For high school students who are on the hunt for ways to reduce the cost of a college education, your local community college may look like a way to keep your expenses down and avoid the crush of debt from school loans.
In fact, many financial advisers recommend that, if you’re a cost-conscious student, you complete your first two years at a community college before transferring to a four-year university to receive your degree, as a way of cutting college costs by as much as half and minimizing your need for college loans.
Community colleges almost universally have annual tuition rates well below those of four-year colleges and universities, so at first blush, the two-year route may seem like a natural choice in terms of cost management and college loan debt relief.
As it turns out however, community college students are among those students most likely to struggle with college loan debt and to default on their federal student loans.
According to the most recent data from the U.S. Department of Education, 10.1 percent of community college students who are carrying federal education loans end up defaulting on their loans within the first two years of repayment – more than twice as much as the 4.4 percent of borrowing students at public four-year universities and 3.8 percent of borrowing students at private four-year universities.
Broadening the scope to look at student loan delinquencies in addition to defaults – since late payments, and not just a complete absence of payments, also indicate a struggle with the repayment of debt – the potential for trouble among community college borrowers is even higher: A whopping 60 percent of community college students will either default or become delinquent (without defaulting) on their college loans, according to a new report released by the Institute for Higher Education Policy. Read the rest of this entry »
