An advocacy group has recently released its findings on a study conducted revealing that at least one million college students from community colleges are denied access to federally-funded student loans. This is because the institutions they belong are not participating in activities and programs of the federal. The Project on Student Debt, a non-profit organization said one out of 10 students in a community college has no access to federal loans that makes them look for available options just to go to college and continue their studies. As a result, many students have resorted to the difficult and risky stages of borrowing money from private loan companies. Worst, other students are forced to drop from school as they also do not qualify from private companies student loan requirements. Colleges that are not participating in the loan program of the federal urged their students to seek help from other alternative sources if they needed money to finance their education. John Williams, financial aid director of the Mississippi Delta College said their school is using the Pell funds to help cover low tuition fees of the college. Williams added that Pell Grants is more than enough to help their students.

The study also revealed that among the reasons why many colleges are not participating in the federal student loans is the existence of the Pell Grants. The institutions feared that if their students cannot repay their loans the school would be sanctioned and would eventually stop receiving aid from the federal. Meanwhile, while community colleges students are denied access to the federal loans, there are also institutions that are largely benefiting from the program. In Montana alone, over 95 percent of the students in white community colleges have accessed the federal student loans. In Tennessee there were only 13 percent of the students in white community that lack access to the loans offered by the federal while there are also black students that number about 55 percent that were denied access. Many schools look this as racial discrimination brought about by the unequal distribution of loans between the black and white students. Some states are also reported to be denied access to the federally-funded student loans. In Georgia at least 60 percent of the students in community colleges do not qualify for the same loan as well as half of the population of students in Alabama.