California uses state funds to subsidize college for undocumented students

California has created a parallel financial-aid system for undocumented students through measures like AB 540, the California Dream Act and a state-run Dream Loan program, allowing them to receive Cal Grants, university grants, fee waivers and other subsidies. Federal student aid remains unavailable to them, so the state fills the gap. In the 2022-23 year, the University of California system allocated about $30 million in Cal Grants and $49 million in need-based aid to undocumented students, totaling $79 million.

Opponents contend that the policy effectively subsidizes illegal immigration and strains taxpayers, while supporters claim it offers equal educational opportunities. Governor Gavin Newsom's office maintains that undocumented students do not receive more aid than citizens, but critics say the moral issue is the use of public funds at all. The debate highlights tensions between immigration enforcement, state budget priorities and access to higher education.