Study: Appeals Process Appears to Boost PLUS Participation at HBCUs

By Allie Bidwell, Communications Staff

After the Department of Education (ED) in 2011 tightened the credit standards for receiving PLUS loans negatively impacted students at historically black colleges and universities (HBCUs), a slight course-correction two years later appears to have slightly increased the number of PLUS recipients, though decreases in enrollment have not yet rebounded. Those findings come from a follow-up study published by REL Mid-Atlantic, a division of the Department of Education’s (ED) Institute of Education Sciences.

In the study, researchers from Mathematica Policy Research – Matthew Johnson, Julie Bruch, and Brian Gill – examined how PLUS participation and enrollment at HBCUs shifted following changes to the appeals process for families denied PLUS loans. After ED initially tightened the credit standards for receiving a PLUS loan, many students whose parents were previously eligible were denied the loan the following year.

The number of PLUS loan recipients at HBCUs declined by nearly 46 percent between 2011-12 and 2012-13, resulting in an average loss of 203 recipients per institution. At the same time, other forms of Title IV aid – such as Perkins loans and Federal Work-Study aid – did not increase enough to cover the gap. Between 2011-12 and 2012-13, Direct unsubsidized loan borrowing increased by $15.7 million, and undergraduate enrollment at HBCUs decreased by 3.4 percent, resulting in an average loss of 97 students per institution.

The year following the change to the appeals process, 2013-14, PLUS participation at HBCUs increased slightly – though not enough to recover from the previous year’s decrease – and unsubsidized loan borrowing decreased. However, total enrollment at HBCUs continued to decline, although at a slower pace than the previous year.

“There are many possible explanations for the continued decline in HBCU enrollment during 2013/14,” the study said. “Some students may have left HBCUs after their parents were denied a PLUS loan for a second consecutive year. Other factors unrelated to PLUS loans could also have contributed to the decline in HBCU enrollment,” such as a change to the Pell Grant program that reduced both the maximum number of years a student could receive a Pell Grant and the maximum adjusted gross income to receive the maximum award.


Publication Date: 2/17/2017

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