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November 24, 2009 5:47 PM HBCUs Prepared for Direct Lending

By Daniel Luzer

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As Jesse Singal explained last week the U.S. Education Department is planning to stop the Federal Family Education Loan (FFEL) program and convert all higher education lending to the Direct Loan plan. But many schools are not making internal efforts to support the change.

This issue has lately become a matter of some concern for followers of higher education. The U.S. Department of Education issues new rules for lending, most schools ignore these new rules, finding them cumbersome and hoping, moreover, that lobbying will make sure the rules never get instituted anyway. While arguably this policy makes sense from an institutional standpoint, it doesn’t help students much. The move to direct lending is supposed to cut costs and provide billions for higher education.

But apparently America’s Historically Black Colleges and Universities (HBCUs) are prepared to make the adjustment. From Diverse Issues in Higher Education comes news that they’re ready:

Among the 105 HBCUs, a few dozen of which are private colleges and small public universities, HBCU association and individual school officials report that the majority of their institutions are supportive of the administration’s proposal on direct lending.
Lezli Baskerville, president and CEO of the National Association for Equal Opportunity in Higher Education (NAFEO), says Education Department officials have worked diligently since the spring to assure HBCU presidents and financial aid officials that shifting to a 100-percent direct lending system will not pose onerous and expensive administrative burdens on their schools. NAFEO is a Washington-based advocacy organization that represents the interests of HBCUs and predominantly Black institutions.

While the move to all-direct lending may not come in this legislative cycle, there’s a tacit acknowledgment at many schools that the change will come eventually. The result of this latest student loan fight is unclear but students at HBCUs appear to be safe.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer