Banks culling certain colleges from loans

NEW YORK, June 2 (UPI) -- Several large banks in the student loan business are cutting specific colleges off from lending to their students, bank and college officials said.

The students most often hurt by the profit-oriented decisions are those in community colleges or less than elite private schools, The New York Times reported Monday.

Citibank has "temporarily suspended lending at schools which tend to have loans with lower balances and shorter periods over which we can earn interest," bank spokesman Mark Rodgers said.

Some are shocked by bankers selecting out certain schools on government-backed loans.

Korey Compaan, financial aid director at William Jessup University in Rocklin, Calif., called the practice "unethical."

"I don't see why it would make one iota of difference where I am going to college," education student Michelle McClain, 40, told the Times after finding out Citibank would no longer extend loans to William Jessup students.

J.P. Morgan Chase, PNC and SunTrust have also dropped specific colleges, the Times reported.

"From what I can tell from our lawyers, it's not technically illegal for them to reject schools," Harris N. Miller, the president of the Career College Association in Washington, said. "I just think that's very objectionable."