Issue Position: The Dream Fund

Issue Position

Dear Marylanders,

When my father came to this country and became the first member of our family to graduate from college, it was the start of a new chapter -- a chance to escape the poverty of his childhood and give back to his community.

For so many of Maryland's young people, pursuing higher education is a way they can climb the ladder of opportunity towards success. And over the past seven years, we've made progress in making higher education more accessible. Together, we froze tuition at our state's colleges and universities for four years in a row and overall, saw the lowest tuition increases in the country.

But for all of our progress, a group of Marylanders were in danger of falling behind. Maryland's "Dreamers" -- high school graduates who are also the children of undocumented immigrants -- have the same hopes as so many of our young people. They strive to go to college, get a good job, and one day support a family. For too many of these Marylanders, the cost of out-of-state tuition was a roadblock preventing future opportunities.

So three years ago, we fought for -- and passed -- the Maryland Dream Act. As long as the student and their parents file income taxes for the previous three years, and they enroll in one of our outstanding community colleges for two years, they are eligible for in-state tuition.

It's a program that voters supported in 2012, making Maryland the first and only state in the country to approve the Dream Act by referendum. And beginning last year, our high school graduates are able to access Maryland's outstanding public higher education system.

While these students now have better access to higher education, paying for college remains a struggle, as the children of undocumented immigrants don't have access to Federal student loans that allow so many of our students to enroll.

It's time to take the next step in making college accessible and affordable for all of Maryland's students by establishing the Dream Fund. Through this new student loan program, we'll provide low-interest loans to those who have been shut out of the traditional process, making it possible for them to get a high quality education and skills training that will help them achieve their goals and dreams.

Marylanders are enrolling in, and graduating from, our colleges in record numbers. And together, we're building the best educated, best trained workforce in America capable of innovating, competing in a global economy, and making our state stronger. College affordability and accessibility are at the heart of that future. And with the Dream Fund, more Marylanders will get to be a part of it.

Sincerely,

Lt. Governor Anthony G. Brown

Mission: The Brown-Ulman Administration will establish the Dream Fund -- a student loan fund that makes college affordable and accessible for Maryland Dreamers.

The Brown-Ulman administration will establish a student loan fund for Maryland's Dreamers. The Dream Fund will be housed with the Maryland Higher Education Commission. Loans will be extended at interest rates reflective of federal student loans (e.g. Federal Perkins Loans), and aimed at providing the lowest possible rate to eligible students.

Eligibility for student loans under this program will mirror the requirements for in-state tuition under the Maryland Dream Act, including: (1) graduation from a Maryland high school; (2) family income tax filings for the preceding three years; and (3) enrollment in community college for the first two years of his/her college career before transferring to a State institution of higher education. Upon graduation, students will be required to repay loans in accordance with industry standards. Loan eligibility and total borrowing limits will be determined based upon need. Preference will be given to students of the greatest economic disadvantage.

Undocumented immigrants are currently ineligible for student loans offered by the federal government. Congress has been slow to adopt comprehensive immigration reform, including the passage of a federal Dream Act. But our students cannot afford to wait for fundamental benefits that make college accessible for the vast majority of Americans. The Dream Fund is a bridge that will help deliver on the promise we made through the passage of the Maryland Dream Act. Now is the time to build upon our success and offer a new pathway in which Maryland's undocumented students can gain access to more educational opportunities that will allow them to grow and thrive as Marylanders(1).

Significant economic barriers remain for undocumented students attempting to gain access to higher education.

Due to economic and other barriers, only 5 to 10% of undocumented high-school graduates attend college.(2)
Two-thirds of undocumented immigrants aged 25 and older have no more than a high school education.(3)
Immigrant students are much more likely to come from low-income families, and those students are more likely to remain low-income in adulthood.(4)
While immigrants tend to complete their degrees at the same rate as their peers, they attend college at a substantially lower rate(5).

These barriers to postsecondary education also restrict opportunities for lucrative jobs as adults(6). In 2012, the Commission to Study the Impact of Immigrants in Maryland recommended that the State continue to improve efforts to afford high quality education to all young Marylanders, regardless of immigration status(7). Maryland has a vested interest in ensuring that Dreamers succeed(8). Not only are the net economic benefits of the Maryland Dream Act positive, but the more students who gain access to higher education in Maryland, the greater the value to all Marylanders(9).

We will capitalize the Dream Fund as reflected above, beginning at $600,000 in FY2016 and growing to $4,000,000 in FY2019. We will also provide funding for administrative costs of $200,000 in FY2016 and increasing to $275,000 in FY2019.

Assuming 75% of loans are recovered at 5% interest -- in line with current Federal Perkins Loan rates(10) -- the Dream Fund will be a revenue-generating program in the long term. Loan repayments received will be used to recapitalize the program each year; and the Fund will remain in operation until comprehensive immigration reform is adopted that allows Dreamers to access Federal student loans.

Citations

[1] "The Impact of Immigrants in Maryland Final Report." Commission to Study the Impact of Immigrants in Maryland, February 2012
[2] Roberto G. Gonzales. Wasted Talent and Broken Dreams: The Lost Potential of Undocumented Students (Washington, DC: Immigration Policy Center, American Immigration Law Foundation, October 2007)
[3] Erisman, Wendy and Looney, Shannon. Opening the Door to the American Dream: Increasing Higher Education Access and Success for Immigrants (Washington, DC: Institute for Higher Education Policy, Lumina Foundation for Education, April 2007)
[4] Koball, Heather and Douglas-Hall, Ayana. Rate of Children in Low-Income Families Varies Widely by State. (New York: National Center for Children in Poverty, Columbia University, September 2004)
[5] Erisman, Wendy and Looney, Shannon. Opening the Door to the American Dream: Increasing Higher Education Access and Success for Immigrants (Washington, DC: Institute for Higher Education Policy, Lumina Foundation for Education, April 2007)
[6] Lagdameo, Angela and Adam Ortiz, A Fresh Start: Renewing Immigrant Integration For A Stronger Maryland, The Report Of The Maryland Council For New Americans. Report submitted to Governor Martin O'Malley. (Baltimore, MD: Maryland Department of Labor, Licensing, and Regulation, August 2009)
Capps and Fortuny, "The Integration of Immigrants and Their Families in Maryland: The Contributions of Immigrant Workers to Maryland's Growing Economy," 2008
[7] "The Impact of Immigrants in Maryland Final Report." Commission to Study the Impact of Immigrants in Maryland, February 2012
[8] Lagdameo, Angela and Adam Ortiz, A Fresh Start: Renewing Immigrant Integration For A Stronger Maryland, The Report Of The Maryland Council For New Americans. Report submitted to Governor Martin O'Malley. (Baltimore, MD: Maryland Department of Labor, Licensing, and Regulation, August 2009)
[9] Gindling, T.H. and Mandell, Marvin. PRIVATE AND GOVERNMENT FISCAL COSTS AND BENEFITS OF THE MARYLAND DREAM ACT, (Baltimore, MD: Maryland Institute for Policy Analysis and Research, University of Maryland Baltimore County, December 2012)
[10] "Federal Perkins Loan," US Department of Education Website, 2014

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