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Some Students Blocked From Federal Loans

Oct. 21—Many community and technical college students in Tennessee and Georgia have no access to federal student loans, causing some to turn to more expensive private loans, a new report shows.

The students cannot apply for federal loans because their school won’t enroll in a federal student loan program, fearing participation will expose them to a high default rate and related sanctions, according to research released this month by the national Institute for College Access and Success.

“With the economy down, more people are enrolling in community colleges, and they are more likely to need every financial aid option available,” said Deborah Frankle Cochrane, program director at the institute, located in Berkeley, Calif.

But Georgia and Tennessee are among six states where more than 20 percent of community college students cannot apply for federal loans. In Georgia, 60.4 percent attend schools that do not offer federal loans, while in Tennessee 26.7 percent attend such schools, the study showed.

Using private student loans or credit cards to pay college costs can be costly, since private lenders can charge double or triple the interest rate attached to federal student loans. Private companies also can impose hidden fees, according to the institute’s study.

Phil Gregory, a 50-year-old from LaFayette, Ga., is working on his associate’s degree at Georgia Northwestern Technical College in Rock Spring. He said he thinks schools that don’t offer federal loans discourage some students from attending.

When you are attending school full time without a job, living expenses can pile up and federal loans can help people stay afloat financially, he said.

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