Federal stimulus bill eliminates $1.3B in HBCU debt
Jeremy M. Lazarus | 1/7/2021, 6 p.m.
In 2012, Virginia Union University was awarded a $17 million federal loan as it began development of a combination conference center and residence hall.
Six years later, VUU President Hakim J. Lucas is preparing to tear up the loan documents because there suddenly is no longer any debt to repay on the Claude G. Perkins Living and Learning Center that opened in 2014.
Like other historically Black colleges and universities, VUU is benefitting from the new federal COVID-19 stimulus bill that became law just before the nation rang in the new year.
Along with $600 stimulus checks to individuals and 11 weeks of extended unemployment benefits, a little-noticed section of the bill directed the U.S. Secretary of Education to eliminate $1.3 billion in loans still active in the government’s HBCU Capital Financing Program.
The move follows major donations from author and philanthropist MacKenzie Scott, the wealthy ex-wife of Amazon founder Jeff Bezos.
Since 1996, the federal capital financing program has assisted 50 HBCUs to renovate aging buildings or build new classrooms and dormitories.
According to the loan program, the legislation that President Trump signed into law Dec. 27 will eliminate 86 loans that have been provided to 45 colleges and universities. Among them is Hampton University, the only other HBCU in Virginia to tap the program. Hampton will be relieved of $50 million in debt.
Credit for this initiative is going to Congresswoman Alma Adams of Charlotte, N.C., a Democrat who proposed the HBCU relief that was included in the 2,126-page bill.
Also in the bill, according to Rep. Adams and Rep. Robert C. “Bobby” Scott of Newport News, chair of the House Education Committee, is a major expansion of the Pell Grant program, including restoring eligibility to those in prison.
Rep. Adams said the stimulus package also includes a reform of the federal student loan application process to make it simpler and easier for students and parents to seek financial support while also removing barriers that have blocked some from accessing loans.
