How to Make Community Colleges Even More Affordable

NEW YORK (MainStreet) — Community colleges are thought to be an affordable alternative for postsecondary education, but one obstacle stands in the way of nearly one million students seeking to gain employability: the lack of federal student loans.

"Most community college students still don't use loans to pay for their education, but for those who need to borrow, federal student loans can make the difference between graduating and having to drop out," said Debbie Cochrane, research director for The Institute for College Access & Success (TICAS). "Only 17% of community college students take out loans, but 37% of community college associate's degree graduates have federal loans."

TICAS says the loans are unavailable simply because their school chooses not to offer them. That means students may have to turn to more costly student debt, such as borrowing from credit cards or high-interest private loans. It can also lead to longer work hours and a reduction in the number of classes taken.

Of the nearly 1 million students in 30 states with no access to student loans, more than one-quarter are enrolled in California community colleges. In seven states, more than 20% of community college students attend schools that do not participate in the federal loan program, including schools in Alabama, Georgia, Louisiana, Montana, North Carolina, Tennessee and Utah.

While tuition and fees are comparatively lower than typical universities, community college students still face average total costs of about $15,000. TICAS says nearly 40% of all U.S. undergraduates attend community colleges, including one-quarter of all full-time undergraduates. Most (82%) full-time community college students need financial aid, but very few – just 2% – qualify for grants.

According to the TICAS study, community colleges that don't participate in the federal loan program are typically concerned with a potential high rate of loan defaults, which could prevent them from offering federal financial aid. The study cites as a successful example Albany Technical College in Georgia, which has significantly reduced defaults by utilizing campus-wide initiatives to encourage students to stay current on their loans.