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Major debt relief

Kimbrough cites faith, lots of work for forgiveness of $160 million federal loan

By India Walton, Online editor
On February 16, 2018

NEW ORLEANS (Feb. 16, 2018) – University President Walter Kimbrough described passage of the bill forgiving Dillard University’s post-Hurricane Katrina $160 million federal loan on Feb. 9 as “faith” with a lot of work supporting it.

“Faith has to have work to support it, and most people have no idea how much work has been done for a decade on this,” Kimbrough said.

A congressional budget deal signed by President Trump on Feb. 9 forgave about $330 million in post-Katrina debt owed by four HBCUs in Louisiana and Mississippi. In addition to Dillard, Xavier University had borrowed $154 million; Southern University, $44 million; and Tougaloo College, $28.5 million, according to data cited by the Wall Street Journal.

Repairs after Katrina pushed several feet of water onto DU’s campus cost about $400 million, Kimbrough said.

The Journal reported the four institutions had paid back about $12.4 million, with $1.9 million repaid by Dillard, according to Kimbrough.

A 2012 deal struck with the help of former U.S. Sen. Mary Landrieu, D-La., in 2012 provided a five-year forbearance period that was set to expire this April.

Kimbrough said restarting the debt payments would have been “crippling.” Even with “rescoring” of the debt, the university faced repaying $28 million plus interest over 20 years.

He said if the repayment schedule had been restarted in April, “we would have probably lost some faculty, staff and academic programs. So even some good programs that have few students would have been in jeopardy.”

Kimbrough noted that 95 percent of government loans given out following Katrina had already been forgiven, so “we were going to keep working until it was forgiven, so I always knew it would go away at some point.”

In a news release, Kimbrough attributed the action to bipartisan efforts of Louisiana’s congressmen, along with U.S. Sen. Thad Cochran, R-Miss., “for his leadership that was key to getting this done.”

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