Many N.C. schools lack loan options

Study says students need more federal help

More than half of North Carolina's community colleges don't take part in federal low-interest loan programs, depriving their students of a vital source of money for higher education.

That needs to change, says a nonpartisan state research center, which is releasing a study today on community college funding. The N.C. Center for Public Policy Research also lists other recommendations, including tailoring more aid programs to older students and helping them with child care.

Only Alabama and Georgia rank behind North Carolina in community college students' access to federal loans, according to the national Project on Student Debt, which compiled some data the state group used.

Colleges generally don't participate in loan programs because they fear high default rates will result in a total cutoff of federal aid, including crucial Pell Grants, the primary source of financial aid for poor students.

For example, Durham Technical Community College no longer participates in federal loan programs, said Wanda Maggart, senior vice president for institutional and student support services.

"We're aware that it might create some hardships," she said. "We felt like it made a safer solution for all students who receive Pell Grants."

The study recommends that the state help colleges create good loan default prevention programs to avoid a loss of federal aid. That would require more money and staff for college financial aid offices, but Sam Watts, a policy analyst for the center, said a small state investment would go a long way toward helping students gain access to low-cost, federally subsidized loans.

"Getting a low-interest student loan is a lot better than trying to live off a credit card while you're in school," said Watts, the author of the study.

Robert Shireman, executive director of the Project on Student Debt, said the center's recommendation makes sense. Community colleges, Shireman said, "are not doing students any favors by denying them low-cost subsidized federal loans."

Older and working hard

Financial aid programs are too-often geared to the 18- to 21-year-old student who goes straight from high school to college, the study said. The programs fail to recognize the reality of the typical community college student, who is older and may be between jobs or working to support a family. Two-thirds of community college students work, and more than 70 percent are older than 25.

Community college students in North Carolina pay average yearly tuition and fees of $1,344 but have total costs of $15,600 if they don't live with their parents. The center suggests raising the state's maximum grant for community college students from $900 to $1,250 a year.

"It's time to increase that, especially in light of the economy and transportation costs," Watts said. "It costs a lot more to drive to Wake Tech than it did a year ago."

The state's community college grants are losing ground, compared with state grants for students at UNC system campuses and private colleges, the study said. The community college program receives $10.5 million in state money for an average grant of $827 per student, while the UNC system program gets $58 million for an average grant of $1,712 per student. The need-based scholarship program for private college students receives $35 million for an average of $2,419 per student.

Another way to help community college students earn a degree is to support them with child care, Watts said. The state has child-care grants for community college students, but the program serves fewer than half of the students who qualify for it.