Life
New signature phrase for UNCF: “A Mind is a Wonderful Thing to Invest In”
In October 2011, the U.S. Department of Education toughened its definition of adverse credit, in response to an internal report warning against granting loans to those who may be incapable of repaying them. Now, parents with any accounts in collection within the last 5 years; any unpaid collection accounts; any loan defaults – even if the claim has been paid; and any defaulted contracts or leases, are ineligible for a Direct PLUS loan.
Consequently, many HBCUs are complaining that they are losing students who otherwise would be on campus.
Parents and colleges were neither consulted during decision-making, nor informed of these changes in advance. Many families who had been initially awarded funds for the 2011-2012 school year were surprised to find themselves suddenly no longer eligible for the 2012-2013 year.
“We were blindsided by the changes that, literally, from one day to the next, made many thousands of these parents ineligible for parent PLUS loans,” Lomax said. “The impact on students who depended on PLUS loans was immediate, and devastating. Many who arrived at their college dorms after summer break, in fall 2012, were literally turned away at door.”
According to Lomax, approximately 28,000 HBCU students were affected, accounting for more than half the PLUS loan denials that school year. UNCF member schools reported a US$155 million loss in revenue. As a result of public outcry, largely led by HBCUs and the Congressional Black Caucus, the U.S. Department of Education pledged a review of its credit requirements, and established a process for parents to appeal their loss of eligibility.
In the meantime, there is not enough money to go around among private aid organizations. UNCF, for example, has raised US$3.6 billion in it existence to send more than 400,000 students to college. But for every student it awards today, nine more applicants are denied.
Those who are awarded are likelier to graduate, compared to African Americans students in general. According to a report, “Building Better Futures: The Value of the UNCF Investment,” 70 percent of UNCF scholarship awardees in 2006 were likely to graduate within 6 years.
