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Policy

8:53am June 19, 2014

Nine #HBCUs In Trouble on Student Loan Defaults

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Nine HBCUs in Trouble. In a meeting last week that was described as “alarming” by those who attended, Obama Administration officials from the Department of Education informed several Black Caucus members that nine HBCU’s are in trouble because they have too many students defaulting on loans.

Though no one would name which of the nine HBCUs that were involved, it was clear to members that at least half of the nine HBCUs focused on had what the Administration views as far too many student loan defaults. The Obama Administration is set to rate all colleges MLB-steroidsbased on graduation rates and student loan defaults.

The meeting took place in the office of Rep. Danny Davis (D-IL) and White House HBCU Initiative Executive Director Dr. George Cooper was present. Davis said yesterday that the meeting was left with all involved focused on a legislative fix and other assistance.

A college’s “cohort default rate” is the percentage of a school’s borrowers who default. The “cohort default rate” was created 30 years ago as a way of focusing on schools that might be taking advantage of low-income students who can’t re-paying student loans. A report released yesterday suggested that schools with low graduation rates and high default rates should lose federal funding.

“There didn’t seem to be any concrete answers in terms of resolution of the problem but there did seem to be direction in terms of things that can be followed through on that might net some results,” Rep. Davis said yesterday on the meeting with Education Department officials.

“I didn’t get any sense of hopelessness … but I come from the school of activism and thought — meaning: you get as many people as involved in an issue as you can get and you keep pressing forward. When you get enough mass pressure then something gives. Mass pressure and continuous action determines outcomes,” Davis added.

hbcu-wp-1Reps. Hank Johnson, Yvette Clarke, and Sanford Bishop also attended the meeting. When Rep. Bishop was asked whether any schools in Georgia were mentioned, he said “maybe.”

Rep. Cedric Richmond, who has been an assertive leader on HBCU issues in the Black Caucus, was not at the meeting but said he would definitely follow up with Davis on what was discussed.

The meeting marks yet another time where there has been bad news for HBCUs during the Obama Administration. Many members argue that rules around cohort default rates should not apply to HBCUs given their special mission and willingness to educate low income students — a mission other colleges do not take on.

In April of 2013 during NAFEO’s annual conference, Hampton University President William Harvey, who is also the White House — said that the current situation for HBCUs is the “worst situation in 25 years.” Harvey was referring to the Obama Administration’s 2011 change to Parent PLUS loan rules.

The change hit America’s historically Black colleges and universities disproportionately hard in late 2012 and cost the schools a collective $160 million. Secretary of Education Arne Duncan later apologized for the situation in Sept 2013. Reps. Corrine Brown and Rep. Richmond offered a bill to reverse the Administration’s decision on Parent PLUS loans.

Layoffs at Howard, Morehouse and the closing of St. Paul’s College in Virginia followed.

Through 2024, the CBO expects the federal government to make a $149 billion profit on new direct loans to students. When Education Secretary Arne Duncan was asked about this at a hearing last month he had no answer.



About the Author

Lauren Victoria Burke
Lauren Victoria Burke
Lauren Victoria Burke is a writer and political analyst. She created the blog Crewof42, a blog that covers African American members of Congress, in 2009. Ms. Burke appears regularly on NewsOneNow with Roland Martin and on WHUR, WURD, and WVON. Ms. Burke has enjoyed employment at USAToday.com and ABC News. She holds a B.A. in History from The American University. E-mail anytime: LBurke007@gmail.com. Twitter: @Crewof42




 
 

 
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