New loan policies fail Black college students
By Freddie Allen
Editor’s note: This is the first of two stories by NNPA Washington Correspondents Freddie Allen and Maya Rodan examining how federal loan problems are failing Black students in college.
WASHINGTON (NNPA) — Like thousands of Black college students, Bethanie Fisher, a psychology major at Howard University, depended heavily on the Parent Loan for Undergraduate Students (PLUS) program that allows parents to borrow the full amount of college tuition and fees. During, the 2007-08 school year, an estimated 33 percent of undergraduate students that earned degrees at Historically Black Colleges and Universities received Parent PLUS loans, double the rate of all undergraduate students nationwide.
“My mom, my dad, my aunt and my uncle would all apply every single year,” said Fisher.
In August of 2008, Fisher’s freshman year at Howard University, her uncle agreed to help her pay tuition. When he died suddenly of lung cancer at the end of her sophomore year, everything fell apart.
No one else in Fisher’s family met the standards for the Parent PLUS loans and now with stricter rules, her dreams of earning a degree from Howard University or any university are quickly evaporating. After scraping together enough money for a third year at the Washington, D.C. school, Fisher, a Detroit native, ran out of time and money.
Now she must come up with almost $15,000 to pay the balance she owes before she can take another class at Howard University — money that neither her mom nor her barely there father could afford. Fisher estimates that between tuition plus room and board and living expenses, she spent more than $20,000 a year to attend Howard University.
“On paper it says that my mom makes a lot of money,” Fisher said. “But who has that much money to spare every single year in a single-parent home?”
Fisher is not alone. Thousands of Black college students cobble together scholarships, loans and grants to earn college degrees. As President Obama champions education as the key to America’s future on the world stage, critical changes to federal financial aid programs threaten to close the curtain on the academic careers of thousands of Black college students.
In 2011, the Education Department made changes to a number of loan federal student loan programs in an effort to curb the number of loan defaults that were piling up when parents couldn’t pay. When the federal government largely cut out the banks in the student loan process, they also changed the rules for students and parents.
And it is those sudden rules changes that are creating havoc.
Now parents seeking the loans can be disqualified for past defaults, bankruptcies or tax liens within five years of applying for the loan. Parents need a near spotless credit history now, a dream in itself in today’s tough economy.
“If you make it harder to get a student loan if you have families that are less able to pay for a college education less able to survive what you’re doing is cutting off the future and you’re also putting a particular burden on historically Black colleges and universities,” said Mary Frances Berry, professor of American Social Thought and history at the University of Pennsylvania and former Assistant Secretary of Education. “Whoever decided to make these policy changes, they need to sit down and think about how the goals that they have for higher education are absolutely irreconcilable with what they’re doing with the budget.”
And these changes could not have come at a worse time for HBCUs.
Black colleges also struggle to reconcile dwindling enrollments with their efforts to enrich the lives of their students. Some have been forced to reduced programs and cut staff sizes.
“What we have here is a situation where we’re getting sliced at the federal level and we’re getting diced at the state level,” said Lezli Baskerville, president of the National Association for Equal Opportunity in Higher Education (NAFEO), a member organization representing HBCUs. “Given the federal cuts and the disproportionate loss of wealth, the bursting of the housing bubble which disproportionately impacted African Americans, it signals a calamitous situation.”
In September 2012 a group led by William R. Harvey, president of Hampton University and chairman of the president’s Board of Advisors on HBCUs, sent a letter to Education Secretary Arne Duncan detailing the disparate impacts the loan changes have had on HBCUs.
“At Benedict College last year, 926 students (30 percent of those who applied) were deemed eligible and received Parent PLUS or FEFL loans totaling $13,567,321. This year, only 237 students (only 9 percent of those who applied) were deemed eligible and received such loans, totaling $3,754,938,” Harvey wrote.
The group also challenged the Department of Education’s use of extenuating circumstances in determining a student’s eligibility for a PLUS loan.
“There are no more extenuating circumstances than the grossly disproportionately high unemployment rate in the communities from which our students come and DOE’s failure to phase in or give notice of the new interpretation and implementation of the regulation regarding evaluating credit history. These actions are actively working against President Obama’s goal of having the highest proportion of college graduates in the world by 2020, and the administration’s commitment and our nation’s dire need to increase the number of African American college graduates,” stated the letter.
The Atlanta Journal Constitution reported last October that “Morehouse College says it will furlough faculty and staff and make other budget cuts because of a drop in enrollment.”
Because of the Department of Education’s new loan policies, loan rejections jumped from 25 percent to 65 percent at Clark Atlanta University in Atlanta. CAU President Carlton Brown issued a statement saying a 13 percent drop in enrollment forced the school to cut travel and slow the hiring process for new faculty and staff.
Recent changes in the Parent Loan for Undergraduate Students left many students like Fisher in bad straits. The new rules shut out kids that had previously been admitted during the spring semester.
According to Cynthia Warrick interim president of South Carolina State University in Orangeburg, more than 1,000 students were denied Parent PLUS loans this academic year, leading to the lowest enrollment numbers in five years at the small school. On a campus of less than 5,000 students, losing that amount affected all aspects of campus life.
“This semester we cut cost cut spending and had to layoff employees. We had to tighten our belts,” said Warrick.
In October 2012, the school clipped $8 million from their budget.
“We’re still struggling with the numbers,” said Warrick.
South Carolina State quickly depleted their need-based grants and were forced to turn students away, some with “B” averages, but not good enough to earn scholarships.
“The loan programs are the only way these kids can get to college,” said Warrick. “It’s almost as if they’re telling the kids, ‘We don’t want you to go to college.’”
Johnny Taylor, president and CEO of the Thurgood Marshall College Fund, said the Department of Education should consider a grandfather clause for students who have relied on PLUS loans in the past and were just recently denied due to the changes.
“It makes no sense to let these students leave school without a degree or without a way to pay back the loan,” said Taylor. “If you already invested two years into a student it’s silly to cut him off now. If the kid goes home without a degree, he’s going to default.”
Taylor said that his group is working with the Department of Education to seek a resolution that will save the academic careers of nearly 14,000 students that were affected by the PLUS loan changes this year alone. They’re also working with Congressional Black Caucus and some Republicans on Capitol Hill, just in case their efforts at the executive branch-level stall
Taylor said that if it takes a lawsuit to resolve this issue, his group is fully prepared to take that next step.
“I remember Thurgood Marshall challenging ‘separate but equal,’” said Taylor referring to the landmark 1954 Supreme Court decision in Brown vs. Board of Education that reshaped the future of education in the United States. “If he hadn’t been willing to challenge ‘separate but equal’ we would still have it.”
After sitting out for a semester and a last-ditch effort to get back into school for the spring 2013 semester, Fisher decided to move back home in February, ending her academic career at Howard University prematurely.
“To hear your friends complain about going to class when you’re just dying to sit in someone’s class, I just can’t do that anymore,” said Fisher.
The Detroit native said she needs to pay the $15,000 balance before Howard University will release her academic transcripts so that she can attempt to transfer credits to a school closer to home.
“It hurts more than anyone will ever know,” said Fisher. “If they weren’t going to let me finish, they shouldn’t have let me start.”