#HBCU Advocates, Black Caucus React to Final Parent PLUS Change

#HBCU Advocates, Black Caucus React to Final Parent PLUS Change

3505
9
SHARE

In October 2011, the Department of Education tightened the loan standards for Parent PLUS Loans.  The change effected over 30,000 students at HBCUs at a collective loss in tuition to the schools of over $150 million. In 2013, Education Secretary Arne Duncan apologized for the impact of the change.

After a contentious three years of meetings and negotiations with HBCU advocates and members of Congress, the Department of Education announced the new and final rule update for Parent PLUS Loans.  The change is scheduled to take effect July 2015.  

Representatives at the Department of Education have expressed concern that Parent PLUS loans were a bad risk for low-income borrowers.  Skyrocketing costs for higher education and record student loan debt in America are the backdrop.

 

The new regulations will both expand student access to postsecondary education and safeguard taxpayer dollars by reflecting economic and programmatic changes that have occurred since the program was established more than 20 years ago,” said Secretary Duncan in a statement today.

“The final regulations update the definition of “adverse credit history” for PLUS loan applicants, and implement a streamlined application process for borrowers to obtain a PLUS loan, specifically for those with adverse credit histories,” the Department announced Wednesday.  The Department of Education also informed reporters they will release school-by-school data on rates of default and PLUS Loan default details.

RELATED: HBCU Advocate Lights Up Obama Administration

“While the regulations do not restore the pool of “creditworthy” applicants to the pre-2011 level as NAFEO and its colleagues fought indefatigably to achieve, it is a step in the right direction,” said Lezli Baskerville, President of the National Association for Equal Opportunity in Higher Education.

“The regulations will make 370,000 PLUS loan applicants who failed to pass the new “adverse credit history” criteria, now eligible borrowers for the PLUS Loan gap funding; expand higher education access, and increase the likelihood of success for 691,900 additional students,” Baskerville added.

United Negro College Fund President Michael Lomax added that, “HBCUs and the students they serve have endured three years of hardships caused by denied access to PLUS Loans.  This has been a distraction from the real work that needs to be done – preparing students with the skills needed in a competitive, global economy.”

Lomax added that the Department’s action, “reverses stringent credit standards imposed by the Department in 2011 that had a devastating impact on families and students.”  Lomax came under sharp criticism this year after UNCF accepted $25 million from the Koch Brothers.  During an interview with Roland Martin in June, Lomax revealed UNCF took the money from the Koch Brothers in part because their donation included a $4 million unrestricted contribution to UNCF’s member institutions, “in order to make up for losses institutions had around the Parent PLUS loan issue.”

Many HBCU advocates aren’t thrilled the implementation of the new rules won’t take effect until 2015. 

In a hotly worded statement on the Department’s announcement, Thurgood Marshall Fund President Johnny Taylor said, “the delayed implementation of PPL regulations is as disturbing as the unlikely scenario of our government issuing a statement indicating they have a cure for Ebola and then announcing the cure will not be released until July 2015.”

The Chair of the Congressional Black Caucus was less critical.

“I am encouraged by today’s news, and applaud the Department of Education for finally taking this step to begin leveling the playing field for so many students and families of color and modest means — those who most benefit from the Parent PLUS Loan Program,” said CBC Chair Marcia Fudge (D-OH).

Black Caucus members Corrine Brown (D-FL) and Cedric Richmond (D-LA) offered legislation to change the Parent PLUS Loan rules back to what they were in 2011.  Reps. Brown and Richmond, who have many HBCU’s in their districts, expressed general satisfaction about the rule change but their praise was joined with a glance backward at the last three years.

“HBCU’s and their students have struggled terribly because of the sudden change in the Department of Education’s Parent PLUS loan guidelines. For three years, the Congressional Black Caucus, along with the HBCU advocacy community, has battled arduously with the Department of Education to correct this administrative injustice,” Congresswoman Brown stated.

“Although the goal of the Caucus was to return the PLUS Loans rule back to where it was prior to 2011, I am pleased that the Department’s new regulations will begin to stem the loss of thousands of students and millions of dollars from HBCU’s and colleges across the nation,” Rep. Brown added.

“Finalizing this rule is an important step towards re-opening the doors of higher education that were closed to students across the nation by the previous unfair standards. We should not be making it harder for students to afford an education at a college or university they qualified for, and I am glad the Department of Education shares this sentiment,” said Rep. Richmond.

As reported by Rachel Fishman in EdCentral.org: Under the Department’s final rule, PLUS borrowers will fail the credit check for the loan if they have one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent, charged off, or in collections in the past two years or have been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write off of a debt under title IV in the past five years. (See page 83 of this document for the final regulation).”

……………………………………………………………………….

Full statements from CBCers and HBCU advocates are at bottom.

……………………………………………………………………….

CBC and HBCU Leaders Hail New PLUS Loan Rules Hundreds of Thousands of Students To Benefit

WASHINGTON, DC – The Congressional Black Caucus (CBC), together with the National Association for Equal Opportunity in Higher Education (NAFEO), the United Negro College (UNCF), and the President’s Advisory Board on Historically Black Colleges and Universities (HBCUs) hail today’s release by the U.S. Department of Education of new eligibility rules for the federal Parent PLUS Loan program – which provides college loans to parents for their children – and urge their swift implementation. The final PLUS Loan regulation will stem the loss of thousands of students and millions of dollars from HBCUs and other colleges and universities across the country by making nearly 400,000 students eligible for these college loans who previously would have been denied. 

CBC Chairwoman Marcia Fudge: “I am encouraged by today’s news, and applaud the Department of Education for fudge1finally taking this step to begin leveling the playing field for so many students and families of color and modest means — those who most benefit from the Parent PLUS Loan Program. Access to higher education has long been the key to achieving upward socioeconomic mobility in this country.  It is my sincere hope that we will reinforce our commitment to these students and families by implementing these new rules quickly and without further delay.”

Congresswoman Corrine Brown: “I am very pleased that the Department of Education released its new eligibility guidelines for the federal Parent PLUS Loan program, and I wholeheartedly urge their swift implementation. Since October, 2011, HBCU’s and their students have struggled terribly because of the sudden change in the Department of Education’s Parent PLUS loan guidelines. For three years, the Congressional Black Caucus, along with the HBCU advocacy community, has battled arduously with the Department of Education to correct this administrative injustice.  Although the goal of the Caucus was to return the PLUS Loans rule back to where it was prior to 2011, I am pleased that the Department’s new regulations will begin to stem the loss of thousands of students and millions of dollars from HBCU’s and colleges across the nation.”

Congressman Cedric Richmond: “Finalizing this rule is an important step towards re-opening the doors of higher education that were closed to students across the nation by the previous unfair standards. We should not be making it harder for students to afford an education at a college or university they qualified for, and I am glad the Department of Education shares this sentiment. My colleagues in the CBC, the HBCU community, and I have worked diligently to resolve this matter. I look forward to the quick implementation of the new standards so that hundreds of thousands of students in the 2nd district and throughout the country can get the help they deserve as they pursue a college education.”

NAFEO President and CEO, Lezli Baskerville: “The regulations released by the Department today are a hard won victory for HBCUs and their stakeholder communities including the students, their families, and champions of HBCUs–NAFEO, UNCF, the President’s Board of Advisers on HBCUs, the Congressional Black Caucus and others. While the regulations do not restore the pool of “creditworthy” applicants to the pre-2011 level as NAFEO and its colleagues fought indefatigably to achieve, it is a step in the right direction. The regulations will make 370,000 PLUS loan applicants who failed to pass the new “adverse credit history” criteria, now eligible borrowers for the PLUS Loan gap funding; expand higher education access, and increase the likelihood of success for 691,900 additional students. [1] We will remain vigilant in ensuring that the Department acts with alacrity to immediately implement the Parent Plus regulations as it indicated it will.”

UNCF President and CEO, Michael L. Lomax: “HBCUs and the students they serve have endured three years of hardships caused by denied access to PLUS Loans.  This has been a distraction from the real work that needs to be done – preparing students with the skills needed in a competitive, global economy.  UNCF and our member presidents have rolled up their sleeves and worked hard to find a solution to this crisis, and we are pleased that this final regulation embraces that work.”

The final PLUS Loan regulation revises the credit standards used to determine whether parents can receive loans to pay for college expenses for their children.  It reverses stringent credit standards imposed by the Department in 2011 that had a devastating impact on families and students across the country.   Hundreds of thousands of families who previously had received PLUS Loans for their children found their applications for renewal rejected and their appeals denied. 

The CBC, led by Chairwoman Marcia Fudge (D-OH) and Representatives Corrine Brown (D-FL) and Cedric Richmond (D-LA), had engaged in a tough, three-year fight to reverse the harsh 2011 Department policy that exploded among low-income students and families like a financial grenade. Representatives Danny Davis (D-IL) and Chaka Fattah (D-PA) co-chaired the CBC PLUS Loans Working Group.  The CBC – and the HBCU coalition leaders – demanded action from President Obama and Secretary Arne Duncan to reverse the damage and stop the bleeding.  The final PLUS Loan regulation released today takes significant steps to accomplish that. 

SHARE
Previous articleWhy Do Democrats Think They Can Bash Obama and Get Black Votes?
Next articleImmigrant activists target Democratic Sen. Kay Hagan with billboard campaign
Lauren Victoria Burke
Twitter: @LVBurke / Lauren Victoria Burke is an independent journalist who analyses politics and justice reform. She created Crewof42.com, a blog that covers the work of African American members of Congress, in 2009. Ms. Burke has also been a staffer for the Senate Democratic Policy Committee and Director of Communications for Rep. Andre Carson (D-IN). She has had a very diverse career in politics and media and appears weekly on NewsOneNow with Roland Martin. She has also appeared on Hardball with Chris Matthews, Politics Nation with Al Sharpton and Up with Steve Kornacki on MSNBC. She is also a contributing writer for NBCNews.com and TheRoot.com Ms. Burke was born in the Bronx, New York and grew up on Long Island. She holds a B.A. in History from The American University. E-mail: LBurke007@gmail.com. Instagram: LVB325.

9 COMMENTS

  1. I also prefer to use cashback websites for
    online purchases as they tend to pay more.

    The Yakuza Lords game world has five cities with four neighborhoods each.
    Video game playing is a fun activity that individuals from all over the world can enjoy.

  2. I am not positive where you’re getting your information, but good topic.
    I needs to spend a while studying more or working out more.
    Thank you for fantastic information I was searching for this information for my mission.

  3. I don’t know whether it’s just me or if everyone else encountering problems
    with your blog. It appears like some of the written text within your posts are running off the screen. Can someone
    else please provide feedback and let me know if this is happening to them as well?
    This might be a problem with my internet browser because I’ve had this
    happen before. Thank you

LEAVE A REPLY