Written by:
Will Pickering

Credit Crunch Felt at For-Profit Colleges

Without a doubt, the economic crisis bodes ill for the lending industry. But how has this affected students in need of loans to pay for college? Students attending non-profit colleges often receive most of their financial aid from federal grant and aid programs, and Department of Education has committed to keeping these programs in place. Students at career-oriented, for-profit colleges, on the other hand, use private lenders to finance a greater portion of their education. As a result, these students are feeling the crunch the most, and members of Congress, whose concerns are centered much more on traditional schools, are turning a deaf ear. Here's what InsideHigherEd.com had to say about the issue:

Those facts -- that the credit squeeze has so far been relegated to private loans and to career colleges -- have created a situation in which the credit crunch has become a major cause of concern for the loan industry and for the for-profit higher education sector (which are pressuring Congress and the Education Department to act to ease it) but largely played down by many traditional college officials, advocates for students, and the generally Democratic politicians with whom they are traditionally aligned.

The idea . . . that the credit crunch isn't a major problem because it is affecting mostly students at for-profit colleges, and should actually prod students who take out costly private loans at for-profit schools to enroll instead in community colleges or other lower-cost institutions -- has been a subtext of some of the discussion surrounding the credit crunch, and reveal just how differently the crisis is perceived in various quarters.

Check out the full article here.