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HBCUs Threaten to Sue Obama Administration Over Federal Loan Changes

The Obama administration may be the target of a lawsuit by the nation’s historically black colleges and universities (HBCUs), stemming from new federal financial aid policies that disproportionately affect students at the majority black institutions.

The new policies raised the criteria for parents trying to secure PLUS loans for their children’s education, subsequently making a large number of black parents ineligible.

The Associated Press reports that African-American students are twice as likely to use PLUS loans to pay for their college expenses. After new policies were put in place in October 2011, many of those same students already relying on the loan were left without funding, and forced out of school. In defense of their students, HBCUs may sue the Obama administration to force changes to the federal loan policies.

“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. “If at some point we determine that there is no agreement, then we may have to consider going to the courts.”

“We are not itching for a fight, [but] we need to do what is necessary to protect what is the most vulnerable and fragile in our society,” Taylor added.

The federal loan policy changes were made in an attempt to reduce the number of student loans entering into default. HBCU students also have a much higher rate of default compared to the rest of the country’s colleges and universities.

Data from the Department of Education indicates that 30 percent of PLUS loan borrowers from HBCUs in 2001 have defaulted, while the rate was 11 percent nationwide.

In May, President Obama is scheduled to deliver the 2013 commencement address at Morehouse College, one of the nation’s top-ranking HBCUs. The Huffington Post reports that some 500 students unable to enroll last semester at Morehouse’s neighboring Clark Atlanta University because of PLUS loan rejections.

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