Two higher education groups are advocating for colleges and universities nationwide to be reimbursed for forgiven loans under a now-defunct federal lending program; a move that could provide unexpected and significant payments to many historically black colleges and universities.
Bloomberg reports on the ask from the American Council on Education and the National Association of Student Financial Aid Administrators, which is appealing on behalf of more than 1,000 schools which participated in the Perkins Loan program until it was discontinued last September.
Guidelines required participating schools to forgive the need-based loan balances for graduates who entered the workforce in services industries like education, public safety and the military, with the condition that the schools would be paid back for the disbursements.
But according to Bloomberg, the schools may be out an estimated $250-400 million dollars.
“At larger schools, $3 million or $5 million might look relatively small in the overall amount of revenue, but these are financial aid dollars. At the very least, there’s that much less money to help low income students afford college.”Jonathan Fansmith, Director of Public Affairs with the American Council on Education. – Bloomberg
In a March 2017 letter to the leadership of the U.S. House of Representatives’ Subcommittee on Higher Education and Workforce Development, United Negro College Fund President and CEO Michael Lomax detailed a projected impact that Perkins loan amendments could have on HBCUs and their students.
“About one-third of all HBCUs participate in the Perkins Loan Program. As a result, over 10,000 HBCU students receive Perkins Loans that average $2,200 per award. With a fixed 5 percent interest rate, Perkins Loans are more desirable than more costly private loans or Parent PLUS Loans. Moreover, Perkins Loans provide an important loan cancellation benefit for students who go into public service fields, such as teaching, nursing, law enforcement, child care and the military.”UNCF President, CEO Michael Lomax