College and university officials across the nation are getting anxious over the potential financial damage they face this fall if the federal government stands its ground in declining thousands of applications for parental loans to help students in college and stiffening rules governing other grant and loan programs.
“The early figures are not looking good,” said Dr. Lezli Baskerville, president and chief executive officer of the National Association for Equal Opportunity in Higher Education (NAFEO), echoing the sentiments of others. NAFEO is taking a survey of its more than 100-member institution, she said, explaining that “the pattern that existed in the last semester appears to be continuing.”
In the late summer of 2012, thousands of students and their institutions had based their college aspirations on the ability of their parents to renew or secure new federal loans through the Department of Education’s Parent Plus Loan (PPL) program.
At enrollment time, they were shocked to learn new and tighter loan rules took effect a few months earlier and disqualified them from securing the anticipated funds. At HBCUs alone, more than 12,000 students were affected at institutions of every stature and size, collectively costing the institutions tens of millions of dollars in anticipated income.
“We were blindsided by the volume of denials and scrambled for answers and ways to assist students,” said Akua Matherson, associate vice chancellor for enrollment management at North Carolina A&T State University.
In her comments last month, at a Department of Education field hearing in Atlanta, Matherson said the university processed 2,691 PPL loan applications for the fall of 2012. The government rejected 2,093 of the applications based on the new rules. The university’s experience mirrored that of most institutions with students whose parents relied on the PPL program.
The heightened sense of worry today stems from the fact that the Department of Education shows no sign of yielding in time for the coming school year. It has held four public hearings on the negative impact of the new rules, including the one in Atlanta, and said it is still receiving public comments with the aim of a negotiated revision of the new rules. That approach could stretch into next year, said Baskerville and others.
