Banks ignore some community colleges
Banks are reportedly passing over some community colleges loans, making it difficult for those students to pay. Nancy Marshall Genzer reports why these banks may be shooting themselves in the foot.
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Scott Jagow: The New York Times has a very interesting story this morning about student loans. The paper says banks are ignoring some community colleges and lesser-known universities all together. So that means their students will have a tougher time getting money for their education. More now from Nancy Marshall Genzer.
Nancy Marshall Genzer: The banks look at future earning power and default rates when deciding whether to made a student loan.
Standard and Poor’s chief economist David Wyss says too often, students at less-selective colleges default.
David Wyss: And then because of personal problems, job problems, because they don’t complete the programs, they can’t pay the money back.
Susan Mead: I don’t agree with that statement.
Susan Mead is the financial aid director at Dutchess Community College in Poughkeepsie, New York:
Mead: Our default rate is approximately right now about 9 percent. So that’s nine students out of a hundred who may be having difficulty repaying their loans.
Mead says banks are shooting themselves in the foot, because the very students they’re rejecting now feed into the four-year colleges the banks want to lend to.
In Washington, I’m Nancy Marshall Genzer for Marketplace.