This systemic racism in the credit and wealth-building systems compound the problem, said Ashley Harrington, the federal policy director at the Center for Responsible Lending. For example, in 2012 the Obama administration tightened credit standards for parents to access the PLUS loans, a federal loan program parents can use to pay for their kids’ college.
That change meant the government would look at a parent’s credit history in the five years leading up to when they planned to borrow for certain adverse events. Those five years overlapped with the subprime mortgage crisis, which disproportionately impacted black families. Tens of thousands of families whose children attended HBCUs were denied loans as a result of the change, putting those students at risk of not being able to attend college.
