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FOR IMMEDIATE RELEASE
Contact: Ayofemi Kirby
(202) 226-9776
ayofemi.kirby@mail.house.gov

CBC Chair and HBCU Community Leaders Respond to Department of Education’s Refusal to Reverse Changes to Parent PLUS Loan Eligibility Criteria

The Congressional Black Caucus (CBC) and advocacy organizations representing Historically Black Colleges and Universities (HBCUs) released the following statements after meeting and committing to working together to advocate for students harmed by a change made to the Parent PLUS Loan (PPL) program eligibility criteria:

CBC Chair Marcia L. Fudge (OH-11): “Ensuring access to higher education is one of the CBC’s top priorities. In this case, we are also fighting to enable students to remain in the school of their choice until they graduate. The sustainability of the institutions that serve these students is critical to maintaining a high standard of education in this country. Members of the CBC are committed to doing all we can to quickly undo the change made by this Administration that has resulted in thousands of young people being unable to pursue their education and in the economic hardship for so many HBCUs. This is no longer an issue that can be discussed. The issue must be addressed and the policy must be fixed now.”

Hampton University President and Chair of the President’s Board of Advisors on HBCUs William R. Harvey: “There were no new regulations; and therefore, there was not the typical notice and comment period. Clearly, the students and the institutions were blindsided.Particularly troublesome for me is how the Administration could possibly reconcile its 2020 goal for the United States to have the highest proportion of college graduates in the world with its changes in Parent PLUS resulting in 28,000 HBCU students not being able to fill the gap in resources needed to pay for college and a loss of at least $154M in revenue to HBCUs. In my view, the 2020 goal and the changes in Parent PLUS are irreconcilable. 

“The solution to this problem is quite simple, the Department of Education should immediately return to the pre-2011 interpretation of ‘adverse credit history.’ This could be done by the Department of Education issuing a guidance document which states that ‘adverse credit history’ is to be interpreted and defined just as it was prior to 2011.”

National Association for Equal Opportunity in Higher Education (NAFEO) President and CEO Lezli Baskerville: “I very much appreciate the Department’s current and planned public engagement actions to respond to the substantial adverse economic impact and the tremendous loss of students from HBCUs occasioned by the shift in its regulatory interpretation. However, the reality is that the current and proposed public input actions should have taken place prior to the Department’s significant policy change. The Administrative Procedures Act specifies that in these cases, public ‘notice and comment’ are required in advance of the policy change. Implementing the change when there is no indication that there were especially high default rates, fraud or abuse, or any loss on the federal government’s investment in this program is perplexing and it has resulted in the hemorrhaging of tens of thousands of students from our campuses.

“NAFEO has been working with its members to move from 35,500 to 57,000 graduates per year to reach the goal of 167,000 new HBCU graduates by 2020, a goal that the Department of Education has set. The Parent PLUS Loan policy shift is an unanticipated stumbling block in the road. “The Administration is leaving us with no choice but to pursue legal action. It seems the only relief we will be able to get is injunctive relief.”

Thurgood Marshall College Fund (TMCF) President and CEO Johnny C. Taylor, Jr.: “We are hearing from HBCUs, parents, and students – many who are juniors and seniors – that they are being denied PLUS Loans and not offered any reconsideration options, causing the colleges and families to scramble to help keep them in school. “If President Obama is really serious about addressing the needs of our students and families, he would direct Secretary Duncan to do something about this now and not wait until 2014 while thousands of would-be college students sit at home.”

United Negro College Fund (UNCF) President and CEO Michael L. Lomax: “At a time when a college degree is more essential than ever to compete in the global economy, the Parent PLUS Loan crisis has undermined the dreams of many young Americans and their families. These college-ready students have worked toward their educational goals, yet current PPL measures make it more difficult for parents to assist their students in paying for college. These changes in the Parent PLUS Loan program have had disastrous consequences for Historically Black Colleges and Universities and students alike. In far too many instances, students have been left without financial assistance for their education as the academic year begins. We deeply appreciate the Congressional Black Caucus standing with HBCUs and students as we work to reverse the U.S. Department of Education’s decision.”

Background: Until 2011, the Department of Education did not interpret “adverse credit history” in the Parent PLUS Loan eligibility criteria to include charge offs, medical collections and other credit issues. Effective in 2012, while African American families were disproportionately suffering from the impact of a faltering economy, a new, more restrictive interpretation of “adverse credit history” was applied in determining eligibility for Parent PLUS Loans.

On August 16, the Department of Education released a report stating that there were 39,206 HBCU Parent PLUS Loan denials (or 68% of all HBCU applicants) between March 2013 and August 2013. CBC Chair Marcia L. Fudge (OH-11), Congresswoman Corrine Brown (FL-05), Congressman Cedric L. Richmond (LA-02), Hampton University President and Chair of the President’s Board of Advisors on HBCUs William R. Harvey, National Association for Equal Opportunity in Higher Education President and CEO Lezli Baskerville, Thurgood Marshall College Fund President and CEO Johnny C. Taylor, Jr. and United Negro College Fund President and CEO Michael L. Lomax have emphasized the urgent need to immediately solve the problem to the Department of Education. For one year, the groups have worked independently with Administration officials, but the problem remains.

With students returning to campuses this week without knowing if they are going to be eligible to receive a Parent PLUS Loan to further their education and with data consistently showing that a change to the Parent PLUS Loan program is keeping students out of school, a real solution to this crisis is far overdue.

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