U.S. Secretary of Education Betsy DeVos announced full forgiveness of the $322 million in hurricane relief loans given 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,” said DeVos. “This relief provides one more step toward full recovery.”
In the aftermath of the storms, Dillard University, Southern University of New Orleans, Tougaloo College and Xavier University of Louisiana borrowed over $360 million through the HBCU Capital Financing Program in 2007. The money was used to renovate, refinance existing debt and build new facilities. The colleges struggled to repay the debt due to decreased enrollment.
The Bipartisan Budget Act of 2018 made funds available to fully forgive the loans.
The HBCU Capital Financing Program was established in 1992 and provides low-cost capital to help historically black institutions upgrade campuses and refinance debt. To date, the Department of Education has approved more than $2 billion in loans to 45 historically black colleges.
“This Administration’s support of the Congressional action to eliminate over $300 million in Hurricane Katrina loans taken out by four HBCUs was the right thing to do and was a big deal,” said Johnny C. Taylor Jr., Chairman of the President’s Board of Advisors on Historically Black Colleges and Universities.
Dillard University President Walter M. Kimbrough expressed gratitude and discussed the damages the school faced from the hurricanes.
“The Dillard University community is grateful that the President, the Administration, and the Congress provided total loan forgiveness to the HBCUs decimated by Hurricane Katrina,” he said. “Dillard had six feet of standing water inside of its buildings, and was the most physically devastated institution of higher education.”
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