Student loan debt isn’t just the responsibility of the recently graduated high-school senior hoping to earn that degree in comparative woodworking — as more colleges are discovering.
This story from WFMZ.com specifically deals with a Pennsylvanian community college — but we can extrapolate a wider scope from what at first blush seems a local issue.
Lehigh Carbon Community College is anticipating a bad-debt line-item on its budget of $300,000. (p.s.: It anticipated $275,000 in bad debt last year, but had to revise that amount to $300,000 — so in actuality that $300,000 for this year could simply be a placeholder for a bigger number.)
It also believes that it will have $350,000 in bad debt on the books for 2013. (Though, refer back to that p.s. above.)
Part of the explanation? Students. (Isn’t it always?)
According to LCCC president Donald Snyder, about half of LCCC’s 8,000 students get federal grants or loans, totaling about $21 million a year. But the kicker? If those students who applied for and are receiving federal aid stop attending classes (for whatever reason: maybe tuition costs that are still too expensive; maybe the band is totally getting back together), LCCC is required to repay that money –- usually grants — to the government “even though we have nothing to do with how much money they got.”
LCCC does attempt to recover that money from the student, first internally through letters; then, by turning the debts over to a collection agency. But still: at the end of each year LCCC is left with over a quarter of a million in bad debt on its books.
And that number, as we saw earlier, isn’t getting smaller.