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Financial Aid and Scholarships for Undocumented Students

Mark Kantrowitz

October 08, 2012

What advice would you give on financial aid to undocumented students? — T.T.

Before discussing financial aid for undocumented students, it is best for students who believe that they are undocumented to first confirm with their parents that they are indeed undocumented. A student who was born in the United States or certain territories or outlying possessions is a US citizen even if the student’s parents are undocumented.

US Citizen Students with Undocumented Parents

US citizens and permanent residents are eligible for federal student aid, regardless of the immigration status of their parents. If a dependent student’s parents are undocumented, they should specify 000-00-0000 as their Social Security number (SSN) on the Free Application for Federal Student Aid (FAFSA). They should not supply a fake SSN, as that number will fail the FAFSA data match with the Social Security Administration (SSA).

The student, as a US citizen, should have a legitimate SSN. If the student does not have a SSN, the student should apply for one by completing Form SS-5, by providing original documents that prove student’s citizenship, age and identity, such as the student’s birth certificate or US passport, and by appearing in person at a Social Security Administration office for an interview.

When one or more of the student’s parents are undocumented, the student will not be able to use the IRS Data Retrieval Tool to complete the FAFSA. Instead, the student and the student’s parents will be required to file IRS Form 4506-T to have a tax return transcript mailed directly from the IRS to the college financial aid office. Accordingly, if the parents’ income is high enough that they would be required to file a federal income tax return, they must file a federal income tax return and pay federal income taxes.

To file a federal income tax return, each undocumented parent will need an Individual Taxpayer Identification Number (ITIN). The ITIN is 9-digit number, like the SSN, but with a 9 as the first digit. To obtain an ITIN, each parent should file IRS Form W-7 or IRS Form W-7(SP).

The IRS and SSA do not share data with immigration authorities.

People who file federal income tax returns with an ITIN are not eligible for the earned income credit. They are, however, eligible for the American Opportunity Tax Credit (AOTC) based on amounts paid for qualified higher education expenses. The AOTC is also known as the Hope Scholarship Tax Credit. The student’s name and SSN or ITIN must be listed on the parents’ federal income tax return for the parents to claim the AOTC for the student.

Students who are US citizens are eligible for in-state tuition based on residence in a state regardless of their parents’ immigration status. This issue has nothing to do with whether or not undocumented students are eligible for in-state tuition and the controversy over state attempts to circumvent or side-step the restrictions in the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). Several states have tried to treat these students, who are US citizens, as out-of-state residents. A federal district court in Miami recently overturned Florida state regulations adopted in 2010 and 2011 that restricted eligibility for in-state tuition to students whose parents are US citizens or permanent residents. The judge ruled that the Florida regulations were unconstitutional on equal protection grounds, since the regulations would have created two classes of citizenship. A similar law in New Jersey was recently overturned by a state appeals court and California settled a similar case in 2007.


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