GAO Seeks Better Promotion of Loan Program for Black Colleges (despite 30% delinquency rate)

Wall Street Journal ^ | July 26, 2018 | Melissa Korn

[reaganaut1]

Nearly 30% of payments toward a loan program for historically black colleges and universities were delinquent last year, and three of the 46 schools have outright defaulted, according to a government watchdog report being released Thursday.

Still, the Government Accountability Office says the U.S. Department of Education should more aggressively encourage HBCUs to participate in the program.

The HBCU Capital Financing Program, created in 1992 to provide low-cost loans to the cash-strapped schools, had made more than $2 billion in loans as of last November, with $1.8 billion outstanding.

Years of underinvestment by states and the federal government, as well as small endowments and low alumni giving rates, have made capital investments, like building repairs, difficult for HBCUs. The GAO report says the loan program could offer much-needed financing for campus upgrades, or lower borrowing costs by refinancing existing debt.

Forty-six of 99 eligible schools have taken out loans.

The GAO said the Education Department should try to engage more public schools in the program, including by reaching out more to state university systems; just 13 of the 46 participating schools are public. Some are currently unable to take out loans because of state restrictions on using campuses as collateral or on participating in a pooled escrow account.

The GAO also criticized the department for not having conducted much analysis of the costs and benefits of the current program, including adjustments it has made to existing loans and modifications it could offer to other schools struggling with their payments.

Two of the participating schools defaulted on their loans last year, according to the GAO report. Twenty-nine percent of payments made in 2017 were late, and four colleges were considered delinquent as of April 2018.

[reaganaut1]

Recommending that a loan program with a 30% delinquency rate be expanded is something government bureaucrats do when it's not their money on the line.

Since blacks are no longer excluded from any college, why should there be any government programs targeted to HBCUs? They should be eligible for the federal programs other schools are.

[E. Pluribus Unum]

Evidently there aren’t enough young black people burying themselves in student loan debt for worthless degrees to satisfy demand.

[kickstart]

This attitude towards loans for the “disadvantaged” is the same reason we had an affirmative action president.

[Starboard]

the Government Accountability Office says the U.S. Department of Education should more aggressively encourage HBCUs to participate in the program

***************

Its not the GAO’s job to be pushing its own proposed “solutions”. They are supposed to be a watchdog that objectively evaluates performance and ensures accountability. They shouldn’t be telling congress WHAT do to about it.

[bk1000]

What about white colleges? ...oh, wait...nevermind...white college would be raciss.

[PGR88]

Another debt and printed-money based welfare program

If you got ‘em, smoke ‘em.

[Petrosius]

Why are we still supporting segregated colleges?

[A_perfect_lady]

Years of underinvestment by states and the federal government, as well as small endowments and low alumni giving rates, have made capital investments, like building repairs, difficult for HBCUs.

Cough, cough

[headstamp 2]

Welfare disguised as a loan, plain and simple.

[JimRed]

The 30% figure is less meaningful because we don’t know the overall delinquency rate. It could be 28% (statistical tie) or something way less.