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Community College Students Need More Access to Federal Loans

October 9, 2009

by Agnes Jasinski

Although community colleges nationwide have seen significant boosts in enrollment, a report released yesterday suggests many will be forced to put their educations on hold or find new sources of funding if their institutions continue blocking access to federal student loans.

The Project on Student Debt released the report, and despite their stance on promoting that students take on as low a student loan burden as possible, they say community college students are at risk for taking on riskier private student loans or watching their grades slip as they take on more work hours to cover gaps in funding because they aren't able to apply for and receive federal student loans. About one in 10 students in 31 states surveyed don't have access to federal student loans, and in some states, more than 20 percent of students can't get the federal loans. Minority students have less access to federal loans than other student groups, as the report found many minority students attending community colleges that don't participate in the federal student loan program.

Why have many community colleges moved away from offering federal student loans? In an uncertain economy, the answer is risk, according to the report. Defaults on student loans have begun to rise among not only community college students, but among all college students over the last few years. The report always says many community college administrators believe students shouldn't have to borrow to attend their schools. Tuition is lower, they say, and if students are saddled with large amounts of debt now, they could hurt their chances for qualifying for low interest rates and federal student loans if they were to transfer to a more expensive, four-year institution.

But some students do need the additional funding even at a low-cost option like a community college, especially in the current economic climate. According to survey results released by the National Council of State Directors of Community Colleges last month, about half of the nation's community colleges are expecting budget cuts and midyear reductions in their state appropriations. Many administrators in that survey also reported that stimulus money provided by the Obama administration went toward meeting existing budget deficits, and that they would be forced to raise tuition rates substantially despite record enrollments to make up for a lack of state funding. (The average tuition increase among community colleges is expected to be about 5 percent for the 2009-2010 academic year.)

While you should always exhaust your options with grants and scholarships first, student loans are often a necessary evil, and we have plenty of tips on how to go about applying for them and making sure you're getting the best rate possible. Never rely on credit cards to fund your education, or you'll run the risk of getting into more debt than you can handle not only post-graduation, but while you're still in school. Browse through our site for more information on your student loan options.


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