In the fall of 2011, the U.S.
Department of Education, with neither notice to nor participation from any
stakeholders, tightened the credit criteria for parents seeking PLUS loans by
redefining “adverse credit history.” A PLUS Loan is a student loan
that parents of students enrolled at least half time in college may obtain. This modification has caused a dramatic
adverse effect on HBCUs as parents of students attending college seek to borrow
money to meet tuition and other financial needs.
Prior to this change, parents usually
were approved for the PLUS loan if they did not have any delinquencies of more
than 90 days and no foreclosures, bankruptcies, or defaults. The new definition of delinquency now include
debts that had been charged off or sent to collections even if they had been repaid by the
borrower.
The
change has affected as many as 400,000 students nationwide, and has caused a disproportionate
impact on HBCUs. HBCUs collectively lost more than $150 million, including $2
million at Spelman College, $3 million at Morehouse College, $3 million at
Tennessee State, $4 million at Morgan State, and $6 million at Hampton. The
tightening of lending polices resulted in both the loss of revenue and a
decline in student enrollment.
Most
students in HBCUs are on some type of financial aid, and many colleges use
Parent PLUS loans to fill the financial gap. This new credit criteria resulted
in thousands of previously approved recipients having their loans declined
under the new restrictions resulting in over 200,000 fewer recipients in 2013
than it did in 2011.
As
President of an HBCU, I joined with other presidents most impacted by these new
lending policies in meeting with the Administration to urge President Obama and
the Secretary of Education to reverse the eligibility changes. Higher education
is no longer just a moral obligation but an economic necessity, and we must act
to reverse the trend that not only threatens economic independence for the
students who need it the most, but also threaten the continued existence of our
HBCUs. I encourage each of you to become
involved to reverse these policies.
1. Write
to your members of the Senate and Congress to voice your concerns and ask that
they help restore more flexible lending policies
2. Engage
your church, civic and social organizations to write and use social media to
spread the word about the restrictive policies and join in efforts to get them
reversed
3. If
you are a member of a Sorority or Fraternity, make this issue a part of your
political advocacy agenda
4. Encourage
young people who are planning to go to college to become involved
5. Involve
educators and the community by hosting awareness events
Glenda Baskin Glover is President of Tennessee State University in Nashville, Tennessee
