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Thursday, March 7, 2013

Historically Black Colleges Lose Millions After Federal Loan Change

Xavier University student Triton Brown studies in a common area on campus before going to one of his part time jobs in New Orleans, Feb. 8, 2013. Thousands of students unexpectedly either had to stay at home, transfer to a less expensive school or find new money when the U.S. Department of Education quietly changed how it evaluated the credit of parents applying for a federal PLUS loan. Brown, a Milwaukee native who is a freshman at Xavier University of Louisiana, said his family was counting on a PLUS loan, but his mother's application was rejected after he had been accepted the previous semester.  (Gerald Herbert/AP)

Xavier University student Triton Brown studies in a common area on campus before going to one of his part time jobs in New Orleans, Feb. 8, 2013. Brown, a Milwaukee native who is a freshman at Xavier University of Louisiana, said his family was counting on a PLUS loan, but his mother’s application was rejected after he had been accepted the previous semester. (Gerald Herbert/AP)

Thousands of African American students at historically black colleges and universities (HBCUs) got an unexpected shock this year when their renewals for Parent PLUS loans were denied.

Those loans let parents borrow money for tuition, room and board, books and other school-related expenses.

Their parents’ credit history hadn’t changed, but the way the U.S. Department of Education reviews credit history has.

The National Association for Equal Opportunity in Higher Education estimates that 14,000 students at HBCUs were denied PLUS loans – about half the students at those schools who applied for them.

Dr. William Harvey, president of Hampton University, an historically black school in Hampton, Va., estimates that the change has cost HBCUs about $168 million.

And he says that many students have either had to drop out of school or transfer to less expensive colleges.

Mark Kantrowitz, a financial aid expert and publisher of FinAid.org, says he’s advising families to appeal the decision. He says the Department of Education will reinstate loans during appeal, if families had PLUS loans in the past.

But that still leaves new students out of luck.

Dr. Harvey, who also serves on President Obama’s advisory board for historically black colleges, says the administration has been responsive to his concerns.

He says that while the situation at the beginning of the school year was pretty dire, he feels it will ultimately be able to come up with a permanent fix to the problem.

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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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