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College dream deferred by fed loan changes
Tighter standards force students to leave HBCUs
 
Published Thursday, August 29, 2013 7:18 am
by Herbert L. White

Changes to a federal student loan program is impacting enrollment at historically black colleges.

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Changes in the Parent PLUS loan program have forced hundreds of African Americans to alter their college plans and impacted enrollment at historically black colleges and universities.


African American lawmakers and HBCU advocates are criticizing the Obama administration’s decision to toughen eligibility standards for the Parent PLUS Loan program. Until 2011, the U.S. Department of Education did not interpret an applicant’s “adverse credit history” like charge-offs and medical collections. Last year, however, a more restrictive interpretation was approved, resulting in 28,000 HBCU students becoming ineligible, according to the Congressional Black Caucus.


According to Department of Education statistics, of the 57,542 Parent PLUS applications considered between March and August, 39,206 –  68 percent – were declined. The resulting enrollment drop will cost the schools $154 million in federal revenue.


“The sustainability of the institutions that serve these students is critical to maintaining a high standard of education in this country,” CBC Chair Marcia Fudge (D-Ohio) said in a statement last week. …“This is no longer an issue that can be discussed. The issue must be addressed and the policy must be fixed now.”


The Department of Education has softened its stance by offering appeals for students who’ve been rejected for Parent PLUS after being approved prior to 2012. With class in session on most campuses, few are expected to go through the process again, said Johnson C. Smith University President Ronald Carter, whose 1,700-student campus lost 120 scholars.


Future applicants will be considered based on the new standard.


“It may be too little, too late for this semester because our students are validated,” Carter said. “Are they going to try to appeal for their validation for the next semester? It doesn’t take under consideration the disappointments parents had in going through that process, being embarrassed, being told ‘you can’t qualify because you’ve missed payments within a certain period of time.’ Do they even have the courage to reapply?”


Carter called the Department of Education’s appeals policy “messy” and results in a labor-intensive mission of contacting families regarding the process.
“It’s still creating problems that should not have existed at all if they had the courtesy to discuss the issue with us prior to making the change in the criteria,” he said.


Last week, President Barack Obama rolled out proposals intended to make college more affordable. With average tuition at four-year colleges tripling over the last 30 years, the average U.S. student loan debt has ballooned to $26,000.


Hampton University President William Harvey contends changes to the loan program will hinder the education mission of colleges with large enrollments of lower-income students. With fewer students on campus, there’ll be a corresponding drop in graduates.


“Particularly troublesome for me is how the administration could possibly reconcile its 2020 goal for the United States to have the highest proportion of college graduates in the world with its changes in Parent PLUS,” he said. “In my view, the 2020 goal and the changes in Parent PLUS are irreconcilable.”


JCSU compensated for the federal shortfall by awarding tuition grants and discounts to 180 of 300 students denied Parent PLUS loans.


“We’re talking about helping a student close a $700 gap; a $900 gap,” Carter said. “These are not large gaps, but for parents, this is huge.”
Harvey, the Hampton president, wants the feds to return to previous eligibility rules.


“The solution to this problem is quite simple,” he said. “The Department of Education should immediately return to the pre-2011 interpretation of adverse credit history. This could be done by the Department of Education issuing a guidance document which states that ‘adverse credit history’ is to be interpreted and defined just as it was prior to 2011.”




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