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Tuesday, February 24, 2009

Will Student Loans Be Available For Community College Students

By Bryce Q. Jarwoski

Obtaining a student loan for students at community colleges may have just become harder. In the current financial climate, the biggest banks in the country have reduced the colleges on their eligibility listings for student loans. Unfortunately, most of those removed are community colleges. It would appear that students attending the more expensive and elite colleges will still be able to get a student loan, but those attending community colleges will not. College education is being split into levels by this policy.

The real reason behind the decision by leading banks to stop offering student loans is the current financial crisis. It is simply much harder for lending institutions to raise the money themselves, so they do not have the funds to lend and they have had to cut back.

On a brighter note, there are other lenders who claim they will continue to offer loans to all college students. Companies such as Nelnet and Sallie Mae have recently committed to continuing with the Federal government backed scheme and will lend to students attending any college. This is good news for those attending community colleges.

For students looking to fund their college education by taking out a loan, the best option is a federal loan. These loans have a low, fixed interest rate, low fees and the interest is paid by the government while you are studying. These loans are available to all students regardless of their college, their background or credit history.

If this is so, then why are some community college students unable to get one of these student loans? It appears that there are some colleges that do not participate in the scheme, and this disqualifies the students from the loans. These students are forced to resort to other, more expensive, methods of finding money to pay for their college education - and they are often the ones who least can afford this.

The banks claim that these students are a higher risk category and more likely to default. Students at community colleges often come from low income families and should be entitled to cheaper federal loans. The colleges would be better supporting the scheme and teaching the students how to manage their finances and repayments.

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