The University of Arkansas Community College at Hope is getting out of the sole student loan program which it operates.
UACCH Vice Chancellor for Student Affairs Bobby James recently advised the UACCH Board of Visitors of the administrative decision to no longer offer the William D. Ford Direct Student Loan Program at UACCH. The decision stems from growing pressure exerted by federal regulations concerning allowable loan default rates, James said.
He said that violation of the threshold for default rates will now jeopardize all federal funding for a college campus.
“We felt like we would be jeopardizing a much greater portion of the student body,” James said. “Most of our students are not dependent upon the federal student loan program.”
Students seeking financial aid through the FDSL program must complete what is known as the Free Direct Student Loan Application, the primary paperwork for Pell Grants, under the federal student loan system. Students attending UACCH under the FDSL program must apply each year to obtain loan funding for that specific academic year. And, high school seniors who intend to seek student loans should begin in the spring semester prior to entering college to apply for FDSL funds.
James has said that the reductions in the growth of allowable default rates within a three-year period under the new rule means that UACCH had to choose between the significant portion of UACCH students receiving Pell Grants and the fewer than 100 who participated in the FDSL. And, while less than five percent of FDSL students are in danger of default, James said that was enough to brush the threshold within the new federal guidelines.
“We studied it long and hard before making a decision,” he said.