Alabama State University in Montgomery is the latest HBCU to join the Historically Black College and University Capital Financing Program. The program, operated by the U.S. Department of Education allows HBCUs to consolidate their debt into a single package at a lower rate of interest. This can reduce the amount of interest the college or university has to pay and therefore bolsters the HBCU’s bottom line.
Alabama State University consolidated $137 million in debt into one package with a fixed 2.9 percent interest rate. It had been paying off debt with variable rates as high as 5.4 percent.
Quinton T. Ross, Jr., president of Alabama State University, stated that “this is a significant step in the right direction for Alabama State University. Being able to refinance a large portion of our bond indebtedness allows us to save millions of dollars.”
More than 40 HBCUs now participate in the debt refinancing federal program. More information about the program can be found here.