by Bryce Q. Jarwoski

The evidence is that banks are forcing a split in college education by reducing the availability of student loans to some students, based on what college they attend. In the current financial crisis, the major banks have cut back the number of colleges they supply loans to and the ones that have been dropped are community colleges.

The reason behind the decision of the financial institutions is the current global credit crisis. Because it is harder to raise money, the banks do not have the funds to lend and so they have to cut down on the loans they offer.

On a brighter note, there are other lenders who claim they will continue to offer loans to all college students. Companies such as Nelnet and Sallie Mae have recently committed to continuing with the Federal government backed scheme and will lend to students attending any college. This is good news for those attending community colleges.

For students looking at different types of student loans, the best option is the federal scheme. These are low interest loans that offer interest fixed and paid for by the government for the duration of your course. These federal loans are available to all college students, attending any college, from any background, with any credit history.

So why, therefore, are community college students unable to get a federal government backed loan? It appears that numerous community colleges do not participate in the scheme and so the students at these colleges cannot get a federal student loan. The students have to rely on expensive private loans and credit cards to pay for their college education - and they are usually the students who are least able to afford this.

Lenders claim that community college students have a greater risk potential; but instead of denying them cheaper federal loans and possibly creating a greater debt problem by forcing them to find alternative funding, the schools should offer guidance in repayment options, to make federal loans a safe option for lenders.

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