August 29, 2008

Publicity About Defaults Steers 2-Year Colleges From Loan Programs

By Paul Basken

Washington

Last April a study found that nearly a quarter of all community colleges do not offer their students federally guaranteed loans. But the institutions' reluctance has been difficult to explain.

Many community-college leaders cited federal rules that make their institutions ineligible for Pell Grants if too many of their students fail to repay government-subsidized loans. Yet no community college is now exceeding the default limits, and almost none ever have.

The

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