Under a new plan, those aged between 16 and 30 who have lived in the US continuously for five years would be eligible for amnesty from deportation.
Eligible candidates will also be able to apply for a work permit.
The move is seen as addressing a top priority for many Latino voters in a presidential election year.
Secretary of Homeland Security Janet Napolitano said deportation laws were not designed to be “blindly enforced without consideration given to the individual circumstances of each case”.
“Discretion, which is used in so many other areas, is especially justified here,” Janet Napolitano added.
In order to be eligible under the new initiative, illegal immigrants must:
• have arrived in the US when they were under the age of 16
• have lived continuously in the US for at least five years
• must be in school, or have graduated from high school or be honorably discharged veterans of the US military
• have no criminal record
• be under 30 years old.
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