College loans

Some of the nation's largest lending institutions will no longer make student loans available to community college students who could find it more costly and more difficult to finance their studies.

Uncertainty in the student loan business and the credit crisis have been cited as reasons for cutting back on lending to students enrolled in two-year colleges. The banks say the smaller loans to community colleges are not as profitable. Thus far, only four or five have done so, but the worry is that other lenders may follow suit and further restrict access to low-cost financial aid.

It is unclear how many of the 6.2 million two-year college students will be affected. They account for nearly 40 percent of all undergraduates, and the College Board reported that nearly one-third of community college graduates have taken out loans.

Financial aid will still be available, but at a higher cost through private loans. The federally guaranteed loans come with a maximum interest rate of 6.8 percent and payment is deferred until after graduation. Private loans will likely carry higher interest rates. It also means more than one payment, which can be harder to make.

Yet lower costs are a leading reason why students choose a more affordable two-year college over that of a four-year institution. Now that avenue may close to some students unable to find alternative funding.