Congress’ $900 billion coronavirus aid package, passed last month, includes $1.3 billion in loan forgiveness for Historically Black Colleges and Universities (HBCUs) that borrowed money through the HBCU Capital Financing Program.
“The forgiving of this saddling debt on HBCUs is nothing short of transformational,” said United Negro College Fund President Michael Lomax. “Congress can now add itself to the likes of [those] who have donated considerable resources to HBCUs to make life better for those who are the most deserving and know the impact of racial inequity in our country.”
HBCU Capital Financing Program
The bulk of the HBCUs’ debts stem from loans they acquired through the HBCU Capital Financing Program. Established as a means to help repair and renovate these institutions, the program in “exceptional circumstances” allowed these schools to take out loans for infrastructure development.
This helped HCBUs construct libraries as well as dormitories and on-campus housing for students. However, the money borrowed over the years piled up, leading to millions of dollars in debt per institution.
Institutions around the country are starting to feel the impact of the relief bill.
Wilberforce University, one of the first private HBCUs in the country, will be able to pay off their $25 million loan and finally be on the track for financial stability.
Institutions such as Bennett College and Shaw University will be on the receiving end of the debt relief as well, allowing them to invest their resources in growth and development for their respective communities.