Federal loans not an option for many junior college students

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For students who need to borrow for college, federal loans are almost always the best deal. But a new study finds that more than 1 million community college students — a disproportionate number of them minorities — can't get such loans because their schools decline to participate in the federal loan program.

These community colleges have their reasons — including trying to protect students from borrowing too heavily.
But the report, to be released Thursday by the California-based Project on Student Debt, argues that such schools are denying students an important benefit. It said students who can't get federal loans may have to work more or take on private loans and credit card debt.

The findings were criticized by national groups representing community colleges and financial aid administrators, as well as people who work at some of the colleges. They note community colleges are usually far cheaper than four-year schools, so it's reasonable for some schools to tell students they shouldn't be borrowing.

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