After the Department of Education began to implement stricter requirements for PLUS loan applicants under 34 CFR § 682.201 (c)(2), over 14.616 students from historically Black colleges and universities (HBCUs) were forced to abandon their studies in the fall of 2012 after a dramatic spike in loan denials. The parents of the students applying for Parent PLUS loans suddenly found they could be denied loans if they had a major change in their credit within five years of applying for a loan.
Over 80% of budgets for HBCUs comes from the financial aid of students. Thurgood Marshall Fund President Johnny Walker says only 1,900 of the 14,600 students whose education was interrupted have been issued loans.
The 5 schools that saw the most students denied loans in the fall of 2012 were the following:
1. North Carolina Central University (NC): 609 students denied loans
2. Howard University (DC): 607 students denied loans
3. Florida A&M University (FL): 569 students denied loans
4. Prairie View A&M (TX): 528 students denied loans
5. Grambling State University (LA): 523 students denied loans
Advocates for HBCUs are calling the situation a catastrophe. This week in Washington, many HBCU Presidents are convening to talk about the problems their institutions are facing. The President of Tuskegee University Dr. Gilbert Rochon, told an audience at the annual National Association for Equal Opportunity in Higher Education (NAFEO) in Washington that the Parent PLUS loan change in “credit worthiness” have hurt HBCUs badly. Julianne Malveau, the former President of Bennett College in North Carolina, said there was a “gag order” imposed on some Black college administrators on the PLUS loan issue last fall when students were leaving school because they could not get loans. Read Full
