The National Urban League has praised the Department of Education's proposed revision to its student loan underwriting standards. 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. In a letter to Secretary of Education Arne Duncan, Urban League President Marc Morial wrote:
"As the nation’s largest historic civil rights and urban advocacy organization—with 95 affiliates across 35 states and the District of Columbia—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 Department’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 “adverse credit history” 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 administration’s commitment to keeping college accessible and affordable for all students.
Click here to read the full press release on the National Urban League Washington Bureau website.
