<p>Each institution gets to make its own rules about the TOEFL. There are amazing (but true) cases of students born here and educated entirely in the US who were asked to take the TOEFL once the college/university in question found out that the kid’s family also spoke another language in the home. That’s why I always remind people to investigate this with each institution.</p>
<p>Federal money is federal money. Your kid will get it as a legal permanent resident. he might be asked to produce formal documentation of his status (like faxing a copy of his green card) but that should be it. Whether or not there also is separate money available solely to citizens is of course up to the institution - just like each state institution gets to ask for proof of in-state status.</p>