Community College Students Need Not Apply: Our Reward for Bailing Out the Banks

[marmar]

Published on Thursday, August 28, 2008 by CommonDreams.org
Community College Students Need Not Apply: Our Reward for Bailing Out the Banks
by Kesi Foster


The American Dream deferred - that's what national lenders announced recently when they told Americans they were significantly reducing their lending to students who attend community college. Education is the great equalizer, but there was no equality in their decision: they targeted community colleges for cuts while extending their lending programs at distinguished 4-year schools.

According to the New York Times (6/6/08), the following lenders have started turning away from community college students: Citibank, JPMorgan Chase, SunTrust, and PNC. In the case of Citibank, it has stopped offering loans to all community college students in the state of California. The banks' reasoning is that community college students are more likely to default and are taking out smaller loans, while the students at elite universities are more likely to take out bigger loans and to re-pay them, since they are expected to earn more in the job market. This might sound like solid reasoning were it not for the fact (duly pointed out in the article) that the government ensures all student loans up to 95%. Thus there is essentially no risk involved for the lending companies.

We've been told that a college degree will set a person on the path for success. Not everyone takes the same path, however. People enroll in community college for many different reasons. Some didn't get the grades in high school to qualify for a 4-year school, while others have to work full-time and need the flexibility that community colleges offer. Most simply cannot afford to enroll in a 4-year school. I am one of them.

After high school, I enrolled in St. John's University because I got decent grades in high school and I was expected to go to college. I had no understanding of what I wanted to be in life and didn't grasp the importance of the college experience and a higher education. I pretty much picked a major out of a hat and then spent my first two semesters skipping one too many a class. By the summer I decided not to enroll for the fall, and took a full-time job instead. It wasn't anyone's fault-in truth, I was not ready to attend college and made my decision accordingly. ......(more)

The complete piece is at: http://www.commondreams.org/view/2008/08/28-0

[zbdent]

1. "community college students are more likely to default"

I thought that a good percentage of those who failed to repay their student loans were doctors ...

[Fresh_Start]

2. no, not really

because protodoctors are a very small portion of the student population.

[LeftHander]

3. To Republicans investing in Higher Education means....

Charging a extra percentage point or two on student loans.

[jobendorfer]

4. I suspect their logic is something like this

- the cost of processing/managing a student loan is approximately constant (i.e., it's not a function of the loan amount)
- bigger loans => more interest income
- thus, focus on people who are borrowing larger amounts

NOT saying I think this is a good thing. This is another instance where the government could enforce some requirements about availablity in return for the loan guarantees.

J.