The Real Story of Obama's White House Initiative on HBCUs – Part I

On February 28, President Trump issued a new Executive Order, extending the life of the White House Initiative on Historically Black Colleges and Universities (the WHI). This president became the seventh president to sign such an Order. The White House Initiative was first established by an Executive Order signed by President Jimmy Carter in 1979. At its inception, while the WHI staff was housed in the new Department of Education, the Executive Director reported directly to an Assistant to the President. It has several important functions in support of the 100 HBCUs that make up less than three percent of America’s colleges and universities but which make an outsized contribution to the professional, educational, artistic and scientific leadership of the nation.
The most recent Executive Order returned the supervision of the WHI to the White House, moving it from supervision in the Department of Education.
A robust debate has arisen since the meeting in Washington D.C. The debate is over the level of support received during the Obama administration and whether the level of support rose or declined. Fortunately, there are several reliable sources of financial data that resolve the matter. Those sources of information are the National Center for Education Statistics (NCES), the National Center for Science and Engineering Statistics (NCSES) and the annual reports published by the WHI.
An analysis of those sources should provide an answer to the question, “Did federal support to HBCUs increase or decline under the Obama administration?”

How Federal Support to HBCUs is Measured

For the purpose of this analysis, we adopt the traditional method of computing department and agency support. That level is established by adding the total of contracts and grants from a department or agency to the institutions. This analysis does not adopt the “innovation” adopted by the recent leadership of the WHI. That “innovation” consists of including loans to students and their parents in reports on federal support as though they constitute direct support to the institutions.
There are three reasons why federal student and parent loans are not included in this examination of federal support levels. The first, the practice of including those totals is unorthodox and not recognized anywhere else as standard practice. It is an “innovation” adopted uniquely by the recent leadership of the WHI.
Second, loans and grants do not translate to dollar for dollar transfers to institutions as do contracts and grants. Grantees and borrowers are not required to use all of their funds for direct transfers to institutions. In many cases, the funds are used for transportation, book and equipment purchases or housing. Those purchases may not be directly related to the institution. And loans are by their nature amounts that must be paid back to the lenders. Therefore, loans should not be counted as commitments by the lender.

Examination of these sources leads to several conclusions. The first is that there was a slight bump up in support to HBCUs in 2009 and 2010. The slight rise in support to HBCUs in 2009 and 2010 was not due to an effort focused on HBCUs. It is explained by the government-wide increase in contracts and grants prompted by the adoption of the American Reinvestment and Recovery Act (the ARRA) in 2009. The adoption of the ARRA led to increases in programmatic commitments throughout the federal government as part of a national stimulus program.
The slight bump up in support to HBCUs disappeared with the end of the federal stimulus program.
The federal government is the largest source of revenue for HBCUs and has been the largest source for some time. The federal government provides more programmatic support to HBCUs than state governments and more than the revenues received through student tuition and fees. The NCES reports that the federal government provided $340 million more than state governments in 2013 and $133 million more than state governments in 2014.
Conversations about increased support to HBCUs or support at levels near or at $5 billion are untethered from facts and reality. The NCES reported that in the year 2014, the federal government provided $2.0 billion in revenue to HBCUs, $155 million less than reported in 2013. The Integrated Postsecondary Education Data System (IPEDS) reports that the highpoint of federal financial support to HBCUs was $2.438 billion in 2010.
Federal agencies disbursed between $1.2 billion and $2.5 billion to HBCUs annually for the duration of the Obama administration. The relationship between the Obama administration and the HBCU community did not begin well. In its first budget, the administration left out a Bush Administration $85 million dollar increase to Title III of the Higher Education Act. Title III is the largest and most important federal source of support to HBCUs. After loud protests from the HBCU community, this oversight was corrected when the increase was reinstated as part of the Student Aid and Fiscal Responsibility Act of 2010 (SAFRA).
As part of SAFRA, the administration raised the maximum amount available under the Pell Grant Program from $5,350 to $5,500. The grant was projected to grow to an estimated $6,900 by 2019. This development could not benefit HBCUs in a tangential way since, on average, 70% or more of the students who attend HBCUs do so with assistance from Pell grants. This development benefited HBCUs, Tribal Colleges, urban community colleges and other institutions with high concentrations of low-income students in a tangential way. The administration announced that the reason for the increase was a response to the rise in the cost of tuition and other college costs on a national basis.

HBCU Funding Sources – Fact From Fiction

The Department of Education is by far the largest source of financial support to HBCUs. Of the roughly $800 million dollars from that department, about $650 million is from funds legislatively restricted to HBCUs. The funds consist of about $400 million directed to HBCUs under Part B of Title III of the Higher Education Act. Title III directs funds to institutions that serve large percentages of low-income students at minority serving institutions.
The Department of Education manages the HBCU Capital Financing Loans. This program is essential, especially to the private HBCUs. Again, because this is a loan that requires repayment of the principle, therefore this program should not be counted as an annual contract or grant.
The Department also manages a special legislative allocation of approximately $230 million to Howard University. While the department manages billions of dollars in contracts and grants, HBCUs do not participate to any significant degree in any of the many other programs operated by the Department with the one exception of the TRIO programs.
By 2011, based upon department and agency reports submitted to the WHI, it was clear that programmatic funding levels were falling precipitously. In addition, without notice to the WHI or to the President’s Board of Advisors on Historically Black Colleges and Universities, the Department of Education changed the definition of “adverse credit history” in the Parents PLUS Loan program. The change had an immediate and negative financial impact at HBCUs, precipitating a significant drop in student enrollment at HBCUs. The Association of Public and Land Grant Universities (APLU) estimated that the HBCUs lost an estimated $168 million in revenue as a result of that policy change.
The second largest source of programmatic funds to HBCUs is the Department of Health and Human Services. Those funds go almost exclusively to the three medical schools classified as HBCUs. A national study of HHS programmatic expenditures found a pattern of bias against African American applicants at both HBCUs and other institutions. The results of the study were widely publicized. In response, the department developed a programmatic response that has drawn a few HBCUs into a programmatic effort to increase the nation’s number of minority bioscience researchers.
The next largest departmental funding source for HBCUs is the Department of Agriculture. The 1890s Land Grant program is an important source for the development and support of a science and research infrastructure at HBCUs. Until recently, the 1890s-program included 19 institutions. Central State University was added to the Land Grant program two years ago so that now 20 HBCUs participate in the program. The level of 1890s funding for HBCUs is legislatively established. USDA operates largely as a pass through and monitoring agency.
The HBCUs rarely participate in the many other agriculture, research and international programs operated by the department.