#HBCUsInCrisis. After the Department of Education began to implement stricter requirements for PLUS loan applicants under 34 CFR § 682.201 (c)(2), over 14,616 (read detailed story here) students from historically Black colleges and universities (HBCUs) were forced to abandon their studies in the fall of 2012 after a dramatic spike in loan denials. The parents of the students applying for Parent PLUS loans suddenly found they could be denied loans if they had a major change in their credit within five years of applying for a PLUS loan.
Over 80% of budgets for HBCUs comes from the financial aid of students. Thurgood Marshall College Fund President Johnny C. Taylor, Jr. says only 1,900 of the 14,600 students whose education was interrupted have been issued loans.
The 5 schools that saw the most students denied loans in the fall of 2012 were the following:
1. North Carolina Central University (NC): 609 students denied loans
2. Howard University (DC): 607 students denied loans
3. Florida A&M University (FL): 569 students denied loans
4. Prairie View A&M (TX): 528 students denied loans
5. Grambling State University (LA): 523 students denied loans
Advocates for HBCUs are calling the situation a catastrophe. This week in Washington, many HBCU Presidents are convening to talk about the problems their institutions are facing. The President of Tuskegee University Dr. Gilbert Rochon, told an audience at the annual National Association for Equal Opportunity in Higher Education (NAFEO) in Washington that the Parent PLUS loan change in “credit worthiness” have hurt HBCUs badly. Dr. Julianne Malveaux, the former President of Bennett College in North Carolina, said there was a “gag order” imposed on some Black college administrators on the PLUS loan issue last fall when students were leaving school because they could not get loans.
Dr. Ernest McNealey, who has been the President of Stillman College in Alabama for 16 years, said the the situation regrding PLUS loans was a “disaster for HBCUs” and the largest exodus of HBCU students from their studies in at least 45 years. At the NAFEO conference this week, 1,200 students are set to rally at the U.S. Capitol and visit member of Congress this week. They are also using hashtags on twitter such as #BarackCallArne, #LeaveHBCUsAlone and #Fightfor14000 on twitter.
The student loan situation is a disaster for HBCUs, many of which are smaller under-funded institutions with a specific mission to educate low income students who are in particular need of the loans. The impact of a 5.1% cut to all HBCUs because of sequestration has added to the problem.