The U.S. Education Department is granting full forgiveness of $322 million in loans made to four historically black colleges and universities that suffered damage after Hurricanes Katrina and Rita struck the Gulf Coast in 2005.
“This additional disaster relief will lift a huge burden and enable the four HBCUs to continue their focus on serving their students and communities,” Education Secretary Betsy DeVos said in a statement. “This relief provides one more step toward full recovery.”
In the aftermath of the storms, Dillard University, Southern University at New Orleans, Tougaloo College and Xavier University of Louisiana collectively borrowed more than $360 million through the HBCU Capital Financing Program in 2007. The money was used to renovate, refinance existing debt and build new facilities. The schools struggled to repay the debt amid depressed enrollment, and in 2013 received a five-year reprieveon payments that was set to expire this spring.
A provision in the two-year budget deal signed into law this year gave DeVos leeway to forgive the outstanding balance owed by the four schools.
“We are deeply grateful for the bipartisan legislative efforts and to the Trump administration for relief of the Katrina loans to Xavier University of Louisiana,” said C. Reynold Verret, president of Xavier of Louisiana. “Forgiveness of the loans removes a great impediment to innovation and the delivery of superlative education to talented women and men who build and sustain our communities, cities and nations.”
At Dillard, President Walter M. Kimbrough expressed his gratitude and talked about the level of devastation the university faced after the storms. “Dillard had six feet of standing water inside of its buildings, and was the most physically devastated institution of higher education,” he said.
Established in 1992, the HBCU Capital Financing Program provides low-cost capital to help historically black institutions upgrade their campuses and refinance debt. The program is meant to provide a lifeline to schools, many with small endowments, that face challenges in accessing traditional financing at reasonable rates.
