Across the country, admission rates at the nation’s 105 historically Black colleges and universities are declining. For-profit schools, such as the University of Phoenix and Ashford University, are now a prominent source of baccalaureate degrees, with historically Black schools serving only 11 percent of the African-American student population. Enrollment for spring 2013 in the nation’s Black colleges dropped 2.3 percent compared to last year, and the effort to fill seats is becoming more and more desperate.
An example is Morehouse College, the all-male Atlanta college famed for educating many of the leaders of the African-American community, including Rev. Martin Luther King Jr. Since 2007, Morehouse’s enrollment has dropped almost 16 percent to 2,300 students. Morehouse has published goals of an enrollment of 2,600 students. For the fall of 2012, only one-third of all accepted Morehouse students actually enrolled, a drop from nearly half in 2008.
Things were made worse when, in the fall of 2012, more than 100 Morehouse students chose not to attend after their parents’ loans through the federal Plus program were denied. In 2011, qualification requirements for the Plus Loan were changed so that any adverse credit history — such as a bankruptcy discharge in the last five years, voluntary surrendering of possession to avoid repossession in the last five years, repossession, foreclosure, surrendering of mortgaged property to the lender, accounts 90 days past due or referral to a collection agency — would trigger an automatic rejection of the application.
At Philander Smith College in Arkansas, Plus Loan denials jumped 75 percent from 2011 to 2012.
“That 75 percent equates to about 112 students that could have potentially borrowed, and that could have been the difference to allow them to enroll,” said David Page, vice president for enrollment management and director of financial aid for Philander Smith. He estimated that this caused about 50 students to not return to the school.
During the Great Recession, Black families were hit harder by the financial crunch than families of other demographics. In addition, a disproportionate number of African-Americans were targeted by sub-prime mortgages that ultimately defaulted. This leaves African-American families more likely to have broken credit, and therefore be disenfranchised by the new Plus Loan policy.
This lack of federal funding for Black students is causing a situation in which the school must absorb more of the financial obligation for at-need students. This is problematic, as historically Black colleges generally have fewer resources than other institutions.
Among colleges and universities rated by Moody’s Investors Service, the average historically Black institution held $49 million in cash and investments, while a typical non-Black institution held $200 million, according to The Chronicle of Higher Education.
Morehouse has an endowment of about $140 million. In comparison, Amherst College — a comparable school of about 1,800 students — had a 2012 endowment of about $1.6 billion. The largest of the historically Black colleges, Howard University, has an endowment of nearly $461 million, the 159th-largest out of 843 schools profiled by the National Association of College and University Business Officers. The national average endowment is $492 million.
Low alumni support is also leaving many Black schools desperate for money. Only 5 to 11 percent of all alumni donate to historically Black schools, compared to more than 20 percent in predominantly White colleges. This is causing a talent drain among the institutions as the higher-performing students head to other schools able to offer more adequate financial aid. This means that a larger share of the students attending Black colleges are underprepared, leading to lower graduation and retention rates.
“There were 20,000 African-American male high-school graduates last year with admissions profiles best-suited for Morehouse College,” said John S. Wilson, president of Morehouse College in an interview with The Chronicle of Higher Education. “We got less than 15 percent of them to apply.”
For small schools, as historically Black colleges tend to be, fewer students means less tuition, which means significant cutbacks in services and upkeep.
The government’s responses
The Congressional Black Caucus asked President Barack Obama on Tuesday to address the problems with the Plus Loans’ qualification requirements. The chair of the caucus, Rep. Marcia Fudge (D-Ohio), indicated that the president assured the caucus that he would address their concerns.
“He knows it’s a major issue and how it has affected not only HBCUs but children of poor parents or who live in poor communities more than any other group of people. So he’s very clear and aware of what the issue is and he’s very receptive in trying to get a solution to the problem,” Fudge said.
Fudge has indicated that she expects the Department of Education to get back to her next week.
Rep. James Clyburn (D-S.C.) said the president was very receptive to the issue.
“We are all concerned about that. I’ve had schools in my district that have loss 500 students,” Clyburn said.
The United Negro College Fund estimates that 400,000 students nationwide, including 28,000 students at historically Black schools, were initially denied Plus Loans.
The Department of Education has indicated in its documentation that students who have been denied Plus Loans will be offered additional loans through other federal channels. However, these loans are capped at $4,000, while Plus Loans have no borrowing limits. The department has also began to send notices to denied parents explaining how they can have their credit check reconsidered.
Justin Hamilton, an Education Department spokesman, said that the changes in loan qualifications put the department in line with industry standards.
“The Obama administration is committed to ensuring that students have access to higher education and the skills they need to get a good job,” Hamilton said in a statement. “We’re also committed to high standards when it comes to managing taxpayer dollars and to ensuring that families aren’t taking on debt beyond what they can afford.”
Loans from students at historically Black colleges have a higher rate of default than loans to students from other schools, according to the Education Department. Thirty percent of borrowers from historically Black colleges defaulted on their Plus Loan in 2001, compared to 11 percent in total.
The historically Black college designation was established under the Education Act of 1965 to distinguish colleges and universities whose primary purpose is the education of African-American students. These schools are eligible for additional federal funding. Despite the moniker, historically Black schools do not discriminate against enrollment of non-Black students, and many have significant or even predominant non-Black populations.
For example, West Virginia’s two public historically Black schools are predominantly White. Bluefield State College’s student body is only 12 percent Black, while West Virginia State University is just 17 percent Black.
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