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Education Dept. Plans To Boost

Education Dept. Plans To Boost
HBCU Loan Participation

If you direct facilities planning at a historically Black college or university, expect to hear from the U.S. Department of Education about financing your capital improvement needs. In response to a Government Accountability Office report slamming management of the largely unused Capital Financing Program for HBCUs, (see Diverse, Dec. 14) the Education Department plans to boost its efforts to get more schools involved.

Next year, the department will provide HBCUs with pre-applications and brochures describing the program and explaining each stage of the process.

“Before we do that, I want to know the needs of all the HBCUs,” says Don Watson, special assistant to the assistant secretary of education for HBCU financing. “We are going to send surveys to all the schools, not just to presidents but to facilities officers and [chief financial officers] so we can get feedback.” 

The GAO found that half of the loan funds available to 104 HBCUs sits untapped because the Education Department has failed to market the funds and has failed to evaluate the effectiveness of the contractor running the program. Schools complained that the loan process was too long and cumbersome, with one school complaining that it took more than six months to get an answer on whether a project qualified. 

Watson says eligible institutions may not have chosen to participate because they’d be taking out repayable loans rather than receiving grants as they’re accustomed. To get a loan, schools have to show that they are creditworthy and that their plans are realistic. For example, a loan to build housing that would hold many more students than the school can enroll would almost certainly be turned down.

Watson says Education Department officials don’t see the need to change the law at this time, though some institutions had complained about matters such as escrow requirements and monthly payments. “Before we ask for legislative changes, I think we first need to evaluate what is going on and do some studies on our own.”

Congressional Democrats who requested the GAO study say they may want to take a closer look at the program next year. U.S. Rep. Dale Kildee, D-Mich., says, “Congress must work more closely with the administration to ensure that the core goal of this program — to help schools create excellent learning environments for their students — is fully achieved.”

— By Charles Pekow

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