Student-Loan Curbs Leave Black Schools in PerilBy DOUGLAS BELKIN and CAMERON MCWHIRTER
The President of Howard University, one of the nation's elite historically black schools, stepped down this week, highlighting the deep uncertainty black colleges are facing in the wake of new restrictions on loans on which many of their students depend.
Sidney A. Ribeau announced his retirement Monday following a sharp decline in Howard's enrollment last year, a subsequent downgrade in the Washington, D.C., school's bond rating and a steep drop in its ranking by U.S. News and World Report. The string of bad news comes as many of the nation's historically black colleges and universities confront increasing fiscal peril, said Johnny C. Taylor Jr., president and CEO of the Thurgood Marshall College Fund, which awards scholarships to students attending such schools.
"We're really at a tipping point," said Mr. Taylor. "There are so many teetering on the edge right now...without some kind of intervention, 20% to 30% [of the schools] cannot survive another decade."
The Washington Post/Getty Images Sidney A. Ribeau stepped down as president of Howard University after a sharp decline in enrollment.
Schools across the nation are hard-pressed to meet full enrollment because of a dip in graduating seniors and the recession's impact on the savings of many families. Historically black schools are particularly vulnerable because the recession hit African-American families harder than almost any other demographic, and the schools themselves generally have small endowments and are heavily reliant on tuition.
Only four of the 105 historically black colleges have had capital campaigns—fund-raising efforts that usually span several years—of $100 million or more, said John Silvanus Wilson Jr., president of Morehouse College and former executive director of the White House Initiative on Historically Black Colleges and Universities.
Adding to those headwinds is a decision in 2010 by the Department of Education to tighten eligibility requirements for Plus Loans, federal loans often taken by parents on behalf of their children and used disproportionately by low-income families. Freshmen entering college in 2012 were the first to feel the pinch, and enrollment at many black colleges took a hit.
At Howard University—founded in 1867 and considered one of the most prestigious black schools with famous alumni such as Nobel-prize winning writer Toni Morrison—enrollment declined by 6.3%, in part because of the new rules.
A Wall Street Journal analysis of 85 historically black four-year colleges found that between 2010 and 2012 nearly one third of them saw a decline in enrollment of 10% or more.
"If Howard is suffering, I can tell you there is a slew of smaller, less well-known schools under an amazing amount of stress," Mr. Taylor said.
The Department of Education has created an appeals process and relaxed some of the criteria for the Plus loans, but the amendments weren't enough to keep Moody's from downgrading Howard University's credit rating to Baa1 from A3 on Sept. 24. "The university will suffer from lower total enrollment for at least three more years," the agency wrote.
Exacerbating the problem is a wider trend away from historically black schools. More than 90% of all African Americans in higher education today are studying outside historically black colleges and universities, a reversal from previous decades, Mr. Wilson Jr. said.
Last spring, Howard Board of Trustees member Renee Higginbotham-Brooks wrote a letter to the board members saying the school "is in genuine trouble" and "will not be here in three years if we don't make some crucial decisions now." The letter was published on the Chronicle of Higher Education's website and prompted a sense on campus that Mr. Ribeau's five-year tenure as president wouldn't last much longer, said Glynn Hill, editor of "The Hilltop," the school's newspaper.
When news of Mr. Ribeau's retirement was announced, after what school officials said was an "intense three-day board meeting," there was a short-lived sense of relief, Mr. Hill said, adding that the mood on campus was uncertain and anxious.
Mr. Ribeau couldn't be reached for comment.
Anxiety has been widespread at historically black colleges as layoffs and resignations have become increasingly regular.
In Atlanta, where there is a cluster of schools on the city's west side, students worry about the future of their schools.
Last fall, Morehouse College in Atlanta announced unpaid furloughs for its faculty and staff after it missed that semester's enrollment target of about 700 students by 30%. This summer, it laid off 46 people.
"Our iceberg is melting," said Mr. Wilson. "If we don't move soon, we are going to perish."
Spelman College and Clark Atlanta University, both close to Morehouse in Atlanta, have each had layoffs in recent years.
Carlton E. Brown, president of Clark Atlanta, called the changes in student financial aid "pretty devastating" and said about 500 students had to leave the school last year as a result.
Jacobi McGee, a 21-year-old Clark Atlanta University senior from Norfolk, Va., said the financial health of his school is a daily anxiety.
"There is a lot of whispering going on, but no one is talking about it openly," said the political science major. "I don't want to end up with a degree that is worthless."