NC lawmakers okay federal loan opt-out for community colleges

A bill that would allow community colleges to decline to offer low-cost federal student loans is on its way to the governor’s desk. House Bill 7 won final approval from the Senate tonight on a party-line vote.

The Senate had already passed its own version of the legislation, but both sides were more than happy to repeat their earlier arguments.

The measure would reverse a bill passed last session requiring community colleges to offer the loans. Some schools had complained about the mandate, saying there wasn’t enough local demand for the loans to justify the administrative overhead needed to provide them.

Republicans argued local school officials are best suited to decide what their communities need. “It’s obviously been a concern for some of them, and we felt like if it was a concern, we needed to give them that option,” said Senate Majority Leader Harry Brown, R-Onslow.

“I think if community colleges see it as a viable program, they’ll accept the program and opt in,” Brown added. “If they do decide to opt out and find out they’ve made a mistake, they still have an option in the bill to opt back in. So we’ve given them that flexibility.”

Democrats argued that community college students without access to low-cost federal loans would be forced to borrow money at much higher rates from private banks or even credit cards.

“This isn’t about a handout. This is about a loan that you repay,” said Senate Minority Leader Martin Nesbitt, D-Buncombe.

Nesbitt said 30,000 people went to his county’s community colleges last year. “This is where all your people are going to get an education. They’re getting to where they can’t afford the university system.” He said the measure would make it harder for displaced workers to pay for retraining for new jobs.

The measure is now headed to the desk of Governor Bev Perdue, who has not yet indicated whether she’ll sign it.