The New York Times reports that students who choose to attend our two-year colleges are going to have a tougher time finding financial aid:
Some of the nation’s biggest banks have closed their doors to students at community colleges, for-profit universities and other less competitive institutions, even as they continue to extend federally backed loans to students at the nation’s top universities.
The article goes on to mention that Citibank, among others, has dropped many two-year colleges. Why?
Mark C. Rodgers, a spokesman for Citibank, which lends through its Student Loan Corporation unit, said the bank had “temporarily suspended lending at schools which tend to have loans with lower balances and shorter periods over which we earn interest.”
We’re talking about student loans, here – government subsidized and guaranteed. Citibank is whining, apparently, that two-year students are just too good at repaying their loans (“shorter periods”), so Citibank doesn’t make quite as much easy money off them.
Perhaps Congress should step in and make it so that banks either lend to all eligible students, or they get to lend to none of them. Why should we taxpayers take on risk for Citibank and then allow them to cherry-pick loans for maximum profit?
Full disclosure: I teach at a two-year college.