For the first time in nearly two decades, Central Virginia Community College students can receive federal student loans to help fund their education.
Starting this fall, CVCC students can qualify to receive thousands of dollars in federal student loans, said Deborah Marshall, CVCC’s director of financial aid.
The initiative was spearheaded by CVCC president John Capps, who made it a top priority after taking office in March. Capps said the goal is to boost enrollment during a time when tuition increases are causing “many students to get squeezed out of a higher education.”
CVCC tuition will increase by 8.7 percent this fall, bringing the tab for in-state students taking a full load of classes to about $3,705 for two semesters.
CVCC dropped the federal student loan program in 1992, when reforms to the Higher Education Act put the school in jeopardy of losing valuable federal funding, said Marshall.
Under the 1992 law, if CVCC’s default rate stayed at or above its 1992 level of 27 percent, the school would lose eligibility for the popular Pell grant program, Marshall said. For CVCC, losing Pell grants would have been a major blow to the area’s neediest students.
“We did not want to be in that boat, so we decided to opt out of the loan program,” Marshall said.
Pell grants long have been a centerpiece of CVCC’s financial aid program. Last year, for example, CVCC awarded $7.9 million in financial aid, with about $6 million coming from Pell grants.
The federal loan program is expected to benefit middle- and high-income students who do not qualify for Pell grants, Marshall said.
“Every year, we had a number of students that are not eligible for the grants,” Marshall said. “The next question they ask is, ‘How can I get a student loan?’ We have to tell them we don’t offer student loans, and they walk out the door.”
Since the program was announced last month, CVCC’s financial aid office has been swamped with between 10 and 20 new loan applications each day, Marshall said.
Federal loans tend to have lower interest rates and more flexible repayment options than private borrowing options for students.
CVCC plans to launch a default prevention program to help students manage their debt. As before, CVCC must keep its loan default rate below 25 percent to ensure its students remain eligible for Pell grants.
Ultimately, CVCC officials hope the federal loan program will boost enrollment and increase the school’s percentage of full-time students. Currently, the vast majority of CVCC students — about 70 percent — take classes part-time.
“If we can move more students from part-time to full-time status, it increases their chances for success and speeds up the time it takes to get their degree,” Capps said.
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