CBC Chair Marcia L. Fudge's Statement on Adverse Impact of Changes to the Parent PLUS Loan Program

Statement

Congressional Black Caucus (CBC) Chair Marcia L. Fudge (OH-11) released the following statement regarding changes made by the Department of Education (ED) to the Federal Parent PLUS Loan program that has disproportionately and adversely impacted thousands of students and the Historically Black Colleges and University (HBCU) community:

"The CBC continues to urge the Department of Education to address the economic disaster facing the HBCU community caused by changes in the eligibility criteria of the Parent PLUS Loan program. While the Department moves to remedy this issue through the regulatory process, it is critical that the Administration use every option to minimize the urgent and adverse impact on our nation's HBCUs.

"In fall 2011, the Department of Education issued an internal guidance that tightened the eligibility criteria for the Federal Parent PLUS Loan program. This change happened quietly, without a request by the ED for public comment, a public release or communication with financial student aid administrators about the change. These changes had devastating effects on the HBCU community. Students who had been previously approved for the Parent PLUS loan one year were rejected the next year with no significant change in their family's financial status and with little clarity on why they were no longer eligible for the loan. Student enrollment at HBCUs dropped which resulted in a loss of nearly $150 million for the HBCU community. The rejection rate for students applying for Parent PLUS Loans has nearly doubled. Thousands of students, particularly those who attended HBCUs, have had to abruptly leave school with no clear path to returning.

"Over the past eight months, the CBC has regularly engaged the ED regarding the change of eligibility requirements for Parent PLUS Loans. In May, Rep. Corrine Brown (FL-05), Rep. Danny Davis (IL-07) and Rep. Cedric Richmond (LA-02) submitted oral comments to the ED on the issue of "adverse credit" and the impact it has had on HBCUs. At the request of the CBC, the ED held a negotiated rulemaking hearing on June 14, 2013 at Spelman College in Atlanta. There, 17 schools testified to the hardships endured since the PLUS Loan eligibility requirements have changed. The CBC also sent a letter for comment to the ED with proposed fixes for the Parent PLUS Loan program with details of how this change undermines President Obama's goal for America to have the greatest number of college graduates in the world by 2020.

"Once again, the Congressional Black Caucus asks Secretary Arnie Duncan and the Department of Education to take a serious look at the process it took in altering the Parent PLUS Loan program without regard to its potential impact on schools and their students. And, given the considerable evidence on how this change has abruptly halted higher education for thousands of students from low income and middle class families, we also ask for an immediate fix so they can return to school."

Source