Student Loan Advice For Community College Bound 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 reason the banks have had to curtail their student loan numbers is the current difficulty in raising money for lending. Because they cannot raise funds to the same degree as before the credit crisis, they do not have the money to lend.

There are, however, some lenders who are still providing student loans for college students. Some companies have made an ongoing commitment to support the federal government-backed student loan scheme. Sallie Mae and Nelnet will offer loans to all college students, irrespective of the college they attend. This is welcome news for students of 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.

So why, therefore, are community college students unable to get a federal government backed loan? It appears that numerous community colleges do not participate in the scheme and so the students at these colleges cannot get a federal student loan. The students have to rely on expensive private loans and credit cards to pay for their college education - and they are usually the students who are least able to 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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