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 they owe to the federal government wiped away under a provision tucked into a massive bipartisan congressional budget deal signed Friday morning by President Donald Trump.
Dillard University, Xavier University and Southern University at New Orleans borrowed the money in 2007 from the federal Department of Education as they reeled from potentially crippling blows dealt by Hurricane Katrina.
So did Tougaloo College, a historically black institution just north of Jackson, Mississippi.
Little of the low-interest loans had been paid back in the past decade, 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.
Read more of this story from our friends at The New Orleans Advocate