Assembly Bill 540 (AB 540) was passed into law by the California state legislature in October 2001 and was implemented on January 1, 2002. Under AB 540, an undocumented student pays resident (in-state) fees at California's public colleges and universities if the student 1) attended a high school in California for at least three years (schooling does not have to be consecutive); 2) graduated from a California high school or received an equivalent degree (GED); and 3) files an affidavit with the institution stating that she or he will apply for legal permanent residency as soon as she or he is eligible. The legislation affects all public institutions of higher education in the state: the University of California (UC), California State University (CSU), and California Community College (CCC) systems. Although AB 540 creates broader access to higher education by offering in-state tuition to undocumented students, for many low-income undocumented students, even in-state tuition is a financial burden for them and their families. AB 540 does not allow undocumented students to apply for state or federal financial aid programs, thus most of these students still struggle financially as they pursue a postsecondary degree. Unfortunately, their struggles go unacknowledged by most researchers, state policy makers, and officials of California's public colleges and universities. They know relatively little about the experiences of AB 540 college students. This report explores the critical issues that undocumented Latina/o AB 540 college students face. In the first part the authors review the provisions of AB 540 and describe a current legal challenge to the statute, and in the second part they discuss the issues that undocumented Latina/o students face. The report concludes with a set of recommendations for policy makers and college and university officials. The authors hope that the information contained in this report will not only contribute to a wider understanding of the experiences of Latina/o undocumented college students, but also inform state and local policy decisions in California regarding undocumented Latina/o students. (Contains 3 figures and 17 notes.) [Funding was provided by the University of California Committee on Latino Research.]