LAKE COUNTY, Calif. – The Yuba Community College District is suspending participation in the Federal Student Loan Program program in response to a high default rate on education loans by former students.
The program suspension goes into effect this fall at the district’s campuses, including Yuba College and Woodland Community College.
The decision by the college and its board of trustees to suspend the Federal Student Loan Program was made in an effort to protect the availability of future federal financial aid, the district said.
The U.S. Department of Education’s policy would be to revoke a college’s ability to participate in any federal financial aid program, including Pell Grants, FSEOG and Federal Work Study, because of excessive default rates.
The board’s action to suspend federal student loans will protect all federal student aid, including Pell Grant, meaning that eligible students will still be able to receive all federal grants as well as State Cal Grants, the district reported.
Only 236 Yuba College students and 39 Woodland Community College students participated in the Federal Student Loan program in 2012-13, whereas 5,270 Yuba College students and 1,560 Woodland Community College students received other forms of federal and state financial aid, totaling more than $33,000,000.
Yuba College's draft default rate for former students currently exceeds federal limits. Should the district’s colleges lose eligibility to participate in federal financial aid programs, thousands of students would be turned away.
College administrators will assist students who rely on the Federal Student Loan Program to identify alternative financial aid solutions.
The board of trustees has formed a committee to assess its decision through data analysis for future years.