Budget deal in Washington wipes away millions in Katrina debt for SUNO, Dillard and Xavier

Feb. 10--Three historically black universities in New Orleans that have struggled in recent years with tight finances will see roughly $330 million in post-Katrina debt owed to the federal government wiped away under a provision tucked into a massive bipartisan congressional budget deal signed early Friday morning by President Donald Trump.

Dillard University, Southern University at New Orleans and Xavier University borrowed the money in 2007 from the federal Department of Education as they reeled from potentially crippling blows dealt by Hurricane Katrina. So too did Tougaloo College, an historically black institution just north of Jackson, Mississippi.

Little of the low-interest loans had been paid back in the decade since, as most of the universities struggled to regain their footing and boost enrollment. Payments were suspended in 2013 under a provision --which also restructured the debt -- inserted into a 2012 spending bill by former Sen. Mary Landrieu, D-Louisiana.

But the five-year loan forbearance period was set to expire in April, putting pressure on the universities. Each potentially faced millions in debt payments to the federal government.

"It would've been crippling," said Walter Kimbrough, the president of Dillard University, which borrowed about $160 million from the Department of Education after several feet of water inundated its Gentilly campus.

Many of the college's students come from middle- or low-income families -- with roughly 75 percent eligible for federal Pell Grants -- meaning hiking tuition wouldn't be an option, Kimbrough said.

Xavier University borrowed $165 million through the program while Southern University at New Orleans took out $44 million, according to U.S. Department of Education data compiled by the Wall Street Journal. Tougaloo borrowed another $28.5 million. The Journal reported in 2-17 that the four institutions together had paid back a total of roughly $12.4 million.

The loans' forgiveness brings to a close years of lobbying by the institutions and politicians from Louisiana and Mississippi. The provision wiping away the debt was included in the budget deal's massive $90 billion disaster-relief package primarily geared toward communities hit by Hurricanes Harvey, Irma and Maria.

Louisiana's congressional delegation, including New Orleans Congressman Cedric Richmond and Sen. Bill Cassidy, have worked with the presidents of the universities on the issue, Kimbrough said. Senate Appropriations Chairman Thad Cochran, a Mississippi Republican whose committee wrote the bill, played a key role including it in the text.

___

(c)2018 The Advocate, Baton Rouge, La.

Visit The Advocate, Baton Rouge, La. at www.theadvocate.com

Distributed by Tribune Content Agency, LLC.