Credit unions have an opportunity to position themselves as trusted financial partners of the immigrant community. Last month, the Supreme Court of the United States ruled in favor of the Deferred Action for Childhood Arrivals (DACA) program. This immigration program was created through an executive order from President Obama in June 2012. For the last eight years, the DACA program has helped many immigrants fulfill dreams and achieve success in this country, by providing deportation relief and work authorization. Credit unions were at the forefront of providing financial services to the first DACA beneficiaries. We witnessed credit unions create “Dreamer Loans” to help individuals pay for their legal and immigrant fees. Now that DACA has been given new life, will credit unions rise to the challenge once again to help with the obstacles young immigrants face?
DACA recipients are aware of the vulnerability of the program because it is not a law. The September 2017 decision by the Trump Administration to rescind the DACA program left many young immigrants in a challenging position. After a three-year legal battle between federal courts and the administration, the case was ultimately heard by the Supreme Court. The administration has decided to continue accepting DACA renewals while limiting the term from two years to one. It was also decided that they will not be accepting first-time applications and most advance parole applications. This contradicts the Supreme Court’s ruling and immigrant advocates are planning to challenge their decision.
Terminating the program would negatively impact immigrant families, our healthcare system, essential workers, and the economy as a whole. The Center for American Progress estimated that more than 1.1. million undocumented immigrants met the basic DACA requirements. Roughly 825,000 immigrants have been granted DACA at some point during these eight years, leaving approximately 300,000 young immigrants who would qualify to apply for the first time.
Credit unions play a very important role in the lives of immigrants. From opening accounts and providing services to those who have Individual Taxpayer Identification Numbers (ITIN) and alternative forms of identification.
If the administration moves to accept first-time applications, about 300,000 young immigrants will need assistance to pay for their legal and immigration fees. These individuals do not have social security numbers. Here are some steps to take to assist them:
– Ensure your policies are welcoming of individuals with ITINs. A member may be considered an unauthorized immigrant today, but may obtain a legal status later.
– Repackage a personal loan as an immigration loan. This will help your credit union with marketing and awareness among an immigrant population.
– Partner with non-profit and legal service providers to support their efforts to help young immigrants complete their first-time and renewal DACA applications.
– Expand your scholarships to include both undocumented and DACA recipient students, as they cannot access federal aid to pay for higher education.
Credit unions helped DACA recipients back in 2012. Since then, they have built long, lasting relationships and many have even financed their first mortgages with the same credit unions that lent them money for that first-time DACA application. Here is an opportunity to help young immigrants again. Is your credit union ready?Leave a comment
According to the U.S. Department of Commerce, employment opportunities in science, technology, engineering and math (STEM) are booming, with 24.4 percent growth over the last decade. Yet, not enough students are pursuing degrees and careers in the STEM fields to meet the increasing demand. There are currently two STEM job openings for every qualified job seeker.
The lack of STEM representation is even more prevalent among Hispanics, who although account for approximately 20 percent of the U.S. population, only represent about 7 percent of the STEM workforce.
STEM workers enjoy a pay advantage compared with non-STEM workers with similar levels of education. Therefore, increasing the number of Hispanic students pursuing STEM degrees is one way to promote the continued socioeconomic mobility of Hispanic families in the U.S.
There are likely many factors that play a part in the underrepresentation of Hispanic students pursuing STEM – lack of information or academic resources, unfamiliarity of STEM opportunities among parents, etc.
However, according to a July 2018 study from the Hope Center for College, Community and Justice, a lot also has to do with finances. The study found that university students from low-income families who were offered need-based grant aid were 7.87 percentage points more likely to declare a STEM major than similar peers, representing a 42 percent increase.
What does this mean for credit unions?
The Hope Center study means credit unions have the opportunity to impact the number of Hispanic students who are pursuing STEM careers. This can be accomplished by connecting members with a variety of college savings products and opportunities – supported by culturally relevant financial education for parents and children. Consider the following opportunities:
• 529 college savings plans. These savings plans are tax-advantaged college savings vehicles and one of the most popular ways to save for college today. Much like the way 401(k) plans revolutionized the world of retirement savings a few decades ago, 529 college savings plans have revolutionized the world of college savings.
• Coverdell ESA plans. These savings vehicles are often used as supplements to 529 plans or other savings vehicles because they only allow parents to invest a maximum of $2,000 in them each year.
• UGMA/UTMA accounts. Parents or grandparents can also set up custodial accounts available under the Uniform Transfers to Minors Act (UTMA) or Unified Gift to Minors Act (UGMA). These accounts allow parents or grandparents to invest as much as they would like each year and in total. However, these investments are not tax-free like they are with 529 plans and Coverdell plans.
• College savings reward programs. Consider ways you might be able to help members save for college through purchases they’re already making. Can you offer credit card points or cash back that go toward a 529 plan or college savings account?
• Separate savings accounts. Perhaps the easiest solution for members is to set up a savings account dedicated to college savings and keep it separate from other accounts. Encourage members to set up automatic contributions and bolster the contributions anytime they receive a raise, bonus or other financial influx.
• Scholarships. Providing a scholarship may be just the financial – and confidence – boost a deserving high school student needs to attend college and pursue a STEM career. Just look at Gabriel Hernandez, who received a scholarship from JetStream Federal Credit Union, made possible by the Warren Morrow Hispanic Growth Fund Grant. In his scholarship essay, Hernandez wrote, “I know that I will succeed in college, but this scholarship will show me that others believe in me, too.”
No matter how your members plan to pay for college, it’s important that they save early and often. Consider offering educational classes and information – in both English and Spanish – to communicate the importance of saving for college and share resources to make it easier. The more financially prepared they are, the more likely it is they will go to college and pursue their dream career – STEM or otherwise.Leave a comment