Bakersfield College will no longer offer federal loans to its students starting next year. That is because a high percentage of students don't pay them back.
Gonzalo Encisco took out a $1,600 student loan two years ago when he enrolled at Bakersfield College. He said without it, he would not graduate next year. "You have two worlds. You either work or you go to school and it's hard to put them together," said Gonzalo Encisco.
For Samantha Imhoof-Tran, a mother of three, a federal loan is helping her graduate early from Bakersfield College. "That's what paid for a lot of things I needed. If I didn't have it, I wouldn't have been able to go to school," said Samantha Imhoof-Tran.
The number of Bakersfield College students using federal loans has skyrocketed 370% in the last five years. In 2007, 500 of them picked up nearly $2 million. Last year, 1,850 students received close to $6 million.
"The number of students getting loans is increasing. The amount of those loans is increasing and that default rate is increasing," said Amber Chiang, Bakersfield College.
In 2010, 27% of Bakersfield College students defaulted on their federal loans. If that number hit 30%, it would jeopardize financial aid for all other Bakersfield College students.
"It was kind of one of those concepts, cut the problem short, cut it now before it makes a much larger problem for the college. We could lose all of our aid and that's not something the college is willing to risk," continued Chiang.
The Institute for College Access and Success, an non-profit based in Oakland that works to make higher education more affordable is calling the decision premature.
"We see no evidence to suggest BC would be sanctioned. We don't want students to need to borrow and instead turn to riskier forms of debt like private loans or credit cards, work excessive hours, cut back on the amount of credits they are taking or drop out," said Laura Szabo-Kubitz.
Bakersfield College is part of a growing trend.17 out of 117 community colleges in california no longer offer federal student loans.
