About 1 million students at community colleges in economically disadvantaged communities can't get cheap federal loans to fund their education, according to a report from the nonprofit Project on Student Debt.
Administrators at more than 250 public colleges have opted out of the Stafford loan program, which offers to lend low-income students at least $3,500 a year at no more than 6.4 percent after fees. "Students who need extra money to pay for community college will be left with no choice but to use credit cards, payday loans, and other high-cost debt," says Robert Shireman of the project. Community college officials say their annual tuition, averaging $2,361 last year, is low enough that students can pay it without taking on unnecessary debt, says David Baime, spokesman for the American Association of Community Colleges.
