Department of Education

HISTORICALLY BLACK COLLEGE AND UNIVERSITY 

CAPITAL FINANCING PROGRAM ACCOUNT

Fiscal Year 2020 Budget Request

CONTENTS

Page

Appropriations Language ........................................................................................................U-1

Analysis of Language Provisions and Changes.......................................................................U-3

Appropriation, Adjustments, and Transfers .............................................................................U-5

Obligations by Object Classification ........................................................................................U-6

Authorizing Legislation............................................................................................................U-7

Appropriations History.............................................................................................................U-8

Activities:

Federal administration ........................................................................................................U-9
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Appropriations Language

For the cost of guaranteed loans, $20,150,000, as authorized pursuant to part D of title III of 

the HEA, which shall remain available through September 30, [2020] 2021.

1 Provided, That such 

costs, including the cost of modifying such loans, shall be as defined in section 502 of the 

Congressional Budget Act of 1974:2 Provided further, That these funds are available to 

subsidize total loan principal, any part of which is to be guaranteed, not to exceed 

[$580,000,000] $212,100,000.

3 Provided further, That these funds may be used to support loans 

to public and private Historically Black Colleges and Universities without regard to the limitations 

within section 344(a) of the HEA.4

In addition, $20,000,000 shall be made available to provide for the deferment of loans made 

under part D of title III of the HEA to eligible institutions that are private Historically Black 

Colleges and Universities, which apply for the deferment of such a loan and demonstrate 

financial need for such deferment by having a score of 2.6 or less on the Department of 

Education’s financial responsibility test: Provided, That during the period of deferment of such a 

loan, interest on the loan will not accrue or be capitalized, and the period of deferment shall be 

for at least a period of 3-fiscal years and not more than 6-fiscal years: Provided further, That 

funds available under this paragraph shall [be used] not be available to fund eligible deferment 

requests submitted for this purpose in the current fiscal year:

5 Provided further, That the 

Secretary shall create and execute an outreach plan to work with States and the Capital 

Financing Advisory Board to improve outreach to States and help additional public Historically 

Black Colleges and Universities participate in the program.6

In addition, for administrative expenses to carry out the Historically Black College and 

University Capital Financing Program entered into pursuant to part D of title III of the HEA, 

$334,000.7
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NOTE

Each language provision that is followed by a footnote reference is explained in the Analysis of Language 

Provisions and Changes document which follows the appropriations language. 
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Analysis of Language Provisions and Changes

Language Provision Explanation

1 For the cost of guaranteed loans, 

$20,150,000, as authorized pursuant to part D 

of title III of the Higher Education Act of 1965 

(HEA), which shall remain available through 

September 30 [2020] 2021:

In accordance with the Federal Credit Reform 

Act of 1990, the requested language 

appropriates $20.15 million in subsidy for new 

loans to be made under the HBCU Capital 

Financing program. This amount will be 

available for obligation for 2 fiscal years. No 

loans may be insured under the program that 

would require subsidy above this amount.

2 Provided, That such costs, including the cost 

of modifying such loans, shall be as defined in 

section 502 of the Congressional Budget Act of 

1974:

Specifies that any program costs or cost 

modifications shall comply with the definitions 

that are provided in Section 502 of the stated 

Act.

3 Provided further, That these funds are 

available to subsidize total loan principal, any 

part of which is to be guaranteed, not to exceed 

[$580,000,000] $212,100,000:

Limits the amount of bonds that may be insured 

under the HBCU Capital Financing program to 

$212.1 million in fiscal year 2020.

4Provided further, That these funds may be 

used to support loans to public and private 

historically Black colleges and universities 

without regard to the limitations within section 

344(a) of the HEA.

Allows the program to make loans in fiscal 

year 2020 without regard to the language in 

HEA section 344(a) that sets limits on the 

amount of the program’s loan authority that 

can be devoted to private versus public 

HBCUs.

5Provided further, That funds available under 

this paragraph shall [be used] not be available

to fund eligible deferment requests submitted 

for this purpose in the current fiscal year.

The requested language ceases to provide 

funding to continue deferments granted in 

2018 or 2019 to eligible institutions who 

applied for it in 2018.

6 Provided further, That the Secretary shall 

create and execute an outreach plan to work 

with States and the Capital Financing Advisory 

Board to improve outreach to States and help 

additional public Historically Black Colleges and 

Universities participate in the program.

Requires the Secretary to conduct outreach to 

assist institutions in accessing the capital 

finance program.
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7

In addition, for administrative expenses to 

carry out the Historically Black College and 

University Capital Financing Program entered 

into pursuant to part D of title III of the HEA, 

$334,000.

In accordance with the Federal Credit Reform 

Act of 1990, this language appropriates funds 

to administer new loans, service existing loan 

obligations, and provide technical assistance 

to prospective and existing program 

participants.
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Appropriation, Adjustments, and Transfers

(dollars in thousands)

Appropriation/Adjustments/Transfers 2018 2019 2020 

Discretionary: 

Appropriation.................................................................. $30,484 $40,484 $40,484

Mandatory: 

Appropriation.................................................................. 41,318 7,678 0

Total, discretionary and mandatory appropriation....... 71,802 48,162 40,484
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Obligations by Object Classification

(dollars in thousands)

Obj ect Class C ode

Object Class

2018

Actual

2019

Appropriation

2020

Request

Change 

from 2019 

to 2020

11.10 Full-time permanent $148 $201 $202 +$1

11.31 Full-time temporary 0 0 0 0

11.52 Awards 1 2 2 0

Compensation subtotal 149 203 204 1

12.00 Benefits 44 64 64 0

Comp/benefits subtotal 193 267 268 1

21.00 Travel 13 27 30 3

23.10 Rental payments to GSA 7 8 8 0

Subtotal Travel/Rent 20 35 38 4

25.21 Other services 2 7 6 -1

25.22 Training/tuition contracts 0 4 2 -2

25.30 

Goods/services from Federal 

sources 1 1 1 0

25.72 IT services/contracts 19 19 18 -1

Subtotal 25 22 31 27 -4

26.00 Supplies 1 1 1 0

Total, Obligations 236 334 334 0
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Authorizing Legislation

(dollars in thousands)

Activity

2019

Authorized

2019

Appropriation

2020

Authorized

2020

Request

Federal administration (Federal Credit Reform Act of 1990, 

section 505(e) and Title III, part D, HEA) ................................. Indefinite $334

To be 

determined $334

Loan subsidy (Federal Credit Reform Act of 1990, section 

505(e), Title III, part D, HEA) .................................................... Indefinite 40,150

To be 

determined 40,150

Reestimate of existing loan subsidies (Federal Credit Reform 

Act of 1990, section 504(f)) ..................................................... Indefinite 7,6781Indefinite 0

Total Discretionary Appropriation .................................................. 40,484 40,484

Total Mandatory Appropriation 7,678 0

1

The 2019 reestimate of existing loans excludes budgetary interest adjustments.
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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate 

to Congress

House 

Allowance

Senate 

AllowanceFootnote AppropriationFootnote

2011 $20,582 $20,5821 $20,582 $20,5412

2012 20,582 20,5413 20,541 20,502

2013 20,502 19,4304 19,430 19,430

2014 20,502 N/A5 20,4846 19,430

2015 19,430 N/A720,444 19,430

2016 19,436 19,096 19,096620,1507

2017 20,112 20,112820,112820,1128

2018 20,150 30,150930,150930,1509

2019 20,150 40,15010 40,15010 40,15010

2020 40,150

1

The level for the House allowance reflects the House-passed full-year continuing resolution.

2

The level for appropriation reflects the Department of Defense and Full-Year Continuing Appropriations 

Act, 2011 (P.L. 112-10).

3

The level for the House allowance reflects an introduced bill and the level for the Senate allowances 

reflects Senate Committee action only.

4

The level for the House and Senate allowances reflect action on the regular annual 2013 appropriations 

bill, which proceeded in the 112th Congress only through the House Subcommittee and the Senate 

Committee.

5

The House allowance is shown as N/A because there was no Subcommittee action.

6

The level for the Senate allowance reflects Senate Subcommittee action only.

7 The levels for House and Senate allowances reflect action on the regular annual 2016 appropriations 

bill, which proceeded in the 114th Congress only through the House Committee and Senate Committee.

8

The levels for House and Senate allowances reflect Committee action on the regular annual 2017 

appropriation bill; the Appropriation reflects the Consolidated Appropriations Act, 2017.

9

The level for the House allowance reflects floor action on the Omnibus appropriations bill; the Senate 

allowance reflects Committee action on the regular annual 2018 appropriations bill; the Appropriation 

reflects the Consolidated Appropriations Act, 2018 (P.L. 115-141).The 2018 amount reflects an additional 

$10 million for outstanding loan deferments that is expected to be appropriated for at least three fiscal 

years.

10 The levels for the House and Senate allowance reflect Committee action on the regular annual 2019 

appropriations bill; the Appropriation reflect enactment of the Department of Defense and Labor, Health 

and Human Services, and Education Appropriations Act, 2019 (P.L. 115-245). The 2019 amount reflects 

an additional $20 million for outstanding loan deferments.
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Federal administration

(Federal Credit Reform Act of 1990, Section 505(e) and the Higher Education Act of 1965, 

Title III, Part D)

(dollars in thousands)

FY 2020 Authorization:

Budget Authority:

2019 2020 Change

Federal Administration $334 $334 0

Loan subsidy costs 40,150 40,150 0

Total 40,484 40,484 0

Full-time equivalent 

employee 1 1 0

PROGRAM DESCRIPTION

Since fiscal year 1996, the Historically Black Colleges and Universities Capital Financing 

Program has provided Historically Black Colleges and Universities (HBCUs) with access to 

capital financing for the repair, renovation, and, in exceptional circumstances, construction or 

acquisition of educational facilities, instructional equipment, research instrumentation, and 

physical infrastructure. HBCUs, which have played a prominent role in our Nation’s history, have 

significant needs for capital improvements. However, in most cases these institutions cannot 

access traditional funding sources at reasonable interest rates. The HBCU Capital Financing 

Program provides HBCUs with access to low-cost financing to fund infrastructure 

improvements. This program has made low-interest loans available for capital improvements to 

some of the Nation’s most vulnerable institutions of higher education. These loans have allowed 

these institutions to make improvements to their capital stock, especially academic facilities and 

student living quarters. In order to limit the Federal Government’s exposure to incurring losses 

due to defaults and delinquencies, 5 percent of all loans are deposited in a pooled escrow 

account from which loan payments can be made in the event of defaults or delinquencies.

The HBCU Capital Financing Advisory Board, appointed by the Secretary, advises the 

Secretary and the Designated Bonding Authority (DBA) as to the most effective and efficient 

means of implementing the program. The DBA, also selected by the Secretary, assists with the 

operation of the HBCU Capital Financing Program, which includes raising bond capital, making 

loans to eligible institutions, charging interest, and providing for a schedule of repayments. 

Direct loans are financed through the Federal Financing Bank, and guaranteed loans are 
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financed through the private market, with all loan payments fully insured by the Federal 

Government.

Federal Administration

Funds for this activity pay the Federal costs for administering the HBCU Capital Financing 

Program. The administrative costs for this program include the personnel compensation and 

benefits for 1 full-time equivalent (FTE) employee, overhead, and other administrative services. 

The FTE reported in this account reflects the Department's estimate of the staff time devoted to 

administering the program. This estimate does not include FTEs associated with the 

Department's centralized services, which are reflected in the Program Administration account in 

the Salaries and Expenses Overview. The major non-personnel costs include support for the 

HBCU Capital Financing Advisory Board and a contract with the DBA to provide technical 

assistance workshops.

Subsidy Costs

In the first 10 years that the HBCU Capital Financing Program operated, there were no 

delinquencies or defaults. The rigorous application and credit review process imposed by the 

Department and DBA was credited with ensuring that recipient institutions receiving loans would 

be able to comply with the terms of their loans. However, increases in financial instability by

certain HBCUs have affected Federal liability in the program. Delinquency rates fluctuate widely 

from year to year, but the general trend is that HBCUs are facing financial strain. This is 

evidenced by Congress granting appropriations for loan deferments to private HBCUs in fiscal 

2018 and 2019. Accordingly, default rate assumptions for the portfolio have been increased to 

reflect the heightened risk profile, resulting in an upward reestimate of existing loan subsidies in 

fiscal years 2017, 2018, and 2019. The 2020 budget request includes $20 million to continue to 

support loan deferments granted in 2018 or 2019 to eligible institutions who applied in 2018. 

While requesting funding necessary to complete previously authorized deferments, the 2020 

budget request does not support funding for additional deferment authority.

Subsidy levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

2015............................................................................... .... $19,096

2016................................................................................. .... 20,150

2017................................................................................. .... 20,112

2018................................................................................. .... 30,150

2019................................................................................. .... 40,150
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FY 2020 BUDGET REQUEST

The Department requests $40.5 million for the Historically Black College and University (HBCU) 

Capital Financing Program account for fiscal year 2020, $10 million more than the the fiscal 

year 2018 appropriation and level with the 2019 appropriation. The request includes $334,000

for administrative expenses and $20.2 million for new loan subsidy costs. In addition, the 

request includes $20 million for the fiscal year 2020 cost of a one-time cohort of loan 

deferments to eligible private HBCUs made in fiscal year 2018. The 2020 budget request does 

not support funding for additional deferment authority.

The $334,000 requested for administration will also be used to maintain technical assistance 

services. It is estimated that the requested subsidy amount will be sufficient to guarantee $212

million in new loans.
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PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2018 2019 2020

Number of new loans:

New loans to Private HBCUs 1 2 2

New loans to Public HBCUs 2 2 2

Total new loans 3 4 4

New loan volume:

New loans to Private HBCUs $45,000 $142,500 $140,000

New loans to Public HBCUs 177,500 142,500 140,000

Total new loan volume 222,500 285,000 280,100

Total number of loans:

Total loans to Private HBCUs 51 53 55

Total loans to Public HBCUs 20 22 24

Total number of l oans 68 75 79

Total loan awards:

Total loans to Private HBCUs $1,481,385 $1,623,885 $1,763,885

Total loans to Public HBCUs 897,490 1,039,990 1,179,990

Total outstandi ng awards 2,378,875 2,663,875 2,943,875

Total outstanding loan awards:

Total loans to Private HBCUs $1,595,662 $1,730,536 $1,975,064

Total loans to Public HBCUs 741,394 804,060 917,676

Total outstandi ng awards 2,337,056 2,534,596 2,892,740
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PROGRAM PERFORMANCE MEASURES

Performance Measures

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, measures, and performance targets and data; and an assessment of the 

progress made toward achieving program results. Achievement of program results is based on 

the cumulative effect of the resources provided in previous years and those requested in fiscal 

year 2020 and future years, and the resources and efforts invested by those served by this 

program. 

Goal: To improve loan recipients’ overall financial stability and enhance their ability to 

attract, retain and educate students.

Objective: Total revenues and investment return will increase for loan recipients.

Measure: The percentage of borrowers who increase revenues and investment return annually.

Year Target Actual

2015 70 26

2016 70 44

2017 70 75

2018 70

2019 70

2020 70

Additional information: This performance measure is the percentage of HBCUs that 

experienced an increase in revenue over the prior year. This measure is one gauge of improved 

institutional financial stability and capability to fulfill their educational mission. Loans that fund 

capital and infrastructure improvements are key assets for providing quality postsecondary 

education. Some HBCUs have significant cash flow problems, which capital improvements from 

this program are expected to help ameliorate. Revenue is a strong indicator of an institution’s 

success at maintaining or increasing enrollment, expanding fundraising activities, and,

ultimately, the institution’s financial stability. The ability to maintain or increase revenue 

suggests that an institution will be able to service its debts and maintain its operations. This 

measure helps to assess the financial solvency of borrowers, which is a gauge of default 

potential. This measure is calculated as the number of HBCUs in the program that have 

experienced an increase in revenue over the prior fiscal year, divided by the total number of 

HBCUs in the program, and multiplied by 100. The data source for total revenues is the National 

Center for Educational Statistics' Integrated Postsecondary Education Data System. 
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Goal: To improve the financial stability of recipient institutions.

Objective: Improve the delinquency rate of loan recipients.

Measure: The delinquency rate of loan recipients.

Year Target Actual

2015 14 36

2016 14 33

2017 14 29

2018 14 29

2020 14

Additional information: The delinquency rate—the percentage of loan payments received 

between 11-59 days after the due date—indicates the financial stability of borrowers. The more 

delinquent a borrower, the greater level of financial instability exists. The ability to make timely 

payments reduces the likelihood of default. It also indicates successful monitoring, technical 

assistance, and enforcement by the Department and the DBA in administering the program. The 

2018 delinquency rate includes missed payments by schools that have since been granted a 

loan deferment. 

Goal: To improve the capacity of program borrowers to improve student success and 

provide high-quality educational opportunities for their students.

Objective: Maintain or increase the persistence rate of first-year students at borrower 

institutions.

Measure: The full-time retention rate is the percent of the fall full-time cohort from the prior year 

minus exclusions from the fall full-time cohort that re-enrolled at the institution as either full or 

part-time in the current year.

Year Target Actual

2015 70 59

2016 71 58

2017 71 57

2018 71

2019 71

2020

Additional information: New and improved physical facilities can help an institution of higher 

education increase student persistence. Many of the loans have provided support for student 

housing, and many of the borrowers have explicitly cited the lack of adequate student housing 

and facilities as a reason for high attrition rates on their campuses in their loan applications. 

Historically, the persistence rate at HBCUs receiving loans through the capital finance program 

is about the same as at HBCUs overall. This measure relies on data taken from the Integrated 

Postsecondary Education Data System maintained by the National Center for Education 

Statistics.