Not all community colleges offer federal student loans


About one million community college students do not have access to federal student loans, which may limit their options for financing their education, according to a new report.

The report from the Institute for College Access & Success, a nonprofit organization focused on college affordability, found that about 9% of community college students nationwide attend schools that do not participate. to the federal student loan program. In some states, the proportion of community college students attending non-participating schools is much higher – it’s over 20%, for example, in states like Alabama, Georgia, Louisiana, Montana, North Carolina, Tennessee and Utah.

Community colleges provide an affordable route to college for many students; they generally offer two-year programs and associate degrees to students, who can transfer to a four-year institution to continue their studies. According to the American Association of Community Colleges, tuition and annual fees at community colleges average $3,260, compared to nearly $8,900 for in-state tuition at a public institution. of four years. The association’s latest fact sheet says most full-time community college students work at least part-time while enrolled.

The institute’s report, however, says total annual costs, including textbooks, transportation, housing and other living expenses, average $15,000.

Yet most community college students don’t take out loans to pay for their education; about 17% do, said Debbie Cochrane, the institute’s research director and lead author of the report. For those who need to borrow, she said, federal loans can be the difference between getting a degree and dropping out. The report found that more than a third of community college graduates had federal student loans, suggesting the ability to borrow may help some students complete their education.

Despite the relatively low cost, most full-time community college students need financial aid, and only a small proportion — 2% — have their needs fully met by grants, the report notes. Access to federal loans can help cover extra costs, such as car repairs so they can get to class or childcare so they can study, Ms. Cochrane said. Or, it may allow some students to avoid working two or three jobs, so they can devote more time to their studies.

Community colleges that do not participate in the federal loans program generally say they fear that if their students borrow too much money and cannot repay their loans, the school’s default rate will increase, the report notes. . This could put schools at risk of losing the ability to offer federal financial aid, such as student grants that do not have to be repaid.

“Colleges are right to be concerned about failing students,” Ms. Cochrane said. But simply blocking access to federal student loans does students a disservice and can force them into riskier and more expensive types of debt, like credit cards and private student loans, he said. she declared.

Schools that only offer private loans may have less incentive to help you manage your debt burden, the report notes. At least 20 colleges that don’t participate in the federal program promote banks that offer private loans on their websites, the report found: “Offering private loans instead of federal loans attracts colleges because they don’t assume any liability if borrowers default on their private loans, unlike federal loans.

Here are some questions about community colleges and student loans:

How do I know if a community college I want to attend offers federal loans?

Ms. Cochrane suggests checking out the school’s website. If it’s not obvious, you should call the school’s financial aid office and ask. If you need to borrow for school and have a choice between one that participates in the federal program and one that does not, you might want to consider going with one that offers federal loans, a-t she declared.

Can’t I borrow private loans instead, if my school doesn’t offer federal loans?

In most cases, yes — but private loans, which are made by banks and other lenders other than the federal government, generally don’t come with the consumer protections available with federal loans. These include the ability to defer payments if you lose your job and payment plans geared to your earnings. Private loans also tend to carry higher rates which can vary over the term of the loan, making it more difficult to make payments if rates rise.

What if I want to borrow for community college, but I’m afraid I can’t manage my debt?

Ask if your school offers counseling programs to help students avoid borrowing too much. For example, the report notes that Santa Rosa Junior College in California requires potential borrowers to complete a worksheet requesting career goals, graduation or transfer plans, and expected annual salary after graduation. diploma. Students must complete a detailed budget worksheet and a multi-year borrowing plan, to help them think through what they can afford.

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