Students at historically black colleges such as Clark Atlanta are feeling the burden of changes to a federal loan program from 2011. New requirements for federal parent PLUS loans means fewer HBCU students now qualify.
Students at historically black colleges such as Clark Atlanta are feeling the burden of changes to a federal loan program from 2011. New requirements for federal parent PLUS loans means fewer HBCU students now qualify. - 
Listen To The Story
Marketplace

Several U.S. colleges have seen declining enrollment since the recession began. But changes to a federal loan program in 2011 have hit some historically black colleges and universities especially hard.

Clark Atlanta sophomore Jasmine Johnson says waiting for a federal Parent PLUS loan to be approved can be stressful.

“My freshman year when I got here, I didn’t have enough money because my Parent PLUS hadn’t been approved yet. They didn’t let me move in my dorm, and I was like, ‘Where am I supposed to go?’” Johnson says. “’I have no family in Atlanta,’ and they just were like, ‘Well, you can’t move in.’”

The new PLUS loan requirements mean fewer HBCU students now qualify. In a two-year period, Clark Atlanta’s enrollment dropped about 13 percent.

“It’s not like they’re Ohio State, with over 100,000 students,” says University of Pennsylvania professor and HBCU expert Marybeth Gasman. “An institution like Prairie View, for example, in Prairie View, Texas, has about 8,000 students. If they lose 100, 200, 300 students, they’re going to feel an impact.”

Gasman says federal officials didn't warn schools about the changes. She says HBCUs really felt the squeeze because they serve a higher number of low-income students who need to apply for loans.

The changes initially caused a 6 percent enrollment drop at Howard University in Washington, D.C. The school lost about $17 million in revenue, resulting in Moody’s downgrading its credit rating.

Graphic courtesy of Public Broadcasting Atlanta.

Lenora Jackson is the director of financial aid at Atlanta’s Spelman College. She says the changes initially impacted about 200 of the school’s 2,000 students.

“Two hundred students not coming back does affect the bottom line of our budget,” Jackson says. “So, we had to come up with some very strategic ways of getting those students back in school.”

Jackson says Spelman was proactive. The school offered students scholarships to make up the gap and coached parents on how to seek an appeal.

Atlanta’s Morehouse College, on the other hand, had to cut $2.5 million from its budget. That meant laying off 50 employees.

Gasman says it’s not a crisis yet. Enrollment is up at some HBCUs. But, she says, if schools like Morehouse and Spelman cant recover, the effects could be widespread.

“If we did not have these institutions, we would have a huge drop in the number of these students becoming doctors, becoming pharmacists, becoming scientists,” she says.

Federal officials recently published changes to the PLUS loan. The new standards would relax some of the loan’s credit requirements starting in the fall of 2015.