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Obtaining a student loan for students at community colleges may have just become harder. In the current financial climate, the biggest banks in the country have reduced the colleges on their eligibility listings for student loans. Unfortunately, most of those removed are community colleges. It would appear that students attending the more expensive and elite colleges will still be able to get a student loan, but those attending community colleges will not. College education is being split into levels by this policy.

The real reason behind the decision by leading banks to stop offering student loans is the current financial crisis. It is simply much harder for lending institutions to raise the money themselves, so they do not have the funds to lend and they have had to cut back.

On a brighter note, there are other lenders who claim they will continue to offer loans to all college students. Companies such as Nelnet and Sallie Mae have recently committed to continuing with the Federal government backed scheme and will lend to students attending any college. This is good news for those attending community colleges.

For students looking at different types of student loans, the best option is the federal scheme. These are low interest loans that offer interest fixed and paid for by the government for the duration of your course. These federal loans are available to all college students, attending any college, from any background, with any credit history.

So why, therefore, are community college students unable to get a federal government backed loan? It appears that numerous community colleges do not participate in the scheme and so the students at these colleges cannot get a federal student loan. The students have to rely on expensive private loans and credit cards to pay for their college education - and they are usually the students who are least able to afford this.

Lending institutions will claim that students attending community colleges present a greater risk of defaulting on the loan, and can probably prove this. Instead of forcing these students into greater debt by not allowing them a cheap federal student loan, the colleges need to educate the students on responsible borrowing. This would make the scheme more attractive to lenders.