interviews
Student Debt on HBCU Campuses
by Lodriguez Murray
September 29, 2020
This interview with Lodriguez Murray, the Senior Vice President for Government Affairs at UNCF, was conducted and condensed by franknews.
Lodriguez | UNCF is an organization, started in 1944, dedicated to supporting historically Black colleges and universities (HBCUs) — both the students and the schools. We provide financial support to our 37 member schools, we do a lot of work to benefit the whole of HBCUs, and every year, we award upwards of $100 million scholarship to 10,000 students at 1,100 different colleges and universities.
frank | There is a student loan debt crisis. What does the crisis look like for HBCU students in particular?
We know that HBCU students carry more debt, but many people stop the explanation there. When we stop the conversation there, it makes it seem like these schools are more expensive or more onerous for the students that choose to attend.
HBCU students carry more debt because the students are, by and large, the progeny of slaves. The debt disparity is more of a commentary on the economic injustices African-Americans have experienced over the decades, than it is a commentary on the schools.
Students at HBCUs carry more debt because those students come from statistically lower socioeconomic backgrounds than students at other schools. 75% of our student population is Pell Grant eligible. That is 20 percentage points more than at a predominantly white institution (PWI). At some of our schools upwards of 90% of our students are Pell-eligible.
Is the disparity solely within the amount that HBCU students carry, or are there differences in the interest rates and the types of loans they have?
81% of HBCU students receive some type of loan assistance to go to school. And the types of loans do really matter.
A study came out earlier this year that compared HBCU graduates with PWI graduates of the same age, same job, same income, and the same amount of loans. The students attending HBCUs were charged a higher interest rate on their loans.
We call that the HBCU paradox. Our students, because of the type of institution they chose, are "taxed" for their choice.
What explains the difference in interest rates?
To explain that, you have to look at the systematic racism in our country. Black people have a harder time accessing capital. That's a statistical fact. And when Black people access capital, it often happens at the worst rates terms and conditions.
There are financial institutions that have seen us as risky in the past, and you can extrapolate from there to understand what financial institutions do by looking at the name of the college that a student has attended.
Can you talk about the role that Parent PLUS loans play on HBCU campuses?
About half of our students in 2020 are first-generation college students. Families are doing all they can to make college happen for their kids, but due to the economic situation of many of these families have very few options. When other financial aid options are exhausted, folks look to Parent PLUS loans.
We have a sorted history with the Parent PLUS loans at UNCF. We recognize the need for students to access capital to attend school, but we also recognize the need to improve elements of the loan to make it less predatory.
One of the things you should know about that program is that it is an option that many African American students use to access education. You should also know that the Obama administration changed the rules for Parent PLUS loans to require a nearly perfect credit score in order to obtain a Parent PLUS loan. That change completely hampered the HBCU community. It negatively impacted about 400,000 students nationwide. We saw a significant decline in enrollment at HBCUs, which was financially devastating to our community.
We know that African Americans have a harder time accessing capital, and when they access it, it is at the worst rates.
So, why would you punish people who, because of their historic relationship with financial institutions, have had to accept capital at the worst rates? We fought with Congress and the administration to improve their calculations around who could access the Parent PLUS loans.
With that said, certain things should be done to improve Parent PLUS loans, and all other loans, so they no longer cause such harm to students and families.
What changes do you advocate for as an organization?
We believe student and parent loan interest rates should be reduced. We believe the origination fees should be eliminated. We believe loan interest subsidies should remain for low-income students. We believe there should be streamlined loan payment options, and that income-based loan repayment should be automatic. And we believe the federal government should make it easier for students to refinance their loans to have lower interest rates.
We believe in improving and expanding the Public Service Loan Forgiveness Program. There are a lot of HBCU students that are teachers, police, officers, firefighters.
Those graduates should have access to the Public Service Loan Forgiveness Program, but the program has been close to ineffective, no matter which administration is runnig it.
And no one has a good explanation for the program is not working well. It seems like someone's not being held accountable. There are many of students whose loans should be paid down as we speak, but they are not because that program is not working well.
Do you advocate for debt forgiveness?
We believe in debt forgiveness, but we believe it should be progressive. Why would we automatically forgive the loans of a graduate who is making $300,000 and can easily pay their loans? That makes it harder to forgive the loans of a teacher who is two years out of school making $40,000.
And when you say makes it harder — what do you mean?
It will be a bigger number and that bigger number will be harder for Congress and the American people to swallow. But if you prioritize graduates who make less money, then it is a much more attractive policymaking item.
How does the federal funding of HBCUs play into this story?
Congress invests a certain amount of money on an annual basis to help subsidize the schools. They recognize that, despite years of underfunding, HBCUs educate civilians from lower socioeconomic backgrounds and graduate them at higher rates than more well-resourced institutions.
But we know that HBCUs have been under-invested in, period.
That was especially evident when states and the federal government pulled back from investing in higher education after the Great Recession. In recent years, we have seen some reversal of that trend, but not enough to combat the chronic underinvestment in the institutions. And by chronic, I mean buildings need repairs and there are students who should have scholarships but don’t have them.
We need both the federal government and the philanthropic community to invest more in these schools. And we need to recognize that investment in our institutions yields more of a return than investment in those schools that have a billion-dollar endowment.
At the beginning of the pandemic, we were all bracing for a draconian year. After the death of George Floyd, the philanthropic community saw HBCUs and our organization as a way to right social ills. They came to us with donations, and with that money, we will be able to support more students than ever before. We've had the really largest philanthropic boom ever.
The CEO of Netflix and his wife personally gave $121 million, with $40 million going to the UNFC, $40 million going to Morehouse College, and $40 million to Spellman. Mackenzie Scott gave tens of millions of dollars to HBCUs. These kinds of moves have been terribly helpful to break the cyclical pattern.
I wonder if there are ways that you would advocate for the federal government to also fill that gap?
As a matter of fact, every major presidential candidate had policy proposals that benefited HBCUs. And we were able to educate them and convince them certain policies from four years ago were stale. For example, now all candidates, have free college proposals that include private HBCUs, as opposed to only including public institutions.
The major campaigns that remain have proposals regarding HBCU. Both political conventions prominently featured and mentioned HBCUs. That is something that has not always happened. That's not the par for the course for us. We are experiencing a new wave of people and a new wave of interest in a particular type of institution.
At first glance, you might say, do I even need to do a story on this small number of schools? But once you look at the actual impact of the schools it is evident these few schools are doing so much more than anyone would ever expect. These schools are only 3% of all the higher education institutions in the country, but they graduate around 10% of African-American bachelor's recipients. In the states where they are located, they educate a quarter of the Black graduates and they produce nearly 40% of all the Black STEM graduates. When you put those schools together and you have nearly a $15 billion economic impact on the country a year.
These schools really punch above their weight.
interviews
Money Alone Is Not Enough
by Michelle Miller-Adams
May 10, 2019
This interview with Michelle Miller-Adams, a professor and senior researcher at the Upjohn Institute, was conducted and condensed by frank news.
Part One of this conversation is available here.
When you look at and consider all of your research over the years, what is your ideal version of 'free college' programs? And how do you push what you know and what you're curious about to the forefront of our national conversation around college affordability?
As we enter another presidential primary, what would you like the conversation to look like? What do you think the most critical debate around this issue should be?
That is another great question, and actually, I'm about to start thinking seriously about it, because I'm about to write a book on this topic.
While I hope the ideas in my book will influence the national discourse, I'm not holding my breath for a national program, because I just think that politically, it's a really tough lift. If you look at the history of policy innovation in our country, this is exactly how it happens. Things get pioneered at the local level, and then they spread to other local communities, and then they may jump up to the states, and then maybe eventually, they'll find their way into federal policy. I just think that even though all the Democrats are talking about this, once they get in power, and depending who winds up in the Congress, a nationwide free-college program is not a surefire outcome.
That being said, we had a proposal in 2015 from President Obama that made a great deal of sense. To me, it's still the gold standard model out there for triangulating all of those various needs. It was called America's College Promise – no legislation was ever introduced but the policy proposal was out there. It was a federal-state partnership that would make community colleges tuition free. If states opted to participate–- and there were performance requirements if they did – the federal government would foot most of the bill. And importantly, it was designed to be a first dollar program.
That leads me to your question. I especially value programs that have universal eligibility. Basically, in programs like these, everybody can take a crack at it.
In a perfect world, which we don't live in, a first dollar program is far preferable to a last dollar program, because it has that better equity impact, where low-income students also get new money, and then they can use their Pell Grants to pay part of the way of their living expenses. If you do a universal program, and you focus it on community colleges, as Obama's program did and as Tennessee and Rhode Island do – whether first- or last-dollar – you are doing some de facto targeting. You are targeting low and moderate-income students, because honestly, Tatti, do you know many wealthy students who went to community college?
Very few.
Right. There may be a few, but that might just be the price you pay. If an affluent student is headed toward an elite or even semi-elite four-year institution, they're probably not going to make the decision to go to community college to get their $2,000 a year scholarship. On the other hand, students who weren't necessarily going anywhere, or those at the margin who are stressed in terms of finances, may decide to go to community college, and students on a four-year track may decide to start at the community college and cut their costs dramatically. Students do that all the time. I teach at a large state university, and we have plenty of students who started at a community college because it's cheaper – and then transfer to the four-year school to get their bachelor's.
Two other things are really important. One powerful lesson that we have learned over the years is that simplicity is your ally in these programs. With complex programs there's just too much confusion around the messaging. New York State has a program called the Excelsior Scholarship, and it's really innovative in one sense, which is that it allows students to go to public four-year institutions, as well as two-year community colleges, which is great. However, there is so much fine print that very few students actually qualify for the scholarship.
The simpler the better. If you can say it in a couple sentences, that's a good sign. But the other important element is this question of support. Thinking seriously about what kinds of resources are needed all along that educational continuum to help students, particularly those who haven't been successful in school, access higher ed, be successful in getting there, staying there and completing is really important.
Tennessee Promise has a mentorship program, and while the mentorship component is not as intensive as it was for the predecessor local program, it marks a recognition of the value of mentorship in helping students be successful in higher ed. Tennessee also has an adult free community college program called Tennessee Reconnect, and even that has a support structure built in. It doesn't come out of public money. It comes out of the philanthropic sector. There are a lot of ways to do this, but it's important to recognize that the money by itself is not going to change your outcomes that much.
As a short digression, I've been really busy, so I haven't been very active on Twitter, but I do want to respond to Pete Buttigieg's response…
He was pretty negative about free college. He basically said there's this huge college wage premium, where people with college degrees get paid a lot more than people who don't, and that's absolutely true. And he doesn’t like the idea of people without college degrees subsidizing those who are going to get the college wage premium. I think he misses the boat on this. The point of Promise programs is to bring those people who aren’t headed for college – whether because of confusion about the process or lack of financial resources – into the process so they can go on and get some of that college wage premium. Right?
Another presidential candidate, Elizabeth Warren, has come out with a number of big equity-based policy ideas and one of the latest is her plan for tuition-free college and student loan debt relief. Her ideas are bold and not always fully practical, but this one had an important element, which is that if we're going to make public colleges and universities tuition free, we had better also address the student loan burden. One of the challenges of free college is that if you come up with a national program, you still have all these people walking around with this huge student loan debt. So there's a real equity challenge there, if you aren't going to do something about the people who already got indebted, then it's sort of just a generational unfairness.
We're having that discussion in Michigan. Our new governor, just this week, introduced legislation for three tuition-free college initiatives, one for community colleges, one for four-year publics and one for adults, closely modeled on Tennessee, but there's no component that deals with the student debt situation, and the legislation. Because we have this very Republican Congress it's probably not going to go very far, but we'll see.
It’s a fascinating aspect of the free-college movement. A lot of money is being committed to support free-college initiatives without a lot of evidence about what they do and don’t accomplish. I know that because we sit here at ground zero of trying to generate some of that evidence, and there are many, many, many things we do not know. This is not a heavily researched, proven model where we really understand what we're doing.