Finance in the U.S. as a DREAMer: Support & Resources
The Deferred Action for Childhood Arrivals (DACA) program was introduced in 2012 during President Barack Obama's administration. DACA is intended to shield young undocumented immigrants from deportation. There are many ways, such as buying a home and homeowners insurance, and traveling, recipients can embark on their financial journey in the United States.
Navigating the Financial System as a DREAMer
Like other first-generation immigrants, DACA recipients are often forced to navigate the United States' financial system on their own for the first time. This guide explains how recipients can carve a financial path to obtain a loan, find tuition assistance and get a credit card, among other things.
Common Hurdles and Challenges
Many DACA recipients are located in states with high costs of living, such as California and New York. Before moving to another state, it may be a good idea to estimate and calculate the cost of living. Even with gainful employment, DACA recipients face challenges due to having little or no credit, expensive filings and costly school tuition.
People with zero to no credit are often the target of predatory scams. These range anywhere from immigration-related falsehoods to loans with high interest rates and new credit scams. Below are issues to take into account:
Subprime loans are high-interest loans aimed at people with "subprime" credit scores. Some subprime loan lenders charge interest rates as high as 30%, adding to a borrower's financial problems.
Notaries and immigration consultants
Notaries and immigration professionals can be costly, and many prey on DACA recipients. Stay on guard for charges for government forms, excessive fees, and "consultants" who aren't qualified to provide proper legal advice.
New credit identity fraud
Credit scams abound, though some of the most common include "new credit identity” scams that charge people for Social Security Numbers that can be used for credit services. These are often stolen SSNs that end up involving victims of identity theft and fraud.
Obtaining Help with Legal Fees and Immigration Applications
The current fee for DACA applications and renewals is $495. There is currently no waiver for this fee, but there are other ways you can find financial help.
Look for exemptions
U.S. Citizenship and Immigration Services (USCIS) can exempt certain applicants from the fee if they face extreme circumstances, such as homelessness, medical debts that are $10,000 or more and chronic disability, along with an income of 150% beneath the federal poverty level.
DACA recipients who believe they may be eligible for the exemption must submit a letter with supporting documentation and file a petition before sending in their DACA application. Learn more about how to file a request on USCIS's website.
Find a pro-bono lawyer
Many lawyers provide their services free of charge to immigrants and DACA recipients. Consult a list of legal providers to see if there is a professional who can help you understand the application process.
Look for legal aid
Legal aid offices provide free legal help to people who cannot afford to hire a lawyer. Unlike law offices, legal aid offices are not-for-profit agencies that frequently offer assistance for those with low incomes.
Starting Your Credit Journey: How to Build Credit
Building credit is a way to let creditors, lenders and other financial institutions know you can be trusted with financial responsibilities. This is especially important if you'd like to own a home, buy a car or get a low-interest credit card.
DACA recipients are often cut off from common ways to start building credit, such as asking their parents if they can become an authorized user on a credit card. However, there are still ways to build good credit as an immigrant. Below are some steps you can take.
Put bills and utilities in your name
If you're not interested in a credit card, start by getting a phone plan and/or adding a utility to your name. Pay the bill on time and in full, so you can start establishing a good payment history.
Get a credit card
Get a credit card, such as a secured credit card, and keep your spending under 30% of your spending limit. For example, if your credit card’s spending limit is $600 per month, charge no more than $200 per month and make sure to pay the bill on time.
Open a bank account
Immigrants are 13% more likely to be unbanked than people born in the U.S. Opening a bank account can provide you with access to a debit card and make it easier to apply for a credit card.
Finding Tuition Assistance
Up to 19 states allow undocumented immigrants in-state tuition. This allows DACA recipients to attend state college or university while paying the same tuition as fellow green-card holders and U.S.-born citizens.
At least seven states also offer state financial aid to undocumented students: California, Texas, New Mexico, Colorado, Minnesota, Oregon and Washington. Additionally, many private universities provide both merit and need-based scholarships. Below are additional resources that can help.
- Scholarships.com: This website lists all scholarships available and allows you to set parameters that will make your search easier. It also offers a list of private scholarships for undocumented and DACA recipients.
- TheDream.us: Organizations such as TheDream are dedicated solely to providing scholarships for undocumented immigrants and DACA students. Additionally, there are directories of immigration advocacy organizations that either offer scholarships or work with partner organizations. Check their blogs for due dates and requirements.
- Consulates: Some consulates, embassies or external affairs offices may offer scholarships to DACA recipients who wish to pursue their studies in the United States. For example, the government of Mexico has Institute of Mexicans Abroad (IME) scholarships for Mexican immigrants living in the U.S. It doesn't hurt to ask if the consulate of your country of origin has scholarships you can apply for.
Purchasing a Home for DACA Recipients
The prospect of buying a house can be intimidating for DACA recipients. However, it is possible to purchase a home as long as you meet your lender's requirements, have a stable job and present a decent credit score. Below are additional steps you should take into account.
Save up for a down payment
Lenders require homebuyers to pay a down payment that is a percentage of the home’s asking price. Immigrants may expect to pay a down payment as high as 20%. Consult with prospective lenders about their requirements.
Find an experienced agent
About 88% of homebuyers elect to work with a real estate agent. An agent who has experience working with immigrant homebuyers can assist you better during the homebuying process.
Consider homeowners insurance
Once you purchased your house, buying homeowners insurance will be the next step. Consider adding insurance to your annual expenses. There are options to find affordable and great homeowners insurance providers. Compare quotes to determine what is best for you and your family.
Traveling for DREAMers
Domestic travel isn't a problem for DACA recipients. An unexpired work permit and/or a state ID are sufficient documentation for travel within the country via bus, train or airplane. But traveling abroad can get more complicated. Take note of the following:
Obtain Advance Parole
This "Application for Travel Document" may entail getting assistance from a lawyer and completing an application. Parole is usually granted for humanitarian and educational reasons, though other circumstances may allow you to qualify.
Expert Insight on DACA Recipients and Financial Planning
MoneyGeek spoke to a couple of experts to gain insight on financial issues, resources and services, and financial planning for DACA recipients.
- What are common financial issues you see with DACA recipients?
- What are some resources and services your institution makes available to DACA recipients?
- What are some questions DACA recipients should ask a new financial institution they’re dealing with for the first time?
AFC®, Co-Creator and Co-Founder at Immigrant Finance & Immigration Attorney, Social Entrepreneur, Financial Educator and Financial and Online Business Coach
Assistant Director, Dreamers Resource Center, University of Texas at San Antonio
Financial Expert and President of Second Federal, Self-Help Credit Union division in Chicago, Illinois
Additional Resources for DACA Recipients
There are many additional resources that can be useful for DACA recipients planning their financial journey, living in the U.S., and protecting themselves from scams and fraud.
Resources to Protect Yourself
- Consumer Financial Protection Bureau (CFPB): The CFPB monitors financial developments that affect consumers, such as changes to federal and state policy, financial literacy and credit. It also monitors scams and can help you obtain redress if you are unfairly targeted by unfair business practices.
- American Bar Association: As a DACA recipient, you will likely need to work with a lawyer to continue renewing your permit, among other things. The American Bar Association keeps a state directory of bar associations so you can look for and vet lawyers offering immigration services.
- Stop Notario Fraud: The American Immigration Lawyers Association (AILA) created this website to monitor common scams targeting immigrants. It posts educational blog posts, news and resources you can use to educate yourself.
- U.S. Citizenship and Immigration Services (USCIS) forms: Be aware of site where you have to pay for forms. You shouldn't have to pay for immigration forms. USCIS keeps a list of all immigration forms you may need to file at any given time. This list can help you find them easily — and even show you how to file them online.
- Credit Unions Online: Banks are a great place to open an account or obtain loans. However, credit unions may offer more flexibility when dealing with DACA recipients. This website provides a credit union locator.
- Bridging Refugee Youth & Children’s Services (BRYCS): Originally founded for refugees, BRYCS now offers financial literacy information aimed at helping immigrants of all backgrounds. Services include a podcast and insight into money management for immigrants.
- Mission Asset Fund: MAF is a San Francisco Bay area organization that helps immigrants understand their finances, and it even offers immigration loans to help pay for DACA and naturalization fees. The organization's scope is limited to San Francisco and California, but they maintain a resource database you can search to find help in other states.
- FPA Planner Search: A certified financial planner can help you maximize your finances, navigate loans and create a sound budget plan. This website helps you find a planner who has experience working with immigrants, especially DACA recipients.
- American Institute of Certified Public Accountants (AICPA): A certified public accountant (CPA) who is skilled in dealing with taxes can help you stay on track and be aware of certain deductions and financial considerations you should keep in mind. This directory can help you find someone who is focused on working with DACA recipients.
- United States Department of Housing and Urban Development: The Department of Housing and Urban Development recently changed its rules so that DACA recipients become eligible for FHA home loans. The website explains requirements, eligibility and important terms. Note that not all HUD services are available to DACA recipients.
- USAgov: A comprehensive website that lists every resource in the USA, USAgov is a directory of all government services, including those related to immigration and housing. You can also call 1-844-872-4681 between 8 a.m.-8 p.m. (EST) Monday-Fridays, except during federally recognized holidays.
Advocacy, Community and Mental Health Support
- United We Dream: This national immigration advocacy organization monitors programs such as DACA, posts scholarship information and offers toolkits that can help you make a financial plan.
- Coalition for Immigrant Mental Health (CIMH): Financial responsibilities can impact your mental health. CIMH offers a comprehensive list of resources to deal with any mental health issues associated with finances.
- My Undocumented Life: This lifestyle website covers issues that affect undocumented immigrants, such as applying to graduate school, searching for jobs and internships and much more. It also offers webinars and stories from inspiring undocumented/DACA recipients.
About Ingrid Cruz
- Congressional Research Service. "Deferred Action for Childhood Arrivals (DACA): By the Numbers." Accessed July 25, 2021.
- National Association of Realtors. "2020 Profile of Home Buyers and Sellers." Accessed August 27, 2021.
- National Conference on State Legislatures. "Undocumented Student Tuition: Overview." Accessed July 25, 2021.
- Rice University: Kinder Institute for Urban Research. "The Human and Economic Costs of Rescinding DACA." Accessed July 25, 2021.
- University of Minnesota Open Libraries. "Immigrant and Refugee Families, 2nd Edition: Financial Problems." Accessed July 25, 2021.
- U.S. Citizenship and Immigration Services. "I-821D, Consideration of Deferred Action for Childhood Arrivals." Accessed July 25, 2021.
- U.S. Citizenship and Immigration Services. "Active DACA Recipients - March 31, 2021." Accessed July 25, 2021.
- U.S. Department of Housing and Urban Development. "FHA to Permit DACA Status Recipients to Apply for FHA Insured Mortgages." Accessed July 25, 2021.