President Barack Obama signs an executive order for the White House Initiative on Historically Black Colleges and Universities in the East Room at the White House in Washington, D.C., on Feb. 26, 2010. (Jewel Samad/AFP/Getty Images)
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New underwriting standards enacted in October 2011 to PLUS loans made it tougher for parents with lackluster credit to borrow money from the federal government for their child's college expenses. Families of students at HBCUs were twice as likely to use the program, according to the Associated Press, but previous borrowers were not grandfathered in with the old standards.
The change meant borrowers who currently hold loans would have their credit evaluated retroactively to cover the previous five years, rather than the previous 90 days, Inside Higher Ed reports.
With the policies now in effect and forcing some students out of college, HBCUs are considering legal action over the new rules.
"We're going to continue to pursue the legislative process to find a better solution," Johnny C. Taylor, president and CEO of the Thurgood Marshall College Fund, told the Washington Times. "[But] if at some point we determine that there is no agreement, then we may have to consider going to the courts."
HBCUs typically don't have sufficiently robust endowment funds to offer their own financial aid to replace loans. The combined endowments of all HBCUs is $1.6 billion, which is less than Ohio State University's $2 billion fund and far below Harvard's $19 billion, according to The Grio.
At the same time, the Pell Grant currently covers the smallest portion of college costs in the program's history. A 2011 FastWeb analysis found that Pell Grant recipients are more likely to be minorities [PDF], making every other source of financial aid even more critical.
Source: Huffington Post Black Voices | Tyler Kingkade