Banks Cut Colleges Eligible for Student Loans

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. (More credit market chaos stories.)