13 HBCUs to Retain Access to Federal Financial Aid

By Dervarics, Charles; Levinson, Arlene | Black Issues in Higher Education, April 13, 2000 | Go to article overview

13 HBCUs to Retain Access to Federal Financial Aid


Dervarics, Charles, Levinson, Arlene, Black Issues in Higher Education


WASHINGTON -- Thirteen of the nation's historically Black colleges and universities will retain their access to critical student financial aid programs despite loan default rates that could trigger significant penalties.

Congress eliminated a long-standing exemption from sanctions for HBCUs during the last reauthorization of the Higher Education Act. Consequently, the colleges now can be penalized when their three-year default rates surpass 25 percent.

The exemption ended last July, though the specific wording in the higher education bill gave U.S. Department of Education officials some latitude on the sanction issue when dealing with HBCUs.

Penalties for high-default schools include the loss of access to student financial aid programs, critical to retaining students. Schools that lose that access to student aid programs often face extinction if they cannot regain their access to the program.

Greg Woods, chief operating officer of the department's Student Financial Assistance office, says the 13 schools had serious default problems but had taken several necessary steps to avoid sanctions.

Each of the 13 negotiated with department officials, submitting a default management plan and using an independent third party to help implement it. Woods says that many of the schools already have cut their defaults below 25 percent.

"It's best for students. It's best for everyone," Woods says of the decision. "We are delighted to partner with HBCUs ... to help them lower their default rates while raising their financial accountability. …

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