Community colleges take action

DENVER - The president of the Colorado Community College System sent letters to all 13 campuses outlining her concerns and what her staff has been doing to make sure students have money even if the financial aid system comes to a halt.

"I think it's really important that we get ahead of this game, especially for the fall of 2008 enrollment," said Dr. Nancy McCallin, president of the Colorado Community College System. "I've been a practicing economist since 1981 and I have never seen a credit crunch of the magnitude we're experiencing right now."

McCallin says the home mortgage crisis is forcing lenders to also back out of the student loan business because it's all causing them to lose money. Now, the biggest student loan provider, Sallie Mae, has announced that it's losing too much money, forcing it to consider getting out of the financial aid business.

"Sallie Mae is a big concern and their ability to issue loans is a big concern," said McCallin.

It's all a big concern for students like Sharyn Montgomery. Montgomery is a single mom putting herself through school at the Community College of Denver. She says she doesn't need any more worries.

"Because it's already hard enough to get loans and scholarships as it is, but if the main part of it falls out, then that's really gonna be extremely hard for us," said Montgomery.

McCallin says she and her staff are preparing for a worst-case scenario. Over the past two month, they've been contacting other banks to make sure that no matter what happens, especially to Sallie Mae, there's enough money to support many of their 118,000 students system wide.

"In order to assure that we have as many options available to our students, we've been reaching out to banks across the country and within Colorado," said McCallin.

McCallin says she's gotten enough responses from banks to feel confident her students can weather the storm.

"I think that's good," said Montgomery. "They should keep that up, otherwise, they're gonna lose a lot of students because they're not gonna be able to provide them with the financial aid that they need."

In Washington D.C., lawmakers are working to fix the problem. Thursday, the House of Representatives passed a bill which would allow the U.S. Treasury Department to guarantee student loans if need be. That bill is now headed to the Senate.

Montgomery hopes it all works out.

"Food is rising. Gas is sky high. You know, you have to have an education to be able to make it, otherwise you'll be stuck," said Montgomery.