BUTLER TWP — This fall students at Butler County Community College will no longer have the option of receiving federal loans from Citizens Bank.

Julianne Louttit, director of financial aid at BC3, said it's not the first time in recent months that a bank has disappeared from BC3's recommended list of lenders.

"Our representative from Citizens just apologized and said based on the market, they are not the first to stop lending to community colleges," Louttit said. "What's happening is (that) for the lender's sake, the more who pull out, other lenders left in will get a higher volume."

While Citizens Bank will no longer offer federal loans to community colleges, Slippery Rock University and other larger colleges are not affected.

The loan formerly provided to BC3 students is the Stafford loan through the Federal Family Education Loan Program, Louttit said.

Representatives at Citizens Bank did not comment on a phone call and issued a statement via e-mail.

"We continue to provide private and federally guaranteed student loans, but we have made a decision to exit doing business with schools outside of our footprint, and some schools within our footprint, based on profitability," said Angela Wagner, assistant vice president of public affairs at Citizens Bank.

Wagner did not say how many community colleges in Pennsylvania will be affected by the decision.

Louttit said 60 percent of the students at BC3 uses the financial aid program, and $4 million in student loans are used every year at the college.

"Citizens said they do still offer private loans for our students, but that doesn't have the better interest rate," Louttit said. "That's an alternative, but we recommend the Stafford loans first because it's better for the students."

In addition to Citizens Bank pulling out of the federal loan program at BC3 and other community colleges, M&T Bank and the Pennsylvania Higher Education Assistance Agency also have opted out.

Louttit said she does not think the problem will affect students at BC3 as long as they know about other lenders such as PNC Bank and National City that still offer federal loans at the college.

"There is still a wide range of lenders — they just need to be aware of that," Louttit said. "I do fear for the students going onto more expensive schools because the private loans are getting strict, and that will be a burden on families, but it shouldn't deter people from coming to a community college."

BC3 does not offer institutional loans to students, Louttit said. She worries that some students will not read the notices sent out to them regarding Citizens Bank loans, and they might be scrambling in August for funding from other lenders.

"My fear is that classes are going to start and they are going to wonder why they don't still have a loan," Louttit said. "We are trying to be proactive, but I am sure there will be some students who don't read our literature."