Financial speculation's latest victims: US community college students

This reduction in student lending has been based on profit considerations rather than the needs of the 46 percent of all US undergraduates who attend community colleges. It takes place amidst increasing economic distress and calls for community colleges to play a greater role in preparing young people and laid off workers for the job market, underscoring the fact that everything, even education, is fair game for financial speculation.

The credit crisis has made raising money more difficult for lenders. In order to maintain profit margins, Citibankwhich has stopped making loans to students at all California community collegesJP Morgan, Chase, PNC, and SunTrust have begun either dropping loans to community college students altogether or selectively dropping loans at certain colleges. Meanwhile, these same banks continue to provide federally backed loans to students at the nations leading universities.

The banks are making no attempt to disguise the motives behind their actions. In a June 2 New York Times article, entitled Student Loans Start to Bypass 2-Year Colleges, Mark C. Rogers, a spokesman for Citibank, said the bank temporarily suspended lending at schools which tend to have loans with lower balances and shorter periods over which we earn interest. According to the article, banks say, their decisions are based on an analysis of which colleges have higher default rates, low numbers of borrowers and small loan amounts that make the business less profitable.

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