22 Black Colleges Risk Losing Student Loan Eligibility Status

Twenty-two historically Black colleges and universities (HBCUs) could lose their eligibility status for federal student loan programs unless the percentage of default among their loan recipients declines.

A January 21 report issued by the U.S. General Accounting Office (GAO) indicates that the average default rate at HBCUs was 211 percent, nearly three times the rate of all other non-profit colleges participating in federal student loan programs.

Currently, federal law requires that colleges with default rates in excess of 25 percent for three consecutive years must lose their eligibility to participate in federal student loan programs. However, HBCUs are exempt from the law until July 1, 1998. Nevertheless, legislators must soon decide whether to extend that exemption is linked to the Higher Education Act, which expires in September 1997.

The GAO report mentions that a loss of eligibility could create havoc at many HBCUs by making it difficult for students to pay tuition.

For a copy of Student Loans: Default Rates at Historically Black Colleges and Universities, contact the GAO at P.O. Box 6015 Gaithersburg, MD 20884-6015. Initial copies are free, but additional copies are $2 each. The report also can be ordered at http://www.gao.gov on the Internet.

HSIs Seek Same Default Protection as HBCUs

Hispanic-serving institutions (HSIs) should receive the same protections from federal default sanctions as historically Black colleges and universities (HBCUs), according to legislation introduced in the early days of the 105th Congress.

The bill proposed by Rep. Jose Serrano (E)-N.Y.) would amend the Higher Education Act (HEA) to include the same exemptions HBCUs currently enjoy. HBCUs and tribal colleges are exempt -- through 1998 -- from federal sanctions that deny high-default schools access to student loan programs and, in some cases, grant programs as well.