Tag Archives: college loans

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HBCUs: Still Struggling After All These Years

Five years ago, Reed Hastings, the co-founder and CEO of Netflix, and his wife, Patty Quillin, donated $120 million to two historically Black colleges, Spelman College and Morehouse College, and the United Negro College Fund. “HBCUs have a tremendous record,” Hastings and Quillin said in a news release announcing their gifts.

I wrote about the optimism at Historically Black Colleges and Universities (HBCU’s) at that time, when they seemed to be on a roll with large grants from philanthropists and a commitment to improvement.

Five years later, however, graduation rates remain dreadful, leaving many Black students, particularly Black men, with abandoned dreams, college debt and no degree. And without that degree, the default rate of borrowers is three times as high as it is among those who graduated.

There are 104 HBCUs in the United States, of which 78 are “ranked”, been placed on a specific list by a third-party organization, such as U.S. News & World Report. The average four-year graduation rate for first-time, first-year students at the ranked HBCUs in 2025 was an abysmal 23.2%. The average six-year graduation rate for students at ranked HBCUs in 2025, 32%, was better, but still dreadful.

In contrast, the average four-year graduation rate for US colleges in 2025 was 50.8% and the average six-year rate was 60.1%, almost double the rate at ranked HBCUs.  

It should be noted, however, the graduation rate at HBCUs varies widely. According to U.S. News & World Report, the top five HBCUs for graduation rates, based on 2025 data, were:

RankInstitution NameStateFour-Year Graduation Rate
1Spelman CollegeGA68%
2Howard UniversityDC60%
3Xavier University of LouisianaLA48%
4Fort Valley State UniversityGA44%
5Virginia Union UniversityVA41%

In contrast, the 4-year graduation rate at LeMoyne-Owen College, a private, historically black Christian college in Memphis, Tennessee is 7% and the 6-year graduation rate is 18%, while the 4-year graduation rate at Alabama State University in Montgomery, Alabama is 14% and the 6-year rate is 28%. Additionally, the retention rate stands at 60%, which is also below average, ranking in the bottom 15%.

That raises questions about why philanthropist MacKenzie Scott recently pledged $38 million to Alabama State and made pledges to some other HBCUs with abysmal graduation rates, such as the University of Maryland Eastern Shore (4-year graduation rate – 19%; 6-year rate – 37%) and Morgan State University ( 4-year graduation rate – 13%; 6-year rate – 37%).

A  report from the Center for Minority Serving Institutions at Rutgers University included the observation that “philanthropists should consult data to make better informed decisions around giving, considering the donations to both high performing institutions to reward growth and lower performing institutions to stimulate growth.” The problem with that approach, however, is it can endorse propping up failing institutions that are failing their students.

They are not doing their students any favors if they end up leaving so many with debt and no degree.

One issue for Black HBCU’s is that some have an almost blanket acceptance rate. That leads to unready students, which inevitably leads to the low graduation rates. For example, LeMoyne-Owen College has a 97% acceptance rate and Alabama State University has a 98% acceptance rate. 

Too often, high acceptance rates are accompanied by low scores in college readiness tests. 

A key standardized college admissions test that assesses high school students’ academic readiness for college is the ACT test. A student’s Composite score, ranging from 1-36, is the average of a student’s English, math, and reading test scores. 

Some American universities look for students with scores in the 30s, others may consider scores in the mid-20s as competitive. According to ACT, the average score is 34 for admitted students at Harvard University and 23 for admitted students at University of Massachusetts Boston. 

The average ACT composite score of students admitted to Spelman College is 26; for Howard University, 24. In contrast, the average ACT composite score of students admitted to LeMoyne-Owen College is 16, to Alabama State University, 18. The ACT college readiness benchmarks range from 18 for English to 23 for Science.

Johnny C. Taylor Jr., former president and CEO of the Thurgood Marshall College Fund, a Washington D.C.-based, nonprofit organization that represents 47 public HBCUs, has attributed much of the high non-completion rate to the HBCUs accepting a lot of students with low standardized test scores and GPAs, students encountering time-management and behavioral issues, and a lack of financial literacy.

Many Black HBCU students also have to deal with being first generation college attendees, who tend to graduate at much lower rates across the board than continuing-generation students.  

The United Negro College Fund (UNCF) has also found that students at HBCUs borrow more than students from non-HBCUs because African American families generally have lower assets and incomes that limit their ability to contribute toward college expenses. 

According to the U.S. Census Bureau, the median income of Black households in the United States in 2024 was $56,020, significantly lower than the $92,530 median income figure for non-Hispanic White households. ”With only minor fluctuations, the racial gap in median income has remained virtually unchanged for more than a half-century,” the Bureau noted. 

High HBCU drop-out rates compound the problem of paying off college debt as drop-outs earn less. 

Too many Black students at HBCUs also come from failing high schools with a below-average teaching environment involving inexperienced and less qualified educators and benefit from easy college admission standards at some of the less-competitive HBCUs. 

A recent UNCF report pointed out that poor high school preparation often means Black students  are more likely to need remedial college courses than other student groups, and the lack of preparedness  hampers their success. “Increasing the number of African Americans receiving college degrees depends in large measure on whether students receive a quality K-12 education that prepares them for college coursework and college success,” the report said.

In the midst of all this, there are some hopeful positives. Some HBCUs have been seeing record enrollment growth and overall HBCU enrollment for the 2024-2025 school year rose by 5.9% compared to Fall 2023, the third year of increases. It’s worth noting, however, that enrollment growth at some HBCUs is occurring as the Associated Press has just reported that new enrollment figures from 20 selective colleges provide mounting evidence of a backslide in Black enrollment. On almost all of the campuses, Black students account for a smaller share of new students this fall than in 2023. At Princeton and some others, the number of new Black students has fallen by nearly half in that span.

In the fall of 2025, North Carolina A&T State University held down the #1 spot as the largest HBCU for the twelfth straight year with 15,275 students, up 6.7% from the previous school year. In the same vein, Spelman College increased its 2024 enrollment by 24% in 2025, Winston-Salem State University had a 4.7% enrollment increase and Shaw University in  Raleigh, North Carolina, founded in 1865, saw a 45% increase in new students in the fall of 2025,

The Chronicle of Higher Education reports, however, that HBCU enrollment growth is not shared equally across all the nation’s HBCUs. For example, enrollment fell at eight of the 10 HBCUs in North Carolina over the last decade, according to the National Center for Education Statistics, and overall enrollment at HBCUs has yet to rebound to its 2010 peak of 327,000. In addition, enrollment growth will need to be accompanied by increases in graduation rates in some cases. For example, the 4-year graduation rate at Shaw University is only 9% and the 6-year graduation rate is just 16%.

As was the case five years ago, if philanthropists and HBCUs really want to help Black college students, they will put money and effort into ensuring they get a K-12 education that prepares them for college and that HBCU students graduate with a good education. HBCUs that fail this test are still doing their students no favors, undercutting the very people they claim to champion.

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Cancelling student debt: Another bad idea from the “free stuff” crowd

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness,” Charles Dickens wrote in A Tale of Two Cities. Thousands of Oregon college graduates in the class of 2019 probably felt the same way.

After years of hard work, they had finally earned their degrees. But 54% graduated with student loan debt. The average debt – $27,542. If it was any consolation, they were not alone. About 45 million Americans (13.7% of the U.S. population) are dealing with federal and/or student loan debt that totals about $1.7 billion.

But fear not, debtors, liberal politicians have been falling all over themselves with plans to help bail you out.

In May 2020, Reps. Peter DeFazio (D-OR) and Earl Blumenauer (D-OR) called upon House Speaker Pelosi and Minority Leader Kevin McCarthy to prioritize long- term relief in any future COVID-19 response in the form of at least $30,000 in one-time student loan debt cancellation for all federal student loan borrowers 

In September 2020, U.S. Senators Ron Wyden (D-OR) and Jeff Merkley (D-OR) introduced a resolution  outlining a plan for the next president to use existing authority under the Higher Education Act to cancel up to $50,000 in individual federal student loan debt for Federal student loan borrowers.

Before the Nov. 3, 2020 election, Joe Biden and Kamala Harris called for student loan forgiveness of up to $10,000, and if a student found a job that paid less than $125,000 after graduation, all their student loan debt would be forgiven.

And then there are all the progressive think tanks, unions and special interest groups lined up behind the debt cancellation idea.

In November, a coalition of 236 mostly progressive groups, including the American Federation of Teachers and the National Education Association, sent a letter to President-elect Biden calling on him to cancel student debt using his executive powers on the first day he takes office. Casting their lobbying as a racial justice issue, the letter said, “The ​disproportionate impact​ of student debt on borrowers of color exacerbates existing systemic inequities and widens the racial wealth gap.” 

The progressive Roosevelt Institute, adopting the “No crisis should go to waste” philosophy,  is calling for the cancellation of student, housing, and medical debt as part of a massive covid-recovery plan. Framing student debt as “a product of and a contributor to our country’s shameful racial wealth gap,” the Institute wants student loan forgiveness to go hand in hand with a commitment to funding tuition-free public colleges and universities.

That’s what the most ardent advocates of student loan cancellation are really pushing for – free college, with somebody else, usually simply called “rich people,” covering the cost.

Sen. Elizabeth Warren (D-MA) argued on Nov. 17, 2020 that forgiving student loans would be the “single biggest stimulus we could add to the economy” in these difficult times. And the New York Times said, “Both sides of the debate acknowledge that tackling the $1.7 trillion in student debt nationwide, which is spread among more than 43 million borrowers, would go far toward jump-starting the economy.” But a lot of economists don’t agree. 

The Committee for a Responsible Federal Budget says the stimulus benefits would be minimal and aimed at those who least need the help. Total student loan debt may be atrociously high, but borrowers often pay back their loans over 10, 15, or even 30 years, so debt cancellation would increase their available cash for injection back into the economy by only a fraction of the total loan forgiveness. “Stimulus dollars that are spent rather than saved provide a stronger boost to near-term economic output,” the Committee has said. 

Continuing current student debt relief policies, including deferring payments and interest, are preferable, as well as income-driven repayment programs under which monthly payments are determined based on a borrower’s income, not the amount of debt. After 20 to 25 years, the remaining debt is forgiven.  

Recently released data from the U.S. Department of Education shows that the national default rate (A federal student loan is considered to be in default if payment is late by 270 days) for FY2017 was 9.70%.  Massachusetts had the lowest loan default rate – 5.83%; Mississippi had the highest –  15.19%.

Oregon had 6,477 borrowers, 10.71% of the total, in default. The Oregon schools with the highest default rate, 7.80%, were Eastern Oregon University and the Pacific Northwest College of Art. The Brookings Institute is predicting a “looming student loan default crisis” that could see 40% of student loan borrowers nationally in default by 2023.

Yes, some of this debt has accrued because of lax government lending standards. As the Wall Street Journal reported on Nov. 23, 2020. “The government lends more than $100 billion each year to students to cover tuition at more than 6,000 colleges and universities. It ignores factors such as credit scores and field of study, and it doesn’t analyze whether students will earn enough after graduating to cover their debt.”

But subsidizing people who run up large college loan debts penalizes those who took their responsibility seriously and acted responsibly, James B. Meigs wrote in City Journal, a publication of the Manhattan Institute for Policy Research, a free-market think tank. That leaves a lot of people feeling like chumps, he says. “…the chumps of modern America feel that the life choices they’re most proud of—working hard, taking care of their families, being good citizens—aren’t just undervalued, but scorned,” Meigs wrote. As Jeff Jacoby, a Boston Globe columnist put it, “…a massive bailout of borrowers would be unfair to countless families that saved and worked to pay for college, to say nothing of those who responsibly repaid their loans.”

Then there’s the “moral hazard” of cancelling student debt. It might encourage students to continue running up risky big loan balances on the assumption that their debts will be forgiven at some point. That would cause a distortion of borrowing decisions, making them insensitive to the ability to repay. 

Of course, what if higher education institutions see that it makes sense to continually raise prices because the government will absorb any losses down the road. But that’s another problem.

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The Democratic debate: Soak the rich. Yeah! that’s the ticket!

Remember how Jon Lovitz, as Tommy Flanagan, the pathological liar on Saturday Night Live, would build a narrative that was a series of lies and say, “Yeah! That’s the ticket!”?

The Democratic debate was like that.

Want something for nothing? When I’m president, you’ll get it: Tuition-free public colleges and universities; free mandatory parental leave, without burdening small businesses; $15 minimum wage with no increase in productivity; enhanced Social Security benefits; Tax cuts for middle-class families; Refinancing of federal college debt at a low interest rate; Government subsidies of Obamacare for people in the United States illegally; move America to 100% renewable energy with federal subsidies.

The Democrats offered up a grab bag of free stuff. How would they pay for it all? Hillary summed up the Democratic Party’s answer. “ I know we can afford it, because we’re going to make the wealthy pay for it,” she proclaimed.

JonLovitzSNL

Yeah! That’s the ticket!

Reminds me of Margaret Thatcher’s observation, “The problem with socialism is that you eventually run out of other people’s money.”

The national debt stands at $18.2 trillion, up from $10.6 trillion when President Obama took office, and it is continuing to increase an average of
 $1.88 billion a day. The debt goes up when the government doesn’t get enough revenue in a given fiscal year to pay its bills. Annual federal deficits have been shrinking lately, but that pattern isn’t expected to last as the budget takes hits in the coming years.

And then, of course, the country already faces problems with covering the huge costs of entitlements such as Social Security and Medicare.

Unless we want to embrace ever-higher deficits, money would need to be found to pay for the cornucopia of benefits the Democrats promise.

Hillary Clinton said not to worry, we’ll get it from higher taxes on the wealthy. “Right now, the wealthy pay too little and the middle class pays too much,” she said in the debate.

Echoing Clinton, Lincoln Chafee chimed in that the rich are doing fine, “so there’s still a lot more money to be had from this top echelon.”

The problem is that the top-earning 1 percent of Americans (earning about $400,000 +), a pretty fluid club of individuals on a year-to-year basis, already pay almost 50 percent of federal income taxes and the top 25 percent pay about 87 percent, making the United States extraordinarily dependent on small slices of the population.

The Congressional Budget Office has calculated that high-income earners receive only pennies in federal benefits for every dollar they pay in federal taxes. In contrast, those in the middle 20 percent of earners received $2.23 in benefits for each dollar they paid and the lowest 20 percent receive close to $20 in federal benefits for every dollar they pay in federal taxes. In other words, the high-income earners are already subsidizing middle-income and low-income Americans.

“Despite the data, accusations that the rich are not paying their fair share continue,” The Manhattan Institute has reported. “This rhetoric is based more on perception than reality, or on a mistaken belief that the government needs more funds to become further entrenched in Americans’ lives. While this rhetoric may work as a populist rallying cry, the data show that a central tenet of the political left’s platform is simply incorrect.”