Banks Cut Colleges Eligible for Student Loans

Students at 2-year, non-elite 4-year schools left in the lurch
By Jim O'Neill,  Newser User
Posted Jun 2, 2008 8:09 AM CDT
Graphic shows highest percentage of community college students by state without accsess to federal loans.   (AP Photo)
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(Newser) – Students at 2-year and some less competitive 4-year colleges will be having a tougher time finding loans as banks trim the list of colleges they serve, reports the New York Times. In a move that potentially shuts out some of the neediest students, Citibank, JPMorgan, PNC, and SunTrust all say they have cut back their eligible institutions, focusing on upper-tier schools whose students generally borrow more and default less.

More than 40% of high school graduates spend time at community colleges, about one-third use loans to help matriculate, the Times notes. The credit turmoil has prompted some banks to drop student loans entirely; other lenders, including Sallie Mae and Nelnet, say they’ll continue to loan to students at any institution.