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Denial Of $tudent Loans Costly To Black $tudents and Colleges
Published:
8/1/2013 11:37:34 AM


Thomas J. Elzey, SCSU President
 

The fact that a college education has become a lot more expensive already prevents many Black students from entering college. Changes to the criteria for receiving federal loans now are making it almost impossible for more.

Students financial aid package can include a mix such as scholarships, federal Pell Grants for low income students and federally funded campus jobs. But that aid usually doesn’t meet all a student’s financial needs. Federal PLUS Loans from the Department of Education which are made to parents, help students fill the gap.

Since 2011 more strict credit regulations deny the loans to parents who have unpaid debts over the past five years which have been referred to collection agencies or have been ruled uncollectable.

Students at Historically Black Colleges and Universities are more likely to have received the loans, so the policy change has been felt disproportionately among those students and schools.

Loan denials have impacted traditionally Black schools such as Howard University, Florida A&M University, Prairie View A&M University, South Carolina State University and others.

At South Carolina State University student enrollment dropped by about 700 students since last year largely because of the stricter policy, said Assistant Vice President for Finance Eric Eaton.

SCSU President Thomas J. Elzy said the number of parents borrowing for their children’s education steadily has increased since 2008. Since the 2010-2011 academic year, the transition from the Federal Family Education Loan Program (FFELP) to Direct Loan Program in 2010 resulted in an increase in PLUS Loans approvals.

But since the inception of the Direct Loan Program there has been an overall reduction of nearly 21 percent on PLUS Loan approvals. As of July 10, 2013 about 952 parents of students applied for the Parents PLUS Loan, 804 were denied.

Elzy said SCSU has been severely impacted by students not receiving Parents PLUS Loans. Ninety percent of SCSU students receive some form of financial aid, he said. Most come from family households with incomes of $30,000 or less. When asked why they will not attend the school, many cite financial reasons, he said.

Elzy said in a statement Monday, “We are an institution of higher learning where dreams can come true. As president of South Carolina State University, I will do all that I can to ensure that we have support for the students that will matriculate through this university.” 
 
 
 
 


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