FOR IMMEDIATE RELEASE

Thursday, October 17, 2013

CONTACTS:

Jennifer Parker, NAACP Legal Defense Fund
JParker@NAACPLDF.ORG

Joi Ridley, UNCF
Joi.Ridley@UNCF.org

NAACP Legal Defense and Educational Fund Expresses Solidarity and Support to Students Adversely Affected by Parent PLUS Loan Changes

LDF provides $20,000 to bolster UNCF's CESA efforts; funds directly benefit students of Morgan State and Howard Universities


NEW YORK (October 17, 2013) -- The NAACP Legal Defense and Educational Fund (LDF), in collaboration with UNCF (the United Negro College Fund), has agreed to allocate $20,000 from its endowed scholarship programs to benefit students at Morgan State University and Howard University, and also to strengthen UNCF's Campaign for Emergency Student Aid (CESA), in recognition of the financial devastation that recent changes to the Parent PLUS Loan program have wrought on these students and their families.

In the 2012-2013 academic year, out of 400,000 Parent PLUS applicants that were denied nationally, including 28,000 HBCU PLUS loan applicants, fewer than 1,900 HBCU applicants (less than 10 percent) were reconsidered and approved for PLUS loans. Based on preliminary 2013-14 Department of Education (DoE) data, tougher eligibility criteria for Parent PLUS loans continue to block the educational aspirations of HBCU students in the new academic year. With two of three applicants denied for the 2013-14 year, a comparable number are likely to be rejected.

"We should all make an effort to help ameliorate the financial catastrophe faced by college students at HBCUs as a result of the new PLUS loan standards." said Sherrilyn Ifill, President and Director-Counsel of the NAACP Legal Defense Fund. "We regard this contribution as vital because of the invaluable role HBCUs play in African-American educational and economic achievement. No student should be denied a college education because of an inability to pay, especially because college education is directly tied to economic opportunity and advancement."

Parent PLUS is a federal loan program established to help ensure that students who need additional financial assistance after receiving Pell Grants and Stafford loans are able to attend college and earn a degree. Parents who do not have an "adverse credit history" as defined by the DoE can obtain Parent PLUS loans to cover the undergraduate college-related expenses of their children up to the full cost of attendance after other grant and loan aid is deducted.

In October 2011, DoE changed its interpretation of the regulatory definition of "adverse credit history" without providing meaningful advance notice, conducting an impact analysis or seeking stakeholder input. Under the new interpretation, parents with "charge offs" and accounts in collections within the past five years may not receive loans. As a result of these revised Parent PLUS eligibility criteria, college-going plans of thousands of students were disrupted last year when they learned that their parents could not obtain the loans needed to fully cover their tuition and fees for the year. In many cases, parents who had obtained loans for their children in the prior academic year were denied loans for the 2012-2013 academic year. DoE's change to the eligibility requirements for the Parent PLUS Loan program has hit thousands of families hard as they discover they no longer qualify for financial support to go to college.

"In far too many instances, students have been left without financial assistance for their education as the academic year begins. So far, preliminary 2013-14 Department of Education data shows, 68 percen--two out of three--or more than 39,000 HBCU PLUS loan applications-- have been denied. Only 11 percent of the HBCU PLUS loan applicants who initially were denied a loan were deemed by the government to be eligible to appeal; and only 10 percent of those denied were approved on reconsideration," stated Dr. Michael L. Lomax, president and CEO of UNCF. "At a time when a college degree is more essential than ever to compete in the global economy, the Parent PLUS Loan crisis has undermined the dreams of many young Americans and their families. Current Parent PLUS loan measures have made it more difficult for parents to assist their students in paying for college. We deeply appreciate the NAACP Legal & Educational Defense Fund's efforts to minimize disastrous consequences for black colleges and students alike, and to invest in the Better Futures of these college-ready students have committed to their educational pursuits and worked toward their goals."

Grants of $1,000 each will enable 10 students at Baltimore's Morgan State University to fill a small, but unmanageable gap in funds resulting from the denial of PLUS loans. Morgan State launched an emergency campaign to raise money from its alumni. LDF will also donate $5,000 to assist students at Washington D.C.'s Howard University.

"We are grateful for the investment that the NAACP Legal Defense Fund is making in our students. The support offered by the Fund will go a long way in assisting needy students to enter or remain at Morgan," said Dr. David Wilson, President of Morgan State University.

"I am pleased to accept the $5,000 contribution from the NAACP Legal Defense and Educational Fund, Inc. for use as scholarship aid for Howard students whose Parent PLUS loan requests were denied," said Howard University's president, Dr. Sidney Ribeau. "The contribution will facilitate our Bridging the Gap campaign, designed to close the financial aid gap faced by needy and deserving students. In addition to the generous LDF contribution, we are thankful for their advocacy, as well as that of UNCF, the Thurgood Marshall Fund, and other organizations in support of revised federal Parent PLUS loan eligibility criteria."

LDF's Herbert Lehman and Earl Warren scholarship programs have provided individual scholarship awards to undergraduate and law students since 1964. This year, LDF awarded scholarships ranging from $2,000 to $3,000 to Herbert Lehman and Earl Warren scholars who will attend public and private colleges and law schools throughout the country. By dedicating a portion of its scholarship funds to HBCU students this year, LDF will help students close their financial aid gap as a result of the changes to the Parent PLUS Loan program.

Parent PLUS loans were designed to provide loans to parents and students unable to obtain private loans. "Making the standards for PLUS loans consistent with those of loans on the open market is contrary to the very purpose of the program," Ifill added.

But, according to a Washington Post analysis, the volume of Parent PLUS loans to HBCU families dropped by 36 percent in the 2012-2013 school year. HBCUs have lost $150 million in anticipated revenue. Most importantly, thousands of students have found themselves with insufficient funds to attend college.

The families of HBCU students are often impacted by low unemployment rates, loss of wealth, and the housing crisis during the 2008 recession. UNCF's CESA program was developed in 2009 in response to the recession. Then, as now, economic downturns hurt vulnerable groups more than any others, including the 57,000 students at UNCF member institutions, more than half of whom come from families making less than $30,000. These students and their families in particular are most likely to be negatively impacted by tougher credit standards like this one. CESA ensures that these students receive the funds they need to stay in school, graduate, and become our next generation of leaders. CESA has raised nearly $21 million from more than 10,000 donors, and has awarded more than 8,700 education-saving CESA scholarships.

"LDF has set a great example of concerned citizens standing in the gap for students during this difficult time. Yet, as this crisis persists, we need more people to give to CESA to ensure we don't lose our next generation of teachers, scientists, businesswomen and businessmen and doctors and nurses. Their success is the dividend on our investment in their futures," Lomax said.

HBCUs comprise three percent of America's colleges and universities, but produce half of the country's black public-school teachers, 80 percent of black judges, and 40 percent of baccalaureate degrees awarded to students in science, technology, engineering, and mathematics (STEM) fields.

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The NAACP Legal Defense and Educational Fund, Inc is the nation's premiere civil rights law firm. LDF, a separate entity from the NAACP, was founded in 1940 by Thurgood Marshall. LDF litigated and won Brown v. Board of Education.

UNCF (United Negro College Fund) is the nation's largest and most effective minority education organization. To serve youth, the community and the nation, UNCF supports students' education and development through scholarships and other programs, strengthens its 37 member colleges and universities, and advocates for the importance of minority education and college readiness. UNCF institutions and other historically black colleges and universities are highly effective, awarding 20 percent of African American baccalaureate degrees. UNCF administers more than 400 programs, including scholarship, internship and fellowship, mentoring, summer enrichment, and curriculum and faculty development programs. Today, UNCF supports more than 60,000 students at over 900 colleges and universities across the country. Its logo features the UNCF torch of leadership in education and its widely recognized motto, "A mind is a terrible thing to waste."® Learn more at www.UNCF.org

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