Historic Black Colleges On The Verge Of Bankruptcy

New rules offered by president Obama are not as helpful as they seem.

New college repayment rules proposed by the Department of Education in June are supposed to simplify the procedure of seeking loan forgiveness for current and former students, but several historically black colleges are afraid that Obama administration’s idea may cause their shutdown.

At the moment to discharge a loan, it is required to prove that an educational institution committed “fraud”, but the new rules use the term “misinterpretation”.

“Should a disgruntled former or current student at an HBCU feel ‘misrepresented’ by their institution by any means, the broad language outlined in the proposed ED rule could open the floodgates for frivolous lawsuits that will only adversely affect the greater HBCU student body,” the initiative group representing Bennett College for Women, Clark Atlanta University, Wiley College, Rust College, and the University of Memphis wrote in a letter sent to the Obama administration.

They hope to arrange public resistance to the new rules and asked for a 30-day extension of the comment period, which is scheduled to end on August 1.

The representatives of the colleges reasonably think that the proposed program will “open the floodgates” for the individuals trying to escape paying back their debts. That will put HBCU in the whirlpool of long and costly court battles, which may lead to complete bankruptcy.

The problem of student loans in the USA is urgent but the financial state of many HBCU is also far from perfection. No one will benefit from closing Black institutions, providing students of color with a rare possibility of getting the worthy education and good career opportunities.

Such measure from the side of the government is more an attempt to continue ruining educational system than helping to reform it.

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