The evidence is that banks are forcing a split in college education by reducing the availability of student loans to some students, based on what college they attend. In the current financial crisis, the major banks have cut back the number of colleges they supply loans to and the ones that have been dropped are community colleges.
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.
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.
By far the best option for student loans is the federal student loan scheme. These loans have low fees, low interest that is fixed and is paid while you are studying. These government backed loans are available to all students regardless of their background or credit rating, and not dependent on the college they attend.
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.
Lenders claim that community college students have a greater risk potential; but instead of denying them cheaper federal loans and possibly creating a greater debt problem by forcing them to find alternative funding, the schools should offer guidance in repayment options, to make federal loans a safe option for lenders.
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.
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.
By far the best option for student loans is the federal student loan scheme. These loans have low fees, low interest that is fixed and is paid while you are studying. These government backed loans are available to all students regardless of their background or credit rating, and not dependent on the college they attend.
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.
Lenders claim that community college students have a greater risk potential; but instead of denying them cheaper federal loans and possibly creating a greater debt problem by forcing them to find alternative funding, the schools should offer guidance in repayment options, to make federal loans a safe option for lenders.
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