Black college students and their families plan to demonstrate on the National Mall later this month to express outrage over new rules used to establish creditworthiness for federal Parent Plus loans that help students pay their college tuition.
At least two of the state’s historically-black colleges and universities, Lincoln and Cheyney University of Pennsylvania, are expected to join historically-black colleges and universities from around the country as the nation marks a historic moment: the 50th anniversary of the march where Dr. Martin Luther King gave his rousing speech, “I Have A Dream.”
Cheyney University President Dr. Michelle R. Howard-Vital and Lincoln University President Robert R. Jennings said a busload of delegates will travel to the nation’s capital to protest new requirements on Parent Plus loans approved by the U.S. Department of Education.
Jennings took issue with new rules requiring any loan application by individuals who have an “indentation” on their credit report within the last 18 months. Under the new tighter restrictions, a parent who wishes to co-sign a federal loan to pay for education costs would be automatically denied if a payment had been recorded with a credit bureau as more than 30 days late.
“I don’t know too many people from the middle-class who don’t have an indentation on their credit report. Sometimes, you don’t even know that it’s happening,” Jennings said at an editorial board meeting held Wednesday at The Philadelphia Tribune offices.
Jennings said he told a Congressional panel as much during last month’s hearing at Swarthmore College in Springfield Township. He said loan applications can be denied for other reasons, including low credit score, being out of work for too long or due to a dispute over a credit transaction.
Howard-Vital, who participated via conference call, said changing loan approval criteria has “really exacerbated the have’s and have-not’s.”
“The divide is getting bigger and bigger,” she said. “It’s hitting the working-class, middle-class and lower-income families hardest.”
The new rules regarding creditworthiness has forced HBCU’s around the country to turn away new and returning students, according to presidents of both universities. Cheyney lost 250 students because their family’s Parent Plus application were rejected. At Lincoln University, 849 of 1,159 students seeking Parent Plus loans were denied.
Jennings said Black students with high grade-point averages aren’t immune. If they can’t afford to pay their tuition, they are forced to suspend their studies.
Nearly 2 million college students apply for Parent Plus loans each year, but Jennings said that only 300,000 are African-American.
The Parent Plus loan program came under scrutiny because student loan debt has exceeded credit card debt for the first time; federal loans were being approved without considering an individual’s ability to pay it back; and more students defaulting on their federal loans.
Some students have difficulty meeting the requirement of paying 80 percent of their tuition costs prior to the start of the semester. An average tuition at Lincoln costs $9,100, and that means a student must pay a minimum of $7,500 in advance in order to take classes.
Many students attending HBCU’s are already relying on supplemental federal funding, including PELL grant and Stafford loans, among others. Congress’ recent increase, then decrease, of the student loan interest rate only served to add more confusion and exacerbate the problem.
Jennings said he received 14 e-mails in a single day from students asking for his help in seeking alternative financing. He believes the problem could have been minimized if higher education institutions, particularly HBCUs, were given more notice about changing rules for qualifying for Parent Plus loans.
Jennings criticized the Obama administration for pushing for an educated populace but allowing practices and programs that prevent people from obtaining college degrees. He challenged Obama to do a better job of protecting special-interest groups like HBCUs, just as President Reagan protected corporations and President George W. Bush looked out for companies with oil interests.