According to data from the California system, no colleges were above the 30 percent federal threshold. The system’s overall default rate is down to 17 percent, from 19 percent last year.
The system recently began a campaign to get all of its colleges below 20 percent. Last year, 30 colleges were above that mark, Metune said, compared to just 19 this year.
The college didn’t exit the loan program without offering students other options
Any college that is enrolling students taking out federal loans is right to be concerned about loan defaults among former students, and they should take that seriously, Cochrane said.
While Cochrane said she’s heard one-off anecdotes about a student who used financial aid money inappropriately, there is very little evidence of this being a widespread problem, particularly at the community colleges.
Most community college students are living independently, and they will have living costs, she said. No one questions those costs when they’re talking about four-year students. But you will hear a lot of the same people be highly critical of community college students who are taking out loans and receiving grant aid to cover their grocery bills or rent.
At least one college in a relatively low-income area of the state cited students who used federal aid to cover living expenses as a reason to opt out because those conditions make it difficult for graduates to repay.
For example, North Carolina’s Beaufort County Community College stopped participating in federal loan programs in 2014 because of rising default rates, said David Loope, the college’s president.
The college’s default rate at the time was about 29 percent, he said. But a backlash followed the opt-out decision payday loans Zachary LA by the college of about 2,500 students.
We had a significant drop of about 25 percent in enrollment that is only now coming back, Loope said. We had to ensure to the citizens in our service region that just because we were withdrawing from the student loan program, it did not mean students were prevented from obtaining Pell Grants or scholarships from the college.
Loope said the economic barriers that pushed students to take out federal loans were the same ones that often kept them from repaying the loans after college.
They’re impoverished, and we’re in one of the poorer areas of North Carolina, he said. Jobs are somewhat difficult to come by in this region.
Beaufort students have transportation obstacles, health-care issues, housing insecurity, childcare and other living expenses, said Loope, and loans often made those obstacles worse.
The TICAS report found that nearly 55 percent of North Carolina community colleges have opted out of federal loan programs
It’s absolutely essential to understand that if you’re going to pull out or forgo the student loan program, Loope said, you need to find ways to make up the difference for your students, especially in an impoverished area.
San Bernardino is attempting to go a step further than the statewide tuition-free plan with the creation of its own two-year tuition-free program. The district’s board voted in .
Students, if you’re willing to promise on your end that you are going to take a full class load and work to graduate with an associate degree in two years … our promise is that you will not incur any other costs for education, Baron said.
Baron said he has been lobbying the state chancellor’s office and local legislators to eventually drop the requirement that colleges participate in the federal loan program. So far, the latest change to AB 19 is a bill the Legislature introduced in December to extend the tuition-free offer from one to two years.