SEVEN AND ONE HALF MILLION COLLEGE STUDENTS DEALT ANOTHER BLOW TO THEIR COLLEGE DREAMS AND FUTURE
Media - Newsroom/Press
Washington, DC (July 1, 2013) – With student loan interest rates doubling today, the Thurgood Marshall College Fund (TMCF) is frustrated that once again college students, especially African American students, are at the brunt of political posturing.
Over seven million college students had faith in our country’s elected leaders to do what’s right and make college affordable and accessible for everyone. However, millions of students will now see their future career goals evaporate at the hands of politics as the interest rates on new subsidized loans double.
“It is disappointing to continue watching college access for many students just slip away, especially the country’s neediest college students,” said TMCF President & CEO Johnny C. Taylor, Jr. “First we had the Parent Plus Loan (PPL) crisis that immediately forced over 14,000 students attending Historically Black Colleges and Universities (HBCUs) out of school. Now we have an increase in Federal College Loan interest rates that will affect the college dreams of millions come this Fall.”
In 2010, President Obama signed legislation to expand college access for millions of students by revamping the federal student loan program in what he called “one of the most significant investments in higher education since the G.I. Bill.” However, and without warning, this legislation overhauled the federal government’s student loan program to include implementing changes to the approval and administration of its Parent Plus Loan program. While the Department of Education has always denied PPL applications (to include parents) with negative credit history, the new changes include reviewing parents’ credit history for a period of five years versus 90 days as previously examined.
On July 6, 2012, the President signed the Federal Student Loan Rates Extension, which temporarily stopped the interest rates of federal student loans from increasing. Nevertheless, as Congress adjourned on June 27th, and headed home for the July 4th recess this year, some 7.5 million students with an average of $1,000 in loan payments are now faced with a loan interest rate increase from 3.5 percent to 6.8 percent.
As the federal government stands to gain some $51 billion in profits from student loans this year, all of these changes come on the heels of a sluggish economic rebound. College students [many classified as juniors and seniors] are now forced to watch their college graduation dreams slip away. CNNMoney reported [June 21, 2012] that Black and Hispanic Americans have historically had lower incomes, higher unemployment and less education. Thus, African-American students will be among those hit the hardest as many of them are being denied loans because of their parent’s blemished credit histories due to an economic downturn and the higher unemployment rates for African Americans.
Ironically though, students will not be the only ones affected by these changes – colleges and universities will be hit hard as well. Many HBCUs are hurting financially as a result of students unable to secure loans or afford high interest loans to pay for their education. When students can’t afford to carry out their college dreams, they drop out or do not enroll. As this happens, many of HBCUs, including some of our most revered and productive institutions, are being forced to furlough and lay-off faculty and, in some cases, even close their doors.
“While the student loan interest rate will require a joint agreement between Congress and the Administration, we urge President Obama and Secretary Duncan to reverse their policy on PPL to prevent another 14,000 students from losing their college dreams of attending an HBCU.” Taylor continued. “The Parent Plus Loan changes have a domino effect and are hurting HBCUs, their students, and the African American community at a time when all are quite fragile and attempting to recover from the worse five-year-period in our country’s history.”
TMCF has been at the forefront on these student loan issues, urging the Obama Administration and specifically the Department of Education to make changes to the PPL approval process to include grandfathering the approval rules for those already in college as well as agreeing to a plan that would extend college loan rates. A year later there are still no solutions.
“In some instances with the PPL crisis, students were a semester away from graduating. It is absolutely absurd for us to think it makes sense to not to find a solution, Taylor concluded. “I am shocked and dismayed that more people are not in an uproar!”
About the Thurgood Marshall College Fund
Thurgood Marshall College Fund (TMCF) is named for the U.S. Supreme Court's first African-American Justice. Established in 1987, TMCF supports and represents nearly 300,000 students attending its 47 member-schools that include public Historically Black Colleges and Universities (HBCUs), medical schools and law schools. TMCF helps students with a clear intention and the motivation to succeed and acquire a high-quality college education at an affordable cost. TMCF is a 501(c) (3) tax-exempt, charitable organization and for more information about TMCF and its initiatives, visit www.ThurgoodMarshallCollegeFund.org.