The National Urban League has praised the Department of Education’s proposed revision to its student loan underwriting standards.Â The proposed revision incorporates recommendations made earlier this year by the Urban League, HBCUs and other stakeholders to amend the interpretation of “adverse credit history” and make it easier for low-income students to obtain federal aid. Â Â In a letter to Secretary of Education Arne Duncan, Urban League President Marc Morial wrote:
“As the nationâ€™s largest historic civil rights and urban advocacy organizationâ€”with 95 affiliates across 35 states and the District of Columbiaâ€”the National Urban League has a long history of supporting initiatives that increase equity and opportunity for underserved communities. Access to a postsecondary education is at the core of our economic empowerment mission. That is why we are pleased to offer comments on the Departmentâ€™s proposed Parent PLUS Loan regulation, which will re-open the program to thousands of financially needy students. Today, we write to express our strong support for the proposed rule and ask that you implement the final rule no later than January 1, 2015.
“In formal comments to the Department last year, we joined the civil rights and HBCU community in asking the Department to reconsider the changes it made to the Parent PLUS loan eligibility requirements in October 2011. We also expressed concern that the process undergone to revise these standards did not include input from stakeholders that would be impacted by the revisions. Regrettably, these new changes resulted in loan denials for at least 400,000 students nationwide including 28,000 HBCU students. Many of these low income students who were denied loans were forced to postpone their first year of college because they lacked the means to pay for their college costs. In addition, these loan denials increased the financial stress already faced by HBCUs across the country; many of whom were driven to provide emergency aid to students who were denied PLUS loans.
“We are pleased the Department took our comments into consideration and revised its interpretation of â€œadverse credit historyâ€ with input from the HBCU community and other stakeholders during its negotiated rulemaking process this year. This proposed regulation helps improve access to college for underserved students and repairs the damage that was done by the credit requirement changes implemented in 2011. It incorporates reasonable underwriting standards while abandoning strict guidelines on parent credit history. It also creates loan counseling requirements for some parents to help them avoid borrowing more than they can manage. Furthermore, it makes additional improvements by shortening the credit check review period. We believe these changes reflect the administrationâ€™s commitment to keeping college accessible and affordable for all students.
“In our recent report, From Access to Completion, we present various recommendations that seek to improve college success of African American students nationwide. The Parent PLUS Loan program is a significant financial resource that is used by many African American students to bridge the unmet need that remains even after accounting for total grant aid and expected family contribution. We share the Departmentâ€™s commitment to helping make college affordable and believe the proposed rule will positively impact the communities we serve. As the wealth gap continues to grow in this country, access to a quality education is key to supporting upward mobility and income growth. We look forward to continue working with you to identify and pursue solutions that make college accessible and affordable for all underserved communities.
“We hope the Department is able to implement the final rule no later than January 1, 2015 and stand ready to partner with you on an awareness and outreach campaign to assist both students and parents in understanding the impact of these new eligibility rules.”