Colleges still struggle with questions of relevance

Howard University, one of the nation’s most prestigious African-American colleges, is battling financial trouble and “flagging morale,” according to an NPR report earlier this week. Not only did school President Sidney A. Ribeau resign last month, but the school’s faculty Senate approved a unanimous vote of “no confidence” in the school’s board.

The school has since hired cancer surgeon Wayne Frederick as interim president. He’s tasked with managing the internal friction, navigating the threat of decreased federal funding, and restoring the school’s credibility amidst a sinking credit rating from Moody’s Investor Service.

Howard’s financial challenges are not an individual case. Historically black colleges and universities (HBCUs) nationwide are facing a decrease in enrollment and struggling to make ends meet. And while many blame new federal loan requirements for the financial trouble, some critics say the decreasing numbers are reflective of decreasing relevance, a question afflicting all colleges as tuition continues to rise.

The trouble started in 2011 when the Department of Education (DOE) tightened requirements for parents seeking federal PLUS loans to send their children to school. Before, explained Inside Higher Ed, borrowers who didn’t have any foreclosures, bankruptcies, tax liens, wage garnishments, defaults within the past five years, or accounts more than 90 days delinquent could qualify. But in 2011, the DOE tightened those requirements to reject applicants who had unpaid accounts in collections or unpaid credit balances from the past five years.

Under the new rules, 400,000 parents were rejected for PLUS loans. Only 28,000 of them were prospective students at black colleges, but leaders at those schools became the regulation’s most outspoken critics, claiming it disproportionately affected minority students, many of whom come from low-income households.

“If you make it harder to get a student loan, if you have families that are less able to pay for a college education, less able to survive what you’re doing is cutting off the future and you’re also putting a particular burden on historically black colleges and universities,” lamented Mary Frances Berry, a professor at the University of Pennsylvania.

“This is having a devastating impact on enrollment at our institutions,” a coalition of administrative leaders wrote in a letter to Secretary of Education Arne Duncan, who apologized and promised his department would revise its creditworthiness rules.

In the meantime, the nation’s 105 HBCUs continue to face decreased enrollment. But critics like Jason L. Riley at The Wall Street Journal suspects that has more to do with the schools’ overall competitiveness and their perceived relevance.

“These days the better black schools—Howard, Spelman, Morehouse—are rated ‘selective’ in the U.S. News rankings,” he wrote in 2010. “But their average SAT scores still lag behind those at decent state schools like the University of Texas at Austin, never mind a Stanford or Yale.”

Riley pointed out that, not only do HBCUs have lower six-year graduation rates, but according to two economists at MIT, lower wage-returns: “Overall, there is a 20 percent decline in the relative wages of HBCU graduates in just two decades.” The economists went on to conclude that, “by some measures, HBCU attendance appears to retard black progress.”

Meanwhile, mainstream colleges are facing a 2.9 percent tuition increase and attempts by state governments to cap how much they can raise prices.

Considering the in-state increases for the previous two years were 4.5 percent and 8.5 percent respectively, this year’s smaller increase may seem like good news. But expert economist Sandy Baum, a researcher who authored this year’s “Trends in Higher Education” report for The College Board, said the minor increase doesn’t mean the upward trend of college costs is moderating, or that college is suddenly more affordable.

But another study from The College Board reveals that a college degree still holds marketplace value, according to the Detroit Free Press. Median earnings for high school graduates were $21,000 while median earnings for those with bachelor’s degrees almost tripled, to $56,000 in 2011. The study found that college graduates also enjoy a better unemployment rate, 7.1 points below that for high school graduates.

Still, higher education has vocal critics. During an interview with Glenn Beck last month, Mike Rowe, host of the television series Dirty Jobs and director of a new foundation that equips high school students with skills for available jobs, condemned a system he says does nothing but trap students in debt.

“We’re lending money we don’t have, to kids who will never be able to pay it back, for jobs that no longer exist,” he said. “That’s crazy, right? That’s what we’ve been doing for the last 40 years.”