Obama Administration Plans Changes to Parent PLUS Loans - Higher Education

Obama Administration Plans Changes to Parent PLUS Loans - Higher Education: In response to outcries from congressional leaders, organizations, parents and students, the U.S. Department of Education plans to make changes to the PLUS loan programs to address the growing crisis in higher education that has blocked as many as 400,000 students nationwide from enrolling in college, according to figures from the United Negro College Fund.

Since the fall of 2012, parent loans have been getting denied after unexpected changes to credit requirements, stemming a major ripple effect. Historically Black Colleges and Universities (HBCUs) were disproportionately impacted by the change in guidelines for credit worthiness, causing 28,000 students attending HBCUs to be denied loans. As a result, HBCUs collectively lost more than $150 million.

The 19-percent drop in funding due to loan denials for HBCUs included losses such as $2 million at Spelman College, $3 million at Morehouse College, $4 million at Morgan State University and $6 million at Hampton University over a one-year period.
Dr. William Harvey, president of Hampton University and chair of President Obama’s HBCU Board of Advisors, said that HBCUs were  in “the worst situation I’ve seen in 35 years” at the annual conference in April of the National Association for Equal Opportunity (NAFEO).