In the News: Skipping Free College and Federal Loans

Some California community colleges are turning down funds offered by the state that would make the first year of community college free for many students, Ashley A. Smith reports in Inside Higher Ed.

That’s because the program comes with a requirement that the community colleges also participate in the federal student loan program, and some college administrators do not want to offer federal student loans. These administrators believe that students may end up burdened by heavy amounts of debt and they also worry that high student loan default rates could jeopardize the college’s federal funding, Smith reports.

However, a new study finds that community college students who do take out student loans get better grades, earn more credits, and are more likely to transfer to four-year colleges than students who do not take out student loans.

The authors of the study conclude:

Student debt, widely considered a burden, may help facilitate success for students, especially those who lack other resources that could be used to cover costs associated with college attendance.

The study, “The Benefits of Borrowing,” by Benjamin M. Marx and Lesley J. Turner, appears in the Winter 2019 issue of EdNext.

— Education Next

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