Some NC colleges opt out of federal loans

Four North Carolina community colleges will not let students apply for federal student loans, fearing they’ll run up debts they won’t be able to repay. Other colleges in the state are considering pulling out of the loan program.

North Carolina legislators passed a law requiring community colleges to participate in the loan program, then reversed the mandate. Gov. Beverly Perdue vetoed the reversal, but the veto was reversed in a special session late in the year.

Central Piedmont Community College started offering the federal student loan program in July. Some 3,168 students have run up $5 million in student loans.

“Our concern is if students take a large amount of debt, once they do finish school it will impact their ability to do things like buy a house or a car,” said Jeff Lowrance, assistant to the president at CPCC.

Leaders are also concerned about new federal laws. In a couple of years, the schools could lose all federal aid, including Pell grants, if a large percentage of their students default on the loans.

“There is no screening process. There is no way to tell if a student is in a good position to pay back those student loans,” Lowrance said.

North Carolina ranks last in the nation in community college students’ access to financial aid, says Debbie Cochrane of The Institute for College Access and Success. There’s little risk community colleges could be barred from Pell Grants because of loan defaults, Cochrane says.

POSTED BY Joanne Jacobs ON January 4, 2012

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[…] North Carolina community colleges are backing out of participation in federal student loans, fearing a high default rate will risk future students’ access to Pell Grants. […]

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[…] students’ sake. Some community college officials in North Carolina have decided not to offer a federal loan program because they don’t want students to rack up debts they can’t later pay back. (Community […]


Is it fair to assume that these students don’t repay their loans because the college’s do not help students find appropriate work to repay their student loans? Opting-out simply appears to be a cop-out.

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