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Wednesday, July 19, 2017

Pigford/Minority Mortgage Meltdown U.? America’s Most Racist, Incompetent, Colleges and Universities Got Billions of Dollars in Federal “Loans” They Had No Intention of Ever Paying Back, and Applied for the “Loans” Under Fraudulent Pretenses!

Re-posted by Nicholas Stix

I thank the old friend who sent me this article, writing:

black colleges struggle with debt - Google Search

Major article in yesterday’s (Tuesday’s) Wall Street Journal. They borrowed billion$ from Feds to upgrade their campuses or refinance existing debt.

But they can’t repay and….

https://www.google.com/search?q=black+colleges+struggle+with+debt&ie=utf-8&oe=utf-8
https://www.wsj.com/.../loan-program-for-black-colleges-struggles-with-oversight-repay...

U.S. News: Black Colleges Struggle With Debt --- As federal loans to schools hit nearly $2 billion, some lobby for relief from payments Korn, Melissa. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]18 July 2017: A.3.

Abstract

The federal government has lent out nearly $2 billion over the past two decades to help dozens of historically black colleges and universities upgrade their campuses or refinance debt. Officials at Stillman College in Tuscaloosa, Ala., are lobbying the Education Department to have their $40 million loan modified or forgiven, arguing that the funds it got through the Historically Black College and University Capital Financing Program in 2012 were secured with overly optimistic enrollment projections. "A lot of this has been left without the oversight that we've needed," said Rep. Alma Adams (D., N.C.), who co-sponsored a bill this year requiring more reporting by the board and allowing the Education Department to provide financial counseling to schools that don't meet the loan program's requirements. Schools On Hook For Each Other Created by Congress in 1992, the Historically Black College and University Capital Financing Program encouraged the colleges to participate "as a coalition, as a collective, being willing to help other institutions," said Brian Johnson, who until last month was president of Tuskegee University.

The federal government has lent out nearly $2 billion over the past two decades

Full Text

The federal government has lent out nearly $2 billion over the past two decades to help dozens of historically black colleges and universities upgrade their campuses or refinance debt. Officials at Stillman College in Tuscaloosa, Ala., are lobbying the Education Department to have their $40 million loan modified or forgiven, arguing that the funds it got through the Historically Black College and University Capital Financing Program in 2012 were secured with overly optimistic enrollment projections. "A lot of this has been left without the oversight that we've needed," said Rep. Alma Adams (D., N.C.), who co-sponsored a bill this year requiring more reporting by the board and allowing the Education Department to provide financial counseling to schools that don't meet the loan program's requirements. Schools On Hook For Each Other Created by Congress in 1992, the Historically Black College and University Capital Financing Program encouraged the colleges to participate "as a coalition, as a collective, being willing to help other institutions," said Brian Johnson, who until last month was president of Tuskegee University.

The federal government has lent out nearly $2 billion over the past two decades

The federal government has lent out nearly $2 billion over the past two decades to help dozens of historically black colleges and universities upgrade their campuses or refinance debt. Officials at Stillman College in Tuscaloosa, Ala., are lobbying the Education Department to have their $40 million loan modified or forgiven, arguing that the funds it got through the Historically Black College and University Capital Financing Program in 2012 were secured with overly optimistic enrollment projections. "A lot of this has been left without the oversight that we've needed," said Rep. Alma Adams (D., N.C.), who co-sponsored a bill this year requiring more reporting by the board and allowing the Education Department to provide financial counseling to schools that don't meet the loan program's requirements.

Schools On Hook For Each Other

Created by Congress in 1992, the Historically Black College and University Capital Financing Program encouraged the colleges to participate "as a coalition, as a collective, being willing to help other institutions," said Brian Johnson, who until last month was president of Tuskegee University.

The federal government has lent out nearly $2 billion over the past two decades to help dozens of historically black colleges and universities upgrade their campuses or refinance debt.

But only a fraction of the money has been repaid, oversight is limited and the lifeline promised to the schools, which have played a key role in educating African-Americans since the Civil War, has become more of an albatross for some.

Officials at Stillman College in Tuscaloosa, Ala., are lobbying the Education Department to have their $40 million loan modified or forgiven, arguing that the funds it got through the Historically Black College and University Capital Financing Program in 2012 were secured with overly optimistic enrollment projections. Barber-Scotia College in Concord, N.C., defaulted on its loan in 2005 after it lost its accreditation.

[If officials at Stillman College are telling the truth now, it would mean that they and/or their predecessors committed massive fraud in 2012, and should be prosecuted and imprisoned. Forensic accounting must also determine whether any of them embezzled some or all of the money.]

And four schools ravaged by Hurricanes Katrina and Rita, which in 2007 took out a combined $361 million in loans capped at 1% interest over 30 years, have paid back just roughly $12.4 million of it in the past decade and were granted a five-year forbearance period in 2013 when enrollment didn't rebound quickly.

"We've got to have much stricter underwriting requirements" to ensure that schools can handle the new debt, said Johnny C. Taylor Jr., president and chief executive of the Thurgood Marshall College Fund, which represents publicly supported HBCUs, and a member of the loan program's federal advisory board.

The program has long faced high delinquency rates.

The Education Department's fiscal 2017 budget request shows that the program had a target delinquency rate of 14%. Its actual delinquency rate-reflecting payments that were between 11 and 59 days late -- was 19% in fiscal 2012, and 36% in fiscal 2013. The budget paper doesn't include more recent figures for that performance metric.

Donald Watson, director of the federal loan program for 10 years, said at a May 2015 advisory board meeting that there were schools on his "watch list" because of concerns about impending financial trouble, and others that he described as "habitual late payers." The board hasn't met since then.
"A lot of this has been left without the oversight that we've needed," said Rep. Alma Adams (D., N.C.), who co-sponsored a bill this year requiring more reporting by the board and allowing the Education Department to provide financial counseling to schools that don't meet the loan program's requirements. "The schools that participate should be constantly assessed to determine whether they're on track for repayment."

Stillman hadn't been making regular payments for at least a year and a half before President Cynthia Warrick took the helm on an interim basis in January.

Stillman used its loan funds in part to refinance a loan that was used to build a new football stadium; it gave up the sport in late 2015, eliminating ticket-sales revenue that could have helped cover debt payments.

A fundraising appeal this spring allowed Stillman to make its April loan payment, but Dr. Warrick said it would need to increase enrollment to at least 800, from its current 570, to afford another installment.

Dr. Warrick said she has been in regular contact with Education Department officials and is hopeful that the repayment plan will be adjusted.

"It's in the nation's best interest to either give us a deferral or, if they evaluate the entire program and all of these schools and what we do for the nation, that we should get a bailout just like the automobile industry and the banking industry," she said.

[“What we do for the nation”? They do nothing but suck money out of the pockets of hard-working, white taxpayers.]

Education Department spokeswoman Liz Hill said the department doesn't go into details about specific schools' finances, but noted that penalties are laid out in loan agreements and failure to repay can affect schools' accreditation and ability to borrow in the future. Ms. Hill said schools "must be creditworthy to access this program," and not every school that applies is approved.

Morehouse College and Texas Southern University were rated as investment-grade by Moody's Investors Service at the time they got loans, but others were speculative bets.

"The federal government needs to be a little more particular in their lending," said Marybeth Gasman, professor of higher education and director of the Penn Center for Minority Serving Institutions at the University of Pennsylvania. "You should not be able to borrow anything unless you have a plan to pay it back.

3 comments:

Anonymous said...

Reparations by the back door. Built the new stadium using diverted [illegal?] funds and then gave up the sport. Really smart.

Anonymous said...

Why are there "historical black colleges"? Everyone knows, including the federal government and associates, that these corrupt groups are nothing but diploma mills. They only exist because the feds keep taxpayer's money flowing to them.

Anonymous said...

There was a time that at least some of these colleges were legitimate and not just diploma mills. Now, who knows? But legitimate or not, a funding programs specifically designated for black colleges only IS nothing but a reparations scheme, plain and simple. How many GOP backed it?

- The Gentle Grizzly