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Watt, JCSU president rip federal loan policy
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By By Jim Morrill | The Charlotte Observer

Democratic U.S. Rep. Mel Watt on Monday criticized the Obama administration’s failure to change a student loan policy that he said disproportionately hurts minority students.

It was an unusual position for Watt, normally a staunch ally of President Barack Obama, who nominated him in May to be head of the Federal Housing Finance Agency.

But Watt expressed frustration with what he called “inertia” at the U.S. Department of Education. He spoke at a news conference at Johnson C. Smith University, where he was joined by school President Ron Carter.

At issue is the 2011 change to the Parent PLUS Loan program. The changes expanded the criteria for measuring an applicant’s family credit history.

At the news conference, Carter said only 27 percent of applicants at historically black colleges were approved for a PLUS loan last year. In the 2013-2014 academic year, the figure has fallen to 7 percent.

Enrollments also have fallen. Last fall JCSU enrolled 1,801 students, the most in the university’s 146-year history. This fall’s enrollment is 1,387.

“The policy actually works to decrease the number of poor students attending college,” Carter said. “That is reprehensible, both for them and the nation at large.”

While the loan changes hurt all students, he and Watt said, they hurt historically black schools disproportionately because so many applicants are in need of financial aid.

At JCSU and other schools, that’s taken a toll.

Last week the school announced a series of financial cuts that includes laying off 21 administrative staffers. In addition, 30 open positions are frozen. Administrators are also looking at outsourcing services and giving unpaid furloughs in an effort to save $3 million. JCSU’s annual budget is about $37 million.

Watt blamed mid-level managers at the education department for the 2011 change and what he called its “unanticipated consequences.” The Congressional Black Caucus, which he used to head, has repeatedly lobbied the administration to reverse the changes and make loans more available.

In July the caucus met with Obama and raised the loan issue. Members urged him to do something. Two weeks later, according to a report from the United Negro College Fund, the caucus “lost patience with the administration’s lack of urgency” on the issue and wrote to Education Secretary Arne Duncan.

With no changes imminent, Watt said the caucus wrote “a letter of exasperation” last month.

He called the impasse frustrating.

“We remain hopeful that their policies will be changed,” he said of the administration. “There’s a level of cordiality here. We’re just not getting the result. ...

“It is frustrating, just like it’s frustrating to see the mistakes on the (health care) website.”

Watt declined to comment on his nomination to the Housing agency. Last week the Senate handed him a setback when it refused to cut off debate and allow a vote on his confirmation.



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September 2, 2014
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