Loan Plan Change Hurts Historically Black Colleges

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WASHINGTON - A change in federal education loan policies has left many students at some of the nation's historically black colleges and universities struggling to fill a gap in their financial aid and forcing hundreds to leave school.

A more rigorous system of credit checks has denied certain loans available to parents to help with their children's undergraduate expenses. The loans are available to all students at all schools. But the changes have had a particularly severe impact on thousands of students at historically black colleges, advocates for those schools say.

"It's been devastating," said Rep. Corrine Brown, D-Fla., a member of the Congressional Black Caucus. "The loan helped bridge the gap. For students and colleges that didn't have additional resources, those students had to go home. And to me that's just unacceptable."

The loans are known as PLUS loans and are available to parents of dependent undergraduate students, as well as graduate students. But a change in 2011 disqualified borrowers with unpaid debts over the past five years that had been referred to collection agencies or ruled as uncollectable.

Parents of nearly 15,000 students were denied PLUS loans as of last fall, with only 1,900 cases reversed on appeal, according to the National Association for Equal Opportunity in Higher Education, an umbrella organization for black colleges known as NAFEO. The loan issue was a major topic at a recent association conference in Washington.

Brown said figures provided to her by the Department of Education show that as of February, parents of some 28,000 students at historically black colleges had been denied PLUS loans. Among all schools and students, 400,000 PLUS loan applications were denied as a result of the stiffer credit criteria, according to Brown.

Education Department spokesman Daren Briscoe declined to provide specific numbers. But he said that about 80 percent of the students who were denied the PLUS loans ended up enrolling in school anyway. …