Feds forgive post-Katrina debt for Xavier, Dillard and SUNO

Xavier University, Dillard University and Southern University at New Orleans, New Orleans’ three historically Black universities, and Tougaloo College in Mississippi, another HBCU, will see about $330 million in post-Katrina debt owed to the federal government cleared under a provision in a congressional budget deal signed by President Donald Trump.

Dillard, Xavier, SUNO and Tougaloo College borrowed the money in 2007 from the U.S. Department of Education as they struggled to deal with crippling blows dealt by Hurricane Katrina in 2005, which flooded 80 percent of New Orleans and devastated the Gulf Coast.

The New Orleans Advocate reported that little of the loans had been paid back over the past decade, as most of the universities tried to regain their footing and boost enrollment. Payments were suspended in 2013 under a provision inserted into a 2012 spending bill by former U.S. Sen. Mary Landrieu 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 Dr. Walter Kimbrough, the president of Dillard University, which borrowed about $160 million after several feet of water inundated its Gentilly campus.

Xavier University borrowed $165 million through the program, while SUNO took out $44 million and Tougaloo borrowed about $28.5 million, according to U.S. Department of Education data compiled by The Wall Street Journal.

The Journal reported in 2017 that the four historically Black institutions together had paid back about $12.4 million.

The loans’ forgiveness brings to a close years of lobbying by the institutions and elected officials 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 devastated in 2017 by Hurricanes Harvey, Irma and Maria.

“My predecessor, Dr. Victor Ukpolo, and I have been working with the other three universities for some time to make the case for this forgiveness,” SUNO Chancellor Lisa Mims-Devezin told The New Orleans Advocate. “Attempting to pay off the loan would have caused an additional decrease in available funds and would have required significant budget cuts, termination of programs and employee layoffs.”

The chancellor also noted that the vast majority of other Katrina federal loans have already been forgiven.

“This loan forgiveness will allow Xavier University to provide academic excellence to all of our students, today and into the future,” said Dr. Reynold Verret, president of Xavier University of Louisiana. “We would like to thank the members of the House and Senate from Louisiana and Mississippi who worked diligently to secure this legislation so that our historic institution can continue our work of contributing to a just and humane society.”

Louisiana’s congressional delegation, including Rep. Cedric Richmond of New Orleans and Sen. Bill Cassidy, 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 in including the provision in the text.

This article originally published in the February 19, 2018 print edition of The Louisiana Weekly newspaper.