State lawmakers say schools shouldn't have to offer loans

Posted March 8, 2011

Raleigh, N.C.  House lawmakers voted Tuesday to approve a measure that lets community colleges decide whether to offer low-cost direct federal loans, known as Ford Loans, to students.

House Bill 7 reverses a measure passed in 2010 that required schools to offer the loans, setting aside money to pay for financial aid counselors to help students get and manage them.

Not all schools want to offer Ford loans. Some officials say they're too easy to get, and they're concerned the schools could ultimately be held accountable for students who default on them. Other school officials say there’s not enough demand for the loans, which carry some of the lowest interest rates available anywhere. They say other types of student aid, like Pell Grants, can cover students’ needs.

Rep. Dan Ingle, R-Alamance, who sponsored the bill, says officials at his local community college don’t want the direct loan program, and they have a lot of company.

“When you have 38 out of the 58 community colleges saying, ‘We don’t want to participate in this program,’ they should have that choice,” Ingle said.

Rep. George Cleveland, R-Onslow, went even further, calling the requirement an “infringement on community colleges.” Rep. Nelson Dollar, R-Wake, noted that the measure doesn’t force community colleges to drop the loan program – it just gives them that option.

Rep. Ray Rapp, D-Madison, warned the measure would deny access to affordable student loans for about 177,000 community college students in North Carolina. He argued that high school students and unemployed adults face “staggering” odds against getting a bank loan for school.

“They’re putting it on their credit cards – their credit cards – at 15 percent to 20 percent interest rates, some higher,” Rapp said.

Rep. Alma Adams, D-Guilford, said it would hurt jobless students coming back to school to learn new skills.

"We continue to talk about bringing jobs to North Carolina, attracting employers,” Adams said. “If we’re real serious about that, then we have to be concerned about a skilled work force.”

Rep. Deborah Ross, D-Wake, said the only people who will benefit from the bill are “loan sharks, payday lenders – all the folks who’re going to get the business of the people who can’t get lower rate loans in a respectable way.”

Rep. Angela Bryant, D-Nash, wondered aloud if the push for the bill came from banks trying to get rid of government competition.

Republicans say it's a matter of local control, and schools who want to keep the loans can do so. The bill would let each school’s trustees decide whether to offer the loans.

Rep. Frank Iler, R-Brunswick, is on the Board of Trustees at Brunswick Community College. He said his school is “fortunate” to have strong development and fundraising efforts, but other schools may not.

"We should trust them to know what’s best for their particular students, their particular campus,” Iler said. “If anyone came to us and said we really need this, I guarantee you we’d be voting for it.”

The measure passed on a mostly party-line vote, with two Democrats joining Republicans in support of it. It now moves on to the Senate, where an identical bill is already being debated.


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  • whatusay Mar 9, 2011

    These loans are from the Federal Government. The community colleges don't want to get into the business of administering them for the federal government. The federal government will hold the community colleges responsible for anyone who refuses to pay the loans back. Who needs another headache created by government?

  • whatusay Mar 9, 2011

    fred flinstone, this is a democrat program. Obama started this about 6-8 months ago. You know if it's anything with giving money and not expecting it to be paid back, it's a democrat idea.

  • daisy Mar 9, 2011

    My husband attends college using student loans. He first wanted to attend a smaller community college so he would not feel overwhelmed going back to school for the first time. He was so disappointed to find out that Robeson Community College did not offer student loans as an option. They only work with students qualifying for grants and scholarships.

    We are a working family and didn't qualify for any grants. He is enrolled at FTCC where they do offer student loans.

    He is doing great, btw. I think Community Colleges across the state should be required to offer the same choices. Let the students have options instead of limitations.

  • tao90 Mar 9, 2011

    As a college student, I certainly hope House Bill 7 is killed.
    These republicans don't care about students. I agree with Ms.Ross (Wake) and thinking it's more about profit on behalf of lenders and loaners.

  • mep Mar 9, 2011

    Default rates among CC is higher than regular colleges.... and now that the Federal govt is holding much of the student loan money, with strings attached to the school, it only makes sense that CC have the right to deny students the option of obtaining these loans... knowing if they default, it will be the CC that may end up suffering.

  • artist Mar 9, 2011

    Makes perfect sense.

    Can you ONLY get the loans from the CC you are planning on attending?

    If not - then what are we arguing about?

    Not another " I am going to force you to do something that you do not want to do... and will cost you in the end" scenario?

    Geez..... we will never agree on anything again.

  • Tax Man Mar 9, 2011

    Why can't they just make these Ford loans available from the State Department of Education - one stop, one shop? Get the Community College out of the loop and allow non-profit groups like handle the loan applications. Don't punish the students, but don't make the CC have to administer them.