Banks Hate Junior Colleges

[cashlenders]

by Jasmine Marie Clair
Published: June 6, 2008

Banks are taking their loans away from smaller universities and two year institutions. They feel that students at these schools pose higher credit risks than the students at more prestigious and expensive four year schools.

Citibank, JP Morgan, and Sun Trust are just a few of many banks looking to cut off a portion of their student loan recipients. However, if credit is sincerely a concern, banks should base their lending decisions on the individual and not on the school as a whole.

The banks arguments aren’t adding up. Such risks are questionable despite the credit crunch that the nation’s facing. Student loans are backed 95 percent by the federal government, so the losses that a bank may take aren’t significant enough to deny an entire group of people access to their loans.

This is yet another way for banks to discriminate against Americans living within the lower socioeconomic stratum of society. Working class citizens who are unable to become full time students often attend two year schools part time while working full time. They rely on such loans to make this possible.

The banks’ efforts will make it more difficult for students to achieve higher levels of education. This will trickle down to a larger scale problem by also making it more difficult for Americans to compete with global competitors such as China and Russia.

Education should not be a reward for those who can afford it. It should be available to all, and students need to have access to funding regardless of what institution they choose to go to.

Not to mention, these acts undermine one of America’s core values of class mobility. The banks’ decision to grant upper echelon schools a monopoly on loans undermines the lower class’ ability to pull themselves up by the boot straps, unless of course they are fortunate enough to attend a dour year institution and take on a huge amount of debt from the banks in the process.