- Fearing sanctions from rising student loan defaults, some California community colleges have cut off federal loan options for students.
- Around 16 schools have ceased federal loan disbursement, with at least one more considering an end to its participation.
- According to advocacy groups, the schools are exaggerating the risks while pushing students toward unnecessary, riskier and more expensive borrowing options.
From the article:
A small but growing number of California community colleges have stopped participating in the federal loan program, cutting off these borrowing options for students out of fear that rising student loan default rates could lead to sanctions. ...