Almost a million community college students across the U.S. lack access to federal student loans because their schools don’t offer them.
California community colleges enroll more than a quarter of these students who don’t have the option to tap federal loans, according to a report released today by the Institute for College Access & Success. In 20 states, all community colleges take part in the loan program, while the remaining 30 states vary by institution, said the Oakland, California-based nonprofit group known as TICAS.
Almost 40 percent of U.S. undergraduates attend community colleges and more than 80 percent of full-time students need financial aid, according to TICAS, which focuses on college access and affordability. While tuition and fees are typically lower than that at four-year public universities, total costs average $15,000 and only about 2 percent have their needs met by grants, it said. Without U.S. government loan access, students are often driven to take out more expensive loans with fewer protections, such as private loans and through credit cards.
“Barring access to federal student loans doesn’t keep students from borrowing,” Debbie Cochrane, research director and lead author of the report, said in a statement. “It just keeps them from borrowing federal loans, which are the safest option.”
Schools that don’t participate often cite concerns about loan defaults, which can prevent them from having access to federal financial aid if the default rates are too high, the report said.
Only 4 percent of California community college student borrow under federal loan programs, Paige Dorr, a spokeswoman for the California Community Colleges Chancellor’s Office, said today in an e-mail. Structural weaknesses in the program limit a college’s ability to control which students can borrow, the amount they are eligible to take out and their repayment behavior after finishing school, she said.
“Our system is actively working to improve student access and success with several major initiatives,” Dorr said. “Until those efforts have a chance to work, for many of our students borrowing may not be the best option.”
Students from “underrepresented” minorities are disproportionately denied access to federal loans, TICAS said. Among all students attending the schools, 10.5 percent of Latinos, 12 percent of blacks and 20 percent of Native Americans lack loan access, compared with 7.5 percent of white and 4.5 percent of Asian-Pacific Islander students, it said.
“For those who need to borrow, federal student loans can make the difference between graduating and having to drop out,” Cochrane said.