Fact Checking President Obama on HBCUs

President Barack Obama held an hour-long town hall meeting at North Carolina A&T State University last night, a stop that many people regard as his farewell legacy tour with less than a month before the presidential election.
Produced in partnership with ESPN’s digital imprint ‘The Undefeated,’ the conversation covered elements of Obama’s personal inspiration, definition of tenacity, and advice for young people on the notions of activism and community engagement.
But one question from the crowd stood out among others.

Diving into the details on Obama’s response shows partial truths in a couple of areas.

$4 Billion to HBCUs

Obama was telling the truth when he said that the federal government has given more than $4 billion to HBCUs since taking office. But what he didn’t say is that the term “given” is used in a very loose, almost-bordering-manipulative way.
According to the most recent report produced by the White House Initiative on Historically Black Colleges, the federal government has “given” an average of $4.6 billion to HBCUs in the form of research grants and contracts, and federal student aid awarded to individuals who attend HBCUs. This accounts for about three percent of the total amount of federal funds given to all colleges and universities eligible to receive federal funding.

But what the president declined to say is that federal funds given to schools aren’t always just that. Loans that students are required to pay back to the federal government, with interest, aren’t direct support to institutions; they are funds paid to schools on behalf of students. When students transfer, those loans go with them to the next institution. Much in the same way a bank doesn’t “give” a residential home or small business loan and call it support for a real estate developer or a corporate franchising arm, the federal government is technically giving schools money, but not to expand them — it is lending towards the purchase of a college education.
The feds played loose with words like these for years. But recent coverage of black colleges has helped to reform a more accurate depiction of federal support to HBCUs, as the same report shows how much money really goes to institutions minus student loan dollars.

See how magically, and dramatically, the numbers change? And when you break down further how federal money actually supports HBCUs:

Note the key areas which actually help to develop campuses: Research and Development, Direct Institutional Subsidies, Facilities and Equipment, Economic Development. That total? $415,138,543.
About 10 percent of federal money not going directly to students to pay for college, helped to increase HBCU capacity.

Parent PLUS Loan

Obama told the audience that the Parent PLUS loan was revised in order to protect families from taking out loans that, without students graduating, left them with crushing debt and higher instances of loan default. That is true.
But what was left out was the notion that the Department changed the program without adequately alerting institutions or families, which resulted in dramatic consequences for families around the country. From US News and World Report:

In a report released Wednesday by the New America Foundation, policy analyst Rachel Fishman breaks down the effect the October 2011 change had on different Parent PLUS loan recipients, as well as on colleges and universities. Overall, Fishman found the department approved more than 200,000 fewer recipients in 2013 than it did in 2011.

The change came when the department tightened its requirement for credit check criteria. Before 2011, parents typically were approved if they didn’t have an adverse credit history — meaning no delinquencies of more than 90 days and no foreclosures, bankruptcies or defaults. But the department expanded its definition of what was more than 90 days delinquent to include debts that had been charged off or sent to collections.

The report continues:

“Morehouse (College), for example, was suddenly thrown into a financial crisis in 2012 after the PLUS credit changes,” the report says. “Many freshmen who had paid their deposits suddenly could not afford Morehouse.”

And because students suddenly couldn’t afford those colleges, many schools saw drastic enrollment declines. Between 2011 and 2013, there were 54 percent fewer PLUS loan recipients at for-profit colleges and 45 percent fewer at HBCUs.

In 2013, former Secretary of Education Arne Duncan appeared at the annual HBCU Week conference sponsored by the White House Initiative on HBCUs, and apologized for policy change that forced an average of 97 students per HBCU to temporarily or permanently withdraw from school, and cost black colleges more than $150 million in tuition revenue. From the Washington Post:

“Our department is required to carry out the law as it was designed to protect parents and taxpayers against unaffordable loans,” Duncan said in a speech Thursday in Washington to a gathering of leaders of historically black colleges and universities, known as HBCUs. “But we could have and should have handled the process better. Communications internally and externally was poor, and I apologize for that and for the real impact it has had.”

Duncan added: “I have talked with many of the people here in this room about the PLUS loan challenge. It has been hard, it has been frustrating, and I know some of you are angry.”

Those are things President Obama left out of the remarks yesterday. He made great comments about the divestment of states from higher education, and specifically HBCUs. North Carolina and Louisiana are among the nation’s worst offenders.
He didn’t lie, but in his final months as the nation’s first black president, he’s still very comfortable with playing the 50 on HBCUs.