Loan program change leads to enrollment drops at historically black colleges in NC

McClatchy Washington BureauMay 4, 2013 

ulian Melton, who graduated from N.C. Central University in December, worked a 4 to 8 a.m. shift at FedEx and an afternoon and evening job at a Kroger’s during his junior and senior years, with classes in between. He’d sleep or study in his car during breaks. He said his scholarship and student loan just about covered his expenses, but he worked long hours to send money home to help his mother, who was ill. He now works for Time Warner in Morrisville, N.C.

COURTESY OF JULIAN MELTON

— A change in federal education loan policies has left many students at some of the state’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 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. He said the department contacted thousands of borrowers who were denied the loans and reconsidered some cases.

Among the historically black colleges, North Carolina Central University in Durham had 609 denials of PLUS loans, the largest amount, according to data from NAFEO.

The group reported loan denials at other schools across the country, including 607 at Howard University in Washington; 569 at Florida A&M University in Tallahassee. In North Carolina, 407 loans were denied at North Carolina A&T University in Greensboro; 260 at Shaw University in Raleigh and 66 at Fayetteville State University in Fayetteville.

A student’s financial aid package can include student loans, scholarships such as the federal Pell grant for low-income students, and federally funded campus jobs.

But the aid doesn’t usually cover all costs of attending college. Financial aid offices tell students that their parents can apply for a PLUS loan to cover the amount of money needed to bridge the gap. The Department of Education grants the loans without any consideration of parents’ income but requires a credit approval.

students at historically black colleges are much more likely to have received PLUS loans, and so the change in policy was felt disproportionately there, said Mark Kantrowitz, a financial aid expert and the publisher of Fastweb.com and FinAid.org, websites that specialize in financial aid information.

At Winston-Salem State University in North Carolina, Chancellor Donald Reaves told Sen. Kay Hagan, D-N.C., at a summit of chancellors from historically black colleges last month that at his school, which has about 4,500 full-time undergraduates, had lost about 750 students this year.

Of those who left, 609 were in good academic standing, and 200 of them were seniors, Reaves said. The average gap between what their financial aid offered and what they needed was $2,700.

“All of us are facing a tremendous challenge with regard to financial assistance to the students we enroll,” he said.

But some students have found ways to cope with the financial difficulties.

Julian Melton, who graduated from N.C. Central University in December, worked a 4 to 8 a.m. shift at FedEx and an afternoon and evening job at a Kroger’s during his junior and senior years, with classes in between. He’d sleep or study in his car during breaks.

He said his scholarship and student loan just about covered his expenses, but he worked long hours to send money home to help his mother, who was ill. He said he couldn’t have asked her to take out loans. He’s now working at Time Warner Cable in Morrisville, getting ready to pay back his own loans and looking ahead to getting a master’s degree.

Jaleel Hunt, who also attended North Carolina Central, worked for a professor on campus but left school at the beginning of his senior year because his financial aid and employment still did not cover his costs.

Hunt said he had could have asked his family about a PLUS loan, but he “didn’t want to put my parents in that financial situation.” Today he is writing fiction and pushing wheelchairs at Piedmont Triad Airport in Greensboro. He wants to write for a living and doesn’t plan to return to school even though he feels “it was worth every penny, even though I’m in debt.”

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