NC community college students lack access to federal funds

N.C. community college students are the least likely to have access to federal student loans in the country, according to a recent report.

The report, released in April by a project of the Institute for College Access and Success — a nonprofit policy organization that advocates for college access and affordability — stated 57 percent of students in the state attend community colleges that have opted out of the federal loan program.

But the state legislature passed a bill in 2010 requiring all community colleges to grant students access to federal loans, beginning at the start of the fiscal year in July 2011.

The Republican leadership in the N.C. House of Representatives aimed to combat the legislation with House Bill 7, which would have once again enabled schools to opt out of the federal loan program.

But Gov. Bev Perdue vetoed the bill in April to uphold the 2010 legislation and require colleges to offer the federal loan program.

Republican legislators shared concerns with community college administrators that students would default on the loans, resulting in less federal funding for other types of aid.

David Bowman, financial aid coordinator at Central Carolina Community College, said the school hasn’t allowed federal loans since 1998 because of high student default rates.

“This puts our other federal aid in jeopardy,” Bowman said. “If your default rate gets too high, then the federal government comes in and cuts all of your other federal aid.”

Debbie Cochrane, program director for the institute and author of the report, said it’s common for community colleges to harbor concerns about federal sanctions from high default rates.

“While conceptually there is something to fear, in 2010 no colleges were near sanction levels,” she said.

A school receives federal sanctions and less financial aid funding if its student default rate is at least 25 percent for three consecutive years, according to the report.

Even if the risk of sanctions did not exist, there are other reasons why schools choose not to offer federal student loans.

Linda Nelms, vice president of Wayne Community College, said a shortage of personnel impaired the college’s ability to offer federal loans to students in the past.

“We did not have the staff earlier, and had a lot of internal needs,” she said. “But we have recently received new staff so we think we can handle it.”

Bowman said there’s still a possibility that the House could override Perdue’s veto with a 60 percent vote and allow colleges to continue opting out of the loan program.

But he said the college will offer federal loans if forced by the state.

“If that’s law, we are prepared to do that,” he said. “We’ve already hired someone.”

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