When Howard University began putting the final details on enrollment for the 2012-13 school year this time a year ago, it had no idea it would soon face a last-minute flood of students unable to enroll due to a tightening of requirements in a federal loan program for parents seeking to help pay their children’s tuition.
More middle income and poor households had been hit hard by the nation’s economic downturn since 2007 with family incomes falling fast and living costs continuing to rise, Howard and many of its peer institutions learned. With college educations, many financed with the federal loan called Parent Plus Loan (PPL) suddenly unaffordable, Howard and its peers saw fall enrollment drop by the thousands nationwide. The institutions’ anticipated income fell accordingly.
For Howard, the PPL decision by the United States Department of Education costs the university hundreds of students and roughly $8 million in anticipated income for the 2012-2013 school year. The PPL decision jolted the university just as it was resettling from a rough launch two years ago of a plan for downsizing and refocusing the university for the future. Those various aspects — hiring, student financial aid and “controllable operations” — of what the university called its “renewal” plan ran over budget by more than $30 million.
Today, as Howard readies for another school year, a more threatening cluster of storm clouds appear to be gathering over the prestigious institution, founded in the post-Civil War era with a guaranteed annual allocation (about 25 percent of its annual budget) from the federal government and since considered invincible.
The PPL crisis, which is directly impacting income, retention and graduation rates for schools, is worsening for Howard. Early financial aid results show the PPL loan rejection rate for parents of Howard student applicants so far is 10 percent higher for 2013-14 school year applicants than was the case this time a year ago.
In addition to the PPL situation, Howard, which has been allocated more than $200 million a year in the past decade, is beginning to feel the bite of the new, congressionally mandated, 5 percent, across-the-board federal budget cut. The university will see its guaranteed federal funding cut by $2 million for the current fiscal year. The guaranteed federal funding allocation cut soars to $25 million for fiscal year 2014, based on the five percent “sequestration” budget cutting law.
That doesn’t count the revenue Howard risks losing when various federal grant-making agencies reduce their budgets and grants for the federal fiscal year beginning October 1. Howard is a major benefactor of grants from the Department of Health and Human Services and National Institutes of Health.
