Sprott-Shaw Community College in Prince George is among 13 private post-secondary institutions whose students will not have access to financial assistance for at least two years, according to information provided Wednesday by the advanced education ministry.
The move comes after the loan default rate from students at the school rose progressively to 61.4 per cent in 2010 from 22.4 per cent in 2006.
Private post-secondary institutions that have default rates above 28 per cent for four or more consecutive years are subject to a review that can lead to their designation by the ministry not being renewed for at least two years, according to information provided by the ministry.
The measure came into effect at the end of last month, a ministry spokeswoman said, after Sprott-Shaw failed to overturn the decision during a 30-day appeal process.
After the period ends, an institution may again apply for designation if it meets all criteria.
Schools that have high dropout rates or whose students have trouble finding jobs typically suffer the high default rates, the spokeswoman indicated.
Sprott-Shaw executive vice president Maggie Harvie said the school had stopped taking students while waiting for the review's outcome and the "handful" of those who continue to take classes are fully funded.
Alternate ways to help students cover their costs will be pursued, Harvie said.
"We're going to go for government contracts, anything that's education for the community, but nothing that's student loans," Harvie said.
Asked why the school's default rate is so high, Harvie pointed to a combination of factors.
"We've had people that have left Prince George and unfortunately, when they leave they may not pay back their student loan," she said. "That and economic times, it's hard to find the money to pay back the loan when you're limited working, so it's a combination of quite a few things.
"We contact our students to get them to pay back and keep track with their student loans but if we can't find them then there's not much we can do."
The ban is a setback, Harvie agreed, but added Sprott-Shaw plans to continue operating in Prince George.
"It does hurt but the thing is we're committed to staying in Prince George so we're not closing the school, we're finding other ways of providing education to the community," Harvie said.
