The federal budget approved Friday could ease the threat that students at a community college based in Harlan County will lose access to federal education aid.
The bill includes a provision that will help Southeast Kentucky Community and Technical College appeal to the Department of Education in order to keep taking part in financial aid programs, according to Senate Majority Leader Mitch McConnell, who put the measure in the budget.
The loan-default rate among former Southeast students topped 30 percent in the three most recent years with complete figures, putting the college at risk of losing access to federal loans and grants for students.
For instance, 33.6 percent of former Southeast students who borrowed money and became subject to repayment defaulted in the 2014-2017 period, said Doug Cleary, system director of financial aid for the Kentucky Community and Technical College System.
The measure approved in the budget would give the U.S. Department of Education greater flexibility to consider economic conditions in deciding whether schools with high default rates can continue participating in aid programs, McConnell said in a news release.
The measure is narrowly tailored to public colleges in communities that rank in the bottom 5 percent of U.S. counties economically, according to the Washington Post.
Southeast’s main campus is in Harlan County, where the economy has been battered by a sharp downturn in coal jobs since 2012.
Of 3,113 counties in the U.S., Harlan County ranks 3,097 in a comparison of per capita market income, unemployment and poverty rate, according to calculations by the Appalachian Region Commission.
Southeast also has campuses in Bell and Letcher counties.
KCTCS officials said Friday they had not seen the provision, but Vic Adams, president of Southeast, said officials are grateful for McConnell’s support “and remain hopeful that a resolution can be found to this difficult circumstance.”
The Washington Post reported that some experts are leery of the loan-default measurement, in part because it doesn’t gauge whether borrowers are struggling to repay, and that community colleges don’t like it because defaults by a relatively small number of former students can skew their rate.
Southeast has an enrollment of about 3,200. Of former students liable for repayment from 2014 through 2017, 247 defaulted, Cleary said.
McConnell said Friday that Southeast provides opportunities to students who might have no other access to higher education, and faces factors that many community and technical colleges don’t.
“If students and graduates are unable to find jobs in hard-hit regions, they are unable to pay off their loans and not everyone can afford to move to a different region to pursue higher education or to find a job upon graduation,” McConnell said.
That is especially true in “high-immobility and high-poverty communities” such as Eastern Kentucky, McConnell said.
“Economic factors, such as these, are outside of the control of the schools in that region which are simply trying to help students succeed,” the senator said.
Gloria McCall, a vice president in the Kentucky Community and Technical College System, said Southeast and other colleges work to teach students financial management, and has a vendor that tries to boost loan repayment rates among former students.
“It would be a very, very hard challenge” for Southeast to survive without access to federal financial aid, McCall said.