Department of Education

HISTORICALLY BLACK COLLEGE AND UNIVERSITY 

CAPITAL FINANCING PROGRAM ACCOUNT

Fiscal Year 2021 Budget Request

CONTENTS

Page

Appropriations Language ........................................................................................................V-1

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

Appropriation, Adjustments, and Transfers .............................................................................V-4

Obligations by Object Classification ........................................................................................V-5

Authorizing Legislation............................................................................................................V-6

Appropriations History.............................................................................................................V-7

Activities:

Federal Administration........................................................................................................ V-8

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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, [2021] 2022:

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 

[$212,100,000] $220,000,000:

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, [$16,000,000] $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 the loan has not been paid in full and is 

not paid in full during the period of deferment: Provided further, 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 to fund eligible 

deferment requests submitted for this purpose in fiscal year 2018: 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.
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[In addition, $10,000,000 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 public Historically Black 

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

financial need for such deferment, which shall be determined by the Secretary of Education 

based on factors including, but not limited to, equal to or greater than 5 percent of the school’s 

operating revenue relative to its annual debt service payment: 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.]

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, 

$334,000.5(Department of Education Appropriations Act, 2020.)

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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CAPITAL FINANCING PROGRAM ACCOUNT

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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, [2021] 2022:

In accordance with the Federal Credit Reform 

Act of 1990, the requested language 

appropriates $20.150 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:

This requested language 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

[$212,100,000] $220,000,000:

The requested language limits the amount of 

bonds that may be insured under the HBCU 

Capital Financing program to $220 million in 

fiscal year 2021. This is an increase of $7.9 

million over 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.

The requested language allows the program to 

make loans in fiscal year 2021 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.

5

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 2019 2020 2021

Discretionary: 

Appropriation.............................................................. $40,484 $46,484 $40,484

Mandatory: 

Reestimate of existing loan subsidies......................... 7,678 -41,708 0

Total, discretionary and mandatory appropriation... 48,162 4,776 40,484
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Obligations by Object Classification

(dollars in thousands)

Obj ect Class C ode Object Class

2019

Actual

2020

Appropriation

2021

Request

Change 

from 2020 to 

2021

11.10 Full-time permanent $201 $190 $195 +$5

11.31 Full-time temporary 0 0 0 0

11.52 Awards 1 2 3 +1

Compensation subtotal 202 192 198 +6

12.00 Benefits 64 57 59 +2

Comp/benefits subtotal 266 249 257 +8

21.00 Travel 26 26 15 -11

23.10 Rental payments to GSA 8 6 6 0

Subtotal Travel/Rent 34 32 21 -11

25.21 Other services 7 6 6 0

25.22 Training/tuition contracts 6 2 2 0

25.30 Goods/services from 

Federal sources 1 1 1 0

25.72 IT services/contracts 19 43 39 -4

Subtotal 25 33 52 48 -4

26.00 Supplies 1 1 1 0

Total, Budget Authority 334 334 334 0
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Authorizing Legislation

(dollars in thousands)

Activity

2020

Authorized

2020

Estimate 

2021

Authorized

2021

Request

Federal administration (Federal Credit Reform Act of 1990, 

Section 505(e) and HEA Title III, Part D) Indefinite $334

To be 

determined $334

Loan subsidy (Federal Credit Reform Act of 1990, Section 

505(e), and HEA Title III, Part D)

Indefinite 46,150

To be 

determined 40,150

Reestimate of existing loan subsidies (Federal Credit Reform 

Act of 1990, Section 504(f)) Indefinite -41,7081

To be 

determined 0

Total discretionary appropriation 46,484 40,484

Total mandatory appropriation

-41,708 0

1 The 2020 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

2012 $20,582 $20,5411 $20,5411 $20,502

2013 20,502 19,4302 19,4302 19,430

2014 20,502 N/A3 20,4844 19,430

2015 19,430 N/A3 20,444 19,430

2016 19,436 19,0965 19,0965 20,150

2017 20,112 20,1126 20,1126 20,1126

2018 20,150 30,1507 30,1507 30,1507

2019 40,150 40,1508 40,1508 40,1508

2020 40,150 50,484 40,1509 46,1509

2021 40,150

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

reflects Senate Committee action only.

2 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.

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

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

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

6 The levels for House and Senate allowances reflect action on the regular annual 2017 appropriations; 

the Appropriation reflects the Consolidated Appropriations Act, 2017

7 The 2018 amount reflects an additional $10 million for outstanding loan deferments that is expected to 

be appropriated for at least three fiscal years

8 The levels for the House and Senate Allowance reflects Committee action on the regular annual 2019 

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

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

9 The Senate allowance reflects the Chairman’s mark; the Appropriation reflects the Further Consolidated 

Appropriation Act, 2020 (P.L. 116-94)
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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 2021 Authorization: To be determined1

Budget Authority:

2020 

Appropriation

2021 

Request

Change from

2020 to 2021

Federal Administration $334 $334 $0

Loan subsidy costs 46,150 40,150 -6,000

Total 46,484 40,484 -6,000

Full-time equivalent employee 2 2 0

1 The GEPA extension of the Higher Education Act expired September 30, 2015; reauthorizing legislation is sought 

for FY 2021.

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 
HISTORICALLY BLACK COLLEGE AND UNIVERSITY

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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 2 full-time equivalent (FTE) employees, 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. 

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.

Loan 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 HBCUs in fiscal years 

2018, 2019 and 2020. However, the 2020 reestimate of existing loans is downward of 

$42 million due to technical adjustments to the financial model and higher present value factors

compared to 2019.

Discretionary funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

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

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

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

2019.................................................................................... 40,150

2020.................................................................................... 46,150
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FY 2021 BUDGET REQUEST

For fiscal year 2021, the Administration requests $40.5 million for the Historically Black College 

and University (HBCU) Capital Financing Program account, less than the fiscal year 2020 

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 2021 to 

fund deferments for previously approved institutions in 2018. The 2021 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 over 

$200 million in new loans.

PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2019 2020 2021

Number of new loans:

New loans to Private HBCUs 1 2 1

New loans to Public HBCUs 2 2 2

Total new loans 3 4 3

New loan volume:

New loans to Private HBCUs $25,000 $170,500 $110,000

New loans to Public HBCUs 195,700 170,500 110,000

Total new loan volum e 222,700 341,000 220,000

Total number of loans:

Total loans to Private HBCUs 52 54 55

Total loans to Public HBCUs 19 21 23

Total number of l oans 71 75 78

Total loan awards:

Total loans to Private HBCUs $1,595,662 $1,766,162 $1,876,162

Total loans to Public HBCUs 936,585 1,107,085 1,217,085

Total outstandi ng aw ards 2,532,247 2,873,247 3,093,247

Total outstanding loan awards:

Total loans to Private HBCUs $1,377,697 $1,519,247 $1,590,649

Total loans to Public HBCUs 808,649 891,733 933,642

Total outstandi ng aw ards 2,186,346 2,410,980 2,524,291
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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 Federal resources provided for the program as well as the resources 

and efforts invested by those served by the 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

2016 70% 44%

2017 70 75

2018 70 48

2019 70

2020 70

2021 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' (NCES) 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

2016 14% 33%

2017 14 29

2018 14 29

2019 14 20

2020 14

2021 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 Designated Bonding Authority (DBA) in 

administering the program. 

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

2016 70% 58%

2017 71 57

2018 71 60

2019 71

2020 71

2021

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 maintained by NCES.