EUGENE, Ore. — Lane Community College is facing a possibility of losing federal funding, after a high percentage of students defaulted on their loans.
LCC officials say more than 30 percent of students who started repaying their loans in the 2010 fiscal year defaulted within the first three years. Preliminary numbers for 2011 don’t look much better, but the school says it’s doing everything it can to improve it.
LCC student Sara Shepherd was the first in her family, and not something she wanted to be a first to do.
“The first one in my family to have to take loans and they all have masters and PhD’s. I’m in community college and I’m taking loans,” Shepherd said.
LCC administrators say more than 70 percent of its students rely on financial aid to pay for school; but that resource could soon be gone, after statistics from the 2010 fiscal year showed over 30 percent of borrowers who started repaying that year defaulted on them within three years.
“Frustrated, knowing that students have to take loans in the first place and they can’t even afford it later,” Shepherd said.
“Because schools are held responsible for their default rates, if our default rates exceed 30 percent for three consecutive years, we essentially lose the ability to give financial aid to any student at Lane. So it’s really important we bring that rate down and we keep it down,” said Helen Faith, LCC Director of Financial Aid.
Faith says the down economy was a driving factor behind the problem; but because so many students rely on financial aid, they’re working hard to bring the default rate down.
“If we were to lose the ability to give financial aid to those students, we would lose most of our students, the vast majority of our students,” Faith said.
“I definitely have concern. We’re talking about tuition raising, which isn’t going to help the situation anymore. Lane is going to shut down if we don’t have financial aid here,” Shepherd said.
With preliminary numbers showing not much of an improvement for the 2011 fiscal year, Faith says they’ve already come up with ways to help educate students on loans.
“What I’ve noticed is that students are more aware of their student loan debt than ever before and that can only be beneficial,” Faith said.
“I’m not going to default on my loans. I’m working hard, but it is stressful to have that burden on my shoulder every day,” Shepherd said.
Students say they are also concerned because tuition is increasing next year, which they believe is going to lead them to taking out more loans.
LCC says they don’t believe they’re going to hit 30 percent for three straight years, which is going to help those who rely on loans.