymurphy.