Hundreds of thousands of poor students could be deprived of an education at trade and technical schools, community colleges and even four-year universities under provisions in the budget plan Congress sent to President Bush, educators say.
The five-year, $490 billion deficit-reduction package, passed by Congress on Oct. 27, slices some $1.7 billion out of the most popular federal student loan program by creating rigid restrictions aimed at educational institutions whose students have high loan default rates.For the next two years, any school with a default rate of above 35 percent will be barred from all federal student loan programs, with the default rate cutoff dropping to 30 percent for 1993 and beyond.
The congressional action was spurred by concern over high default rates at some educational institutions.
About 300,000 students nationwide will lose eligibility for guaranteed federal student loans, but just 50,000 of those will come from traditional four-year colleges and community colleges, according to the National Association of Trade and Technical Schools.
Stephen Blair, the association's president, predicted that about 10 percent of the nation's approximately 4,000 trade schools, particularly those in inner cities, could be forced to close because of financial losses caused by the loan rollback due to high default rates.