SANTA MARIA, Calif. - Thousands of college students are losing a way to pay for their education. Several California community colleges have ended taking part in the federal loan program, which is contingent on each school staying under a certain default rate.
Robert Parisi, Allan Hancock Dean of Student Services says, "You kick over that, they can say, you're out of federal Pell Grant program, you're out of the state Cal Grant Program, you're out of the federal SEOG programs and all that gets wiped out."
So rather than have that potentially occur, some colleges are taking a preventative measure.
"For some schools, their proactive way is rather than put anybody at that risk, they say let's just withdraw from the programs."
Due to its current default rate, more than 30 percent over the past 3 years, Hancock is at risk for losing its access to financial aid terminated, but Hancock is not pulling out of the loan program like the 16 other colleges that have.
Parisi adds,"Our default rate looks high, but when you look at the actual number of students who are defaulting, it's extremely small.They would say you are eligible for an appeal and I'm 99 percent sure they would grant it."
Only 200 out of more than 9000 students at Hancock received a federal loan last year.
According to Parisi, "We're trying to do a lot of proactive things with students to make them think about what they're doing before they take out that loan."
In addition to Allan Hancock, which is staying in the federal loan program, so is Cuesta College and Santa Barbara City College.
The nearest schools to withdraw from it-- are Oxnard and Taft colleges.
Wednesday, June 5 2013 5:40 PM EDT2013-06-05 21:40:27 GMT
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