Presidents of HBCUs had considered suing the Obama administration after more than 14,000 students were declined loans when the U.S. Department of Education changed its creditworthiness criterion to much more stringent standards without notification, costing them many millions in revenue.
Calling it the “worst situation” in more than three decades, Historically Black Colleges and Universities were disproportionately and dramatically impacted by the Education Department’s altered guidelines for Parent PLUS loans. The federal government used to evaluate a student’s credit over a 90-day period, but then changed it abruptly in 2012 to cover a five-year period, resulting in a dramatic hike in loan application rejections during the fall 2012 semester.
This precarious situation comes as the first couple is scheduled to deliver commencement addresses at HBCUs in May. President Obama is set to give a speech before graduating students at Morehouse College in Atlanta, who, according to Lauren Burke of politics365.com, had to furlough employees because of a decline in enrollment. More than 160 students there were unable to attend classes in the fall of 2012, resulting in decreased revenue at the famed institution. The HBCUs collectively were already rocked by the infamous sequestration that put a 5.1 percent dent in their budgets, the publication reported.
First lady Michelle Obama is also scheduled to address HBCU graduates at Bowie State near Baltimore in May, setting up an interesting environment because there are those in the urban educational community who believe that President Obama has shirked his promises to aid ailing HBCUs during his second term.
HBCU presidents addressed this during their annual NAFEO (National Association for Equal Opportunities in Higher Education) conference at the U.S. Capitol in Washington this week.
Take a look at what HBCU presidents had to say about the peril facing some HBCUs in light of the new loan application regulations.