“Mr. President, if you’re going to look at these regulations, I beg you to do it with the urgency of now,” Rep. Elijah Cummings (D-MD) said he told President Obama yesterday on Parent PLUS loans. The Congressional Black Caucus met with the President for over an hour Tuesday morning. The issue of Parent PLUS loans, and how they’ve badly affected students at historically Black colleges in particular, was brought up prominently.
Parent PLUS loan denials was one of six agenda items CBC Chair Rep. Marcia Fudge (D-OH) asked President Obama to focus on for the meeting. Parent PLUS was the first issue raised by the Black Caucus at the meeting.
In the fall of 2012, tougher screening standards for PLUS loans resulted in 28,000 students attending historically Black colleges, and 200,000 overall, being denied loans last fall. As a result, HBCUs collectively lost over $150 million. A Washington Post story on how HBCUs were effected by the sudden spike in Parent PLUS denials said there was a 19% drop in funding for all HBCUs as a result. Spelman College lost over $2 million, Morgan State in Maryland lost over $4 million and Morehouse College lost over $3 million over one year.
Members of the Black Caucus, including Reps. Corrine Brown (D-FL), Jim Clyburn (D-SC) and Cummings, were vocal in asking the President to act urgently on the matter of Parent PLUS loans. They said they were encouraged by the President’s reaction and felt he understood the issue and the urgency of the situation. One member said they expected action soon.
Cummings, a graduate of Howard, said the President stated he, ”was looking at the regulations for Parent PLUS loans and that they were probably a bit too harsh.” The change in credit history eligibility requirements was an attempt to mirror private sector loan standards. Many members, such as Rep. Brown and Rep. Cedric Richmond (D-LA) have expressed irritation that the change was first undertaken without formal policy discussion or a standard “rule making” process.
“We believe the criteria ought to be more lenient,” Clyburn said near the House floor in the Capitol Building. ”If you have 100,000 students and families that can’t get Parent PLUS loans, that’s a problem for us,” he added.
According to the National Association For Equal Opportunity in Higher Education (NAFEO), 28,000 students attending historically black colleges in the fall of 2012 were denied Parent PLUS loans. Dr. William Harvey, the President of Hampton University and chair of President Obama’s HBCU Board of Advisors, stated the rule the change by the Obama Administration meant a loss of $150 million to HBCUs after many students were declined loans. Dr. Harvey said HBCUs were in “the worst situation I’ve seen in 35 years” at NAFEO’s annual conference in April. Hampton University lost over $6 million due to Parent PLUS loan denials.
Last week, St. Paul’s College in Virginia closed its doors after 125 years. Morris Brown College in Atlanta is currently fighting to stay open. On June 14, HowardUniversity board Vice Chair Renee Higginbotham-Brooks wrote an urgent letter to fellow board members stating that Howard ”may not be here in three years,” because of their fiscal situation. The University then laid off 75 people in June. Howard lost over $7 million due to Parent PLUS loan denials.A White House release after the meeting stated that, “the President discussed the need to continue efforts to help students afford college by protecting Pell Grants and preventing Stafford Loan interest rates from doubling for American students.”
Earlier this year, Education Secretary Arne Duncan also set up a hotline for students who had been declined loans in order to streamline a process to reverse the denials. Many were reversed. However yesterday, two Black Caucus members said the Parent PLUS loan situation is still a current ongoing problem colleges will face in this fall.
When Rep. Clyburn was asked if he’s still hearing of continuing problems right now from historically Black colleges in South Carolina regarding Parent PLUS loans denials, Clyburn answered, “absolutely.”
Rep. Brown’s district hosts 12 colleges and universities including Florida A&M and Bethune Cookman University. Brown also said she had been recently informed by HBCU advocates that the problem may hit HBCUs hard again in the fall.
The CBC has met with Secretary of Education Arne Duncan at least twice over the last six months and the issue of Parent PLUS loans has come up. Though members praise Duncan, they also say the unwillingness to change the credit screening back to what it was is causing irreparable damage to historically Black colleges.
HBCU advocates, most noteably Lezli Baskerville of NAFEO, Johnny C. Taylor, Jr. of the Thurgood Marshall Fund, and Michael Lomax of the United Negro College Fund have been very vocal on the Parent PLUS problem and how it has hurt HBCUs.