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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 reason the banks have had to curtail their student loan numbers is the current difficulty in raising money for lending. Because they cannot raise funds to the same degree as before the credit crisis, they do not have the money to lend.

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.

By far the best option for student loans is the federal student loan scheme. These loans have low fees, low interest that is fixed and is paid while you are studying. These government backed loans are available to all students regardless of their background or credit rating, and not dependent on the college they attend.

If this is so, then why are some community college students unable to get one of these student loans? It appears that there are some colleges that do not participate in the scheme, and this disqualifies the students from the loans. These students are forced to resort to other, more expensive, methods of finding money to pay for their college education - and they are often the ones who least can 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.