Education Department Awards Low-Interest Loans to Four Historically Black Colleges and Universities in New Orleans
The U.S. Department of Education today announced recent loans totaling nearly $400 million to four historically black colleges and universities (HBCUs) affected by Hurricane Katrina--Dillard University, Xavier University, Southern University at New Orleans (SUNO) and Tougaloo College.
At a ceremony today in New Orleans, James Manning, acting assistant secretary for postsecondary education, presented loan checks on behalf of Education Secretary Margaret Spellings to Norman Francis, president of Xavier University; Victor Ukpolo, chancellor of SUNO; Beverly Hogan, president of Tougaloo College; and Marvelene Hughes, president of Dillard University. They were joined by Roger Kodat, deputy assistant secretary for government financial policy at the U.S. Department of Treasury.
“These funds will help ensure that these valued institutions continue to recover from the devastating effects of Hurricane Katrina, rebuilding their institutions and providing strong learning environments for their students,” said Secretary Spellings.
Supported by the Department’s HBCU Capital Financing Program, the loans will be used by the affected institutions to help them recover from Hurricane Katrina and rebuild their campuses. These loans feature several borrower-friendly benefits, including federal subsidies to cover interest payments above one percent.
SUNO will use its $44 million loan for new construction of its first residential facility; both Xavier University and Dillard University will use their loans, $165 million and $160 million respectively, for renovation and new construction; and Tougaloo College will use its $28.56 million loan for renovation, refinancing and campus modernizations. All loans are for 30 years.
These loans are the latest of the Education Department’s efforts to assist institutions affected by Hurricane Katrina and help them to recover and return to their pre-hurricane conditions. The department has also provided an additional $278 million to help institutions of higher education reopen schools and educate displaced students, in addition to $30 million more that will be awarded in the coming weeks. Federal student loan borrowers impacted by the disaster were given an additional six months of student loan-payment forbearance, and the department capped interest rates and reduced loan fees to HBCUs damaged by the storm.
The HBCU Capital Financing Program, which is financing the four loans being announced today, is a 10-year-old program that provides access to low-cost capital to help schools finance or refinance the repair, renovation and construction of classrooms, laboratories, libraries, dormitories, instructional equipment or research facilities. Under the Hurricane Recovery Act of 2006, the department was able to exceed the maximum program funding of $375 million to make loans to hurricane-affected HBCUs, thus providing nearly $400 million to these four schools.
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