If you’re a community college student applying for financial aid, then know this: You’re in exceedingly good company.
The number of your fellow students in need of aid has skyrocketed over the last five years, according to Robert Shireman, president of EconomicDiversity.org: “As costs like housing and textbooks continue to rise along with tuition and fees, financial aid is becoming a necessity for more community college students.”
Shireman’s organization reports that in 2000-2001, just over one-quarter of all community college coeds completed a FAFSA; in 2005-2006, that number jumped to 34%. While the percentage of students applying for aid from two-year colleges is lower than at public four-year (59%) and private four-year (66%) schools, the rate of increase over the last five years has been much more dramatic. Application rates are up 37% at two-year schools, while public school apps increased 10%, and private school requests went up just 7%.
Yet even with financial need at an all time high, the supply of federal aid for community college students is drying up. According to the Project on Student Debt’s recently released report, Denied: Community College Students Lack Access to Affordable Loans, one million community college students are denied access to federal student loans because their schools opt out of the Stafford program.
As a result, some of America’s most needy students are being forced to decide between foregoing higher education altogether and taking on much riskier forms of financial aid, including unsecured private student loans or even credit cards. In a press release, Shireman had this to say:
“In the current credit climate, access to federal student loans is more important than ever. It makes no sense for a community college to force low-income students to choose between taking out an expensive private loan or dropping out of school.”
Most of the schools without federal loan programs claim it’s because they’re worried high default rates would endanger other forms of federal aid, like the Pell Grant. But the Project on Student Debt says those fears are unfounded since federal sanctions are extremely rare: Washington won’t block a college from distributing Pell grants unless more than a quarter of its recipients have defaulted on their loans for three years running. Let’s put those numbers in perspective: In 2005, there was only community college with a default rate that high, but since it was under the 25% cut-off in ’04, its students are still eligible for the Pell Grant.
Rather than proffering some anemic excuse about the greater Pell Grant good, it seems to me that community colleges should do more to help their students make thoughtful financial decisions. A good place to start would be mandatory counseling sessions for loan recipients, in which counselors help students understand the real cost of paying back their student loans.
What do you think? Do colleges have a responsibility to at least provide access to affordable aid? And if so, what role should your school play – if any – in helping students become wise stewards of their financial future?