These Billionaires Are Stepping Up As Student Loan Cuts Squeeze HBCUs
Key Takeaways
- The One Big Beautiful Bill Act (OBBBA) is introducing new limits on Parent Plus and graduate student loans, directly affecting HBCU students who rely heavily on this aid.
- A student's mother had to borrow nearly $25,000 via the Parent Plus program to cover his senior year, highlighting the immediate financial gap created by existing and anticipated loan constraints.
- Philanthropist Arthur Blank's foundation committed $50 million over ten years to provide 'gap' scholarships for Atlanta HBCU students facing financial shortfalls.
- Other wealthy individuals, including Robert F. Smith and MacKenzie Scott, are expanding their support for HBCU students through low-cost loans and endowment building.
- HBCUs have a significantly higher rate of students and parents taking out federal loans compared to the national average for undergraduates.
HBCU students are on the frontlines of the new financial restrictions imposed by President Trumpâs One Big Beautiful Bill Act (OBBBA), which limits Parent Plus and graduate student loans starting next July. For students like Antonio Sweeney, whose mother resorted to a significant Parent Plus loan to cover his senior year, these cuts threaten the completion of their education at their chosen institutions. The reliance on federal loans is already high at HBCUs, with 65% of undergraduates taking federal loans compared to 36% nationally. Recognizing this critical need, major philanthropists are stepping up with significant donations; Arthur Blank's family foundation committed $50 million over ten years for gap scholarships at Atlanta HBCUs to prevent students from dropping out due to financial walls. Furthermore, Robert F. Smith is expanding his low-cost loan initiative to graduate students affected by the loan caps, and MacKenzie Scott recently donated $70 million to the UNCF to bolster endowments. These philanthropic efforts aim to bridge the financial gap exacerbated by the new federal loan restrictions, acknowledging that many talented students lack the necessary funds to stay enrolled.
