BUTLER TWP — Butler County Community College President Nicholas Neupauer testified before the joint state Senate panels Monday, talking about how the state’s 14 community colleges are working to ensure good financial literacy and borrowing decisions.

The average student loan default rate for community college students in Pennsylvania is 15 percent, but BC3 has the second lowest rate of the 14 colleges in the Pennsylvania Commission for Community Colleges at 11.1 percent, Neupauer said at a board of trustees meeting Wednesday.

“Frankly, the next closest to us is a couple percentage points away,” Neupauer said.

Bucks County Community College has the lowest rate, which Neupauer said was in the 8 to 9 percent range.

Neupauer told the Senate Majority Policy and Senate Education committees that community colleges enroll the highest number of students — 318,000 — and are the least expensive postsecondary option. The average annual tuition is $4,132 in sponsored districts.

According to Neupauer, the average household income of a Pennsylvania family with a dependent student at community college is about $20,000 below the state median of $55,000.

“Pennsylvania’s community college leadership is keenly aware of our responsibility to ensure that our students make wise financial decisions, particularly when borrowing money for educational purposes,” Neupauer testified. “The colleges are committed to providing high-quality financial education to our students to ensure that they fully understand the consequences of loans on their future and principles of borrowing and debt management.”

BC3 offers a College Success Skills class, which includes a Financial Literacy 101 course every semester, teaching students how to create a budget and the importance of savings. The college also has an annual “Financial Wellness Fair” that includes representatives from community organizations, the Butler Armco Employees Credit Union, BC3’s financial aid office, the Pennsylvania Higher Education Assistance Agency, low-income student assistance group Keystone Education Yields Success, JobCorps and others.

BC3’s financial aid office does not “auto-package” loans.

Instead, students must complete a separate loan request form, which gives the school time to speak with students about borrowing.

Neupauer said all sectors of higher education were represented before the Senate committees, including public and private four-year universities.

While the Pennsylvania average default rate for community college students is 15 percent, that number rises to about 17 percent nationally, according to Neupauer.

Neupauer also stressed to the senators that the problem is not specific to community college students or those with low incomes.

“A report issued by the Federal Reserve Board in May found that 46 percent of adults surveyed said that they did not have the funds to cover a $400 emergency expense, or would either borrow money or sell something to come up with the money,” Neupauer said. “Improved financial literacy and financial education is needed across the population.”

However, Neupauer said that efforts to minimize the default rate cannot betray the goal of BC3, to provide open access to education.

“Think of the students we serve,” he told the trustees Wednesday. “We’re open access. We service a number of at-risk students, so there’s a concern that if we’re measured on default rates, that can somehow go against our mission of open access. Just like everything else, it’s a tight balancing act.”