CCC&TI's loan default rate could still rise
Caldwell Community College and Technical Institute chose not to process federal student loans this fall because its students' default rate was getting dangerously high.
But despite the fact that the college is no longer “in the loan business,” as CCC&TI President Ken Boham often says, CCC&TI’s default rate could continue to rise – at least for a while.
And that means that the college's eligibility for Pell Grants, which have been used by more CCC&TI students than loans were, is still in jeopardy.
In 2011, the default rate of CCC&TI students was 20.3 percent, up from 10.6 percent in 2010. Colleges that reach a 30-percent default rate for two years or a 25-percent default rate for three years risk losing eligibility to offer federal student loans and Pell Grants.
Caldwell students’ default rate was climbing, getting closer to the level that would trigger the college losing eligibility for Pell Grants, need-based federal grants that are used by more CCC&TI students than are federal loans.
Students were still able take out loans for their courses this past summer. Those new loans, as well as loans taken out in prior semesters, could still go into default if the students can't keep up the payments.
“We’re still on the hook, and that number could rise,” Boham said at the Board of Trustees’ Wednesday meeting. “Our concern is not to hit that (25- or 30-percent default rate), because if we do, we’re in trouble.”
CCC&TI still accepts private student loans and offers other forms of financial aid to students, including grants, scholarships and student-assistance programs.