HBCU Students Seek More Avenues for Funding

Audia Cook, a sophomore at Hampton University (No. 4 on the Black Enterprise Top 50 Colleges for African Americans list), passed up an opportunity to apply for an internship this summer as a pharmaceuticals sales representative with Blue Care Network of Michigan. She says waitressing will allow her a better chance to enroll next fall.

“Every year that I’ve attended Hampton, I’ve been late with my [tuition]. I’ve always had to register late. I’m going to be working this summer because I don’t want to go through what I had to go through with financial aid again,” says Cook, a pharmacy major from Detroit.

Despite working 36 hours a week at two jobs during the school year and borrowing money from friends and family, Cook still owed about $2,500 dollars at the beginning of her freshman and sophomore years. She says the stress of trying to stay in school caused her GPA to slip. Her plan is to save $1,000 dollars over the summer in case funds are still needed when her Pell Grant and loans aren’t enough.

According to a report, “Contemporary HBCUs: Considering Institutional Capacity and State Priorities,”  more than 70% of students who attend historically black colleges and universities (HBCUs) are classified as low income. Over the past couple of months, the economic climate has caused them additional strain. For example, 91% of Fisk University (No. 8 on the Top Colleges list) students receive some form of financial aid, and as a result of the country’s economic crisis, 11% of students at Fisk have withdrawn since August 2008.

“Seventy-five percent of those kids left because of funding issues,” says Hazel O’ Leary, president of Fisk and former U.S. Secretary of Energy.

Tuition, along with donations, make up the largest share of a school’s revenue base. Fisk, like many schools, has had to resort to budget cuts, but because HBCUs have fewer resources, the loss in scholarship money can be detrimental for students.

More help is coming from the federal government. President Barack Obama proposed a $2,500 American Opportunities Tax Credit, which allows students from low-income families who do not pay taxes to receive aid for college. Congress voted to increase Title III funding dedicated for public and private HBCUs by $85 million for the 2009 fiscal year. Obama wants to increase Pell grants

to $5,550 for fiscal year 2010, up $200 from fiscal year 2009, while ending subsidized loans. Pell Grants are the only source of federal money students do not have to pay back.

This spring, for the first time in a few years, enrollment at Alabama A&M University increased.  “We think that students who were not able to come back in the fall came back in the spring,” says Juarine Stewart, interim provost and vice president for academic affairs at the school. Stewart attributes the spring enrollment increase to an increase in Pell grant allotments.

But Hasan Jamil, assistant vice president of enrollment management at Texas Southern University, says that since Pell grants don’t cover 100% of tuition and fees, low-income students have to depend on loans. “People still have to rely on borrowing money whether it is from Uncle Sam or Bank of America,” he says.

Lakeisha Simpson, a business major from Raleigh, North Carolina, has accrued about $60,000 in loans during her two years at Clark Atlanta University (No. 13 on the Top Colleges list

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“I am stressed about how to attend Clark next year. [My aunt] said she cannot co-sign another loan for me,” says Simpson, who, with a 3.35 GPA, is the first person in her household to attend college. “I don’t understand why students with high GPAs like mine cannot get scholarships from the school. I’ve gone to the financial aid office numerous times and they always give me the same answer, ‘Well your family is making good income so we can’t give you a scholarship.’ Right now I am applying for scholarships and hoping for a miracle to occur.”

“Tuition at black colleges are 50% lower than at white institutions, however, the amount of institutional aid that they can contribute is also lower,” says Mary Beth Gasman, an expert in HBCU history and an associate professor of higher education at the University of Pennsylvania.

Governors will be receiving $8.8 billion in stimulus money to use in any way they see fit, and the U.S. secretary of education has $5 billion in discretionary funds. Michael Lomax, president of the United Negro College Fund, says it is important that schools and organizations petition to get this money invested in HBCUs. But while these funds could be available for any school, Lomax says that governors are predisposed to helping public institutions not private institutions.

Corporate donations are also a vital tuition resource, but they are dwindling because of the economy. ExxonMobil has agreed to immediately donate $500,000 to the UNCF’s Campaign for Emergency Student Aid, and committed to matching up to $500,000 of funds raised by the UNCF. Things are looking up at Fisk as well. The school entered into a partnership with Volkswagen that will result in $120,000 in scholarships each year for the next five years.

In addition to institutional and corporate grants, loans are a significant part of the financial aid package. Obama wants to transfer the management of student loans to the federal government, but some in the private sector disagree. In HBCU Part III, BlackEnterprise.com takes a look at the fall-out when the Federal Parent Plus Loan failed one low-income student and her family.

Previously in the series: HBCU Financial Forecast: Part I