California DREAM Loan Program: limits.
AB 681 proposes to increase the borrowing limits for undergraduate and graduate students enrolled in the DREAM loan program. Specifically, the bill maintains the annual limit for undergraduates at $4,000 while enabling graduate students to borrow up to $20,500 per academic year. Importantly, the aggregate borrowing limit for graduate students would rise significantly to $118,500, providing a total potential cap of $138,500 for students pursuing both undergraduate and graduate education. This change is anticipated to improve access to financial resources for students in need, particularly benefiting those pursuing graduate studies where costs can be significantly higher.
Assembly Bill 681, introduced by Assembly Member Elhawary, seeks to amend Section 70034 of the Education Code related to the California DREAM Loan Program. The current program allows students attending participating campuses of the University of California or California State University to receive loans based on need, with specific borrowing limits established. As it stands, undergraduate students can borrow a maximum of $4,000 per academic year and $20,000 in total, while graduate students have a similar aggregate limit. The proposed changes under AB 681 will adjust these limits to provide greater financial support for graduate students, which includes provisions for increased annual borrowing limits and higher total caps.
There may be points of contention surrounding the proposal, particularly in terms of how it alters the balance of financial support between undergraduate and graduate education. Critics might argue that the unequal treatment between undergraduate and graduate borrowing limits could lead to increased financial dependency for graduate students, while supporters will likely claim that the increased limits align with the rising cost of education in California. Additionally, there are broader discussions regarding student debt and how programs like the DREAM Loan contribute to the overall financial health of graduates in their pursuit of advanced degrees.