RALEIGH N.C. – One of the South’s oldest historically Black colleges landed a $31 million federal loan that shifts millions of dollars in debt from bankers to taxpayers.
The U.S. Education Department loan, secured with help from U.S. Rep. Bob Etheridge, D-N.C., allows Shaw University to shift millions in debt that it owes to Charlotte-based Bank of America, The News & Observer of Raleigh reported Wednesday.
The cash-strapped school’s interim president, Dorothy Cowser Yancy, said the federal loan restructures several pieces of privately held debt. She would not disclose the size of the loan because Shaw is a private college.
Education Department officials confirmed the amount is roughly $30 million, the newspaper reported.
“The debt needed to be renegotiated,” Yancy said.
A memo from interim Vice President Lee Monroe said the deal allows Shaw to stretch out repayment over 20 years, reduces collateral, and drops the interest rate nearly two percentage points to 4.1 percent.
About 2,700 students attend Shaw, a liberal arts university affiliated with the Baptist Church. Founded in 1865, Shaw describes itself as the first historically Black college of the South.
