Report: “At What Cost? How Community Colleges That Do Not Offer Federal Loans Put Students at Risk”
Authors: Debbie Cochrane, research director, and Laura Szabo-Kubitz, California project manager, the Institute for College Access and Success
Organization: The Institute for College Access and Success
Summary: The report says nearly one million students at community colleges, or 8.5 percent of all community-college students, cannot get federal student loans because their college chooses not to participate in the program. Without access to student loans, the report says, some students may turn to riskier loan sources or drop out of college.
Findings:
- More than 20 percent of community-college students in each of seven states—Alabama, Georgia, Louisiana, Montana, North Carolina, Tennessee, and Utah—attend institutions that do not participate in the federal student-loan program.
- Minority students are disproportionately denied access to federal loans.
- Community-college students in rural areas and towns are twice as likely as their urban peers to attend institutions that do not participate in the federal loan program.
The report notes that community colleges that do not participate in the federal loan program cite concerns over loan-default rates. If such rates reach exorbitant levels, the federal government can cut off a college’s access to federal financial aid.
The institute, known as Ticas, has written several reports on the issue of community colleges and federal student-loan access over the past decade. In 2011 it noted that more than one million students in 31 states were enrolled at community colleges that did not participate in the federal loan program.
Bottom Line: The report argues that, rather than abandon the federal student-loan program, community colleges should create policies to help students stay on track and avoid default.