Economic Policy


PLUS Problems for HBCUs

Dianne Hayes’ article “Obama Administration Plans Changes to Parent PLUS Loans” explains that Historically Black Colleges and Universities (HBCUs) have seen a 19% drop in funding due to student loan denials as a result of the U.S. Department of Education’s change in the eligibility requirements for Parent PLUS loans.  Many parents who previously used the PLUS loans were denied and could not cover the cost of their children attending college according to Allie Bidwell’s US News and World Report article.  Bidwell explains that proponents of the change indicate that new eligibility requirements address the issue of families borrowing more than they can afford to repay because previously there was no cap on the amount of the PLUS loans that could be taken out.  The same article notes that opponents of the change say that many students from low-income families will no longer be able to afford the cost of college.

Hayes explains that civic organizations including the Congressional Black Caucus, NAFEO, UNCF, Thurgood Marshall College Fund, as well as parents and students put pressure on the U.S. Department of Education to address the drastic change in PLUS loan eligibility.  In response, the U.S. Department now qualifies families with recent but small-scale debt for PLUS loans by appeal.

The United Negro College Fund (UNCF) says more changes need to be made.  The UNCF’s report “An Urgent Crisis Facing Students at the Nation’s HBCUs” suggests the U. S. Department of Education take the following remedial steps:

  • Immediately restore old eligibility criteria & grandfather in students who previously received Parent PLUS loans
  • In the short term, provide alternative means by which families can pay for college & meet with HBCU presidents to devise a better plan
  • In the long term: “implement statutory changes to improve the PLUS Loan program”

Patrice Garnette, Joint Center Graduate Scholar, The George Washington University Law School