Sept. 27, 2022
Rachel Fishman was quoted in an article by The Chronicle of Higher Education regarding federal government programs, such as Parent PLUS, that perpetuate racial inequity.
Parent PLUS — a federal program that helps parents borrow money for their children’s college education — has recently come under scrutiny. The loans have higher interest rates and origination fees than do other federal student loans for undergraduates, fewer options to reduce payments or seek loan forgiveness, and almost no safeguards to ensure that borrowers can repay their loans. But for some low-income families seeking to help their children through college, there are few alternatives.
Rachel Fishman, acting director of research for higher education at New America, a research organization, said the federal government is effectively acting as an exploitative subprime lender by failing to determine whether families have the ability to repay loans, even when its student-aid forms show that their income and assets are so low that they should not have to pay anything toward college.
Yet when the federal government tightened up lending standards for Parent PLUS in 2011, Black students and HBCUs were left scrambling, with students struggling to pay their bills and colleges finding themselves short of tuition. Under pressure from political leaders and Black colleges, the Education Department relaxed its standards.
Fishman said that until the underlying issue of college affordability is addressed, loans are “going to continue to harm our most marginalized and vulnerable students [and] chip away at any achievement being made at the racial wealth gap.”
“It’s an unfair burden,” Fishman said, “to ask of these families.”
Read the full article here