Department of Education

HISTORICALLY BLACK COLLEGE AND UNIVERSITY

CAPITAL FINANCING PROGRAM ACCOUNT

Fiscal Year 2025 Budget Request

CONTENTS

Page

Appropriations Language ........................................................................................................... 1

Analysis of Language Provisions and Changes.......................................................................... 2

Appropriation, Adjustments, and Transfers ................................................................................ 3

Obligations by Object Classification ........................................................................................... 4

Authorizing Legislation............................................................................................................... 5

Appropriations History................................................................................................................ 6

Activity: 

Federal Administration............................................................................................................7
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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, 2026:

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 

$344,444,444: 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, 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, 

$581,000.5

NOTES 

A full-year 2024 appropriation for this account was not enacted at the time the Budget was prepared; therefore, 

the Budget assumes this account is operating under the Continuing Appropriations Act, 2024 and Other Extensions 

Act (Division A of Public Law 118-15, as amended). The amounts included for 2024 reflect the annualized level 

provided by the continuing resolution.

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. 
HISTORICALLY BLACK COLLEGE AND UNIVERSITY

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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, 2026: 

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:

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 $344,444,444: 

The requested language limits the amount of 

bonds that may be insured under the HBCU 

Capital Financing program to $344 million in 

fiscal year 2025. This is a decrease of nearly

$33 million over 2024. 

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, $581,000.

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 2023 2024 2025

Discretionary: 

Appropriation $20,150 $20,150 $20,150

Mandatory: 

 

 Modification of existing loan subsidies 0 0 0

 Reestimate of existing loan subsidies 62,421 27,551 0

Total, discretionary and mandatory appropriation 82,571 47,101 20,150
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Obligations by Object Classification

(dollars in thousands)

Obj ect Class C ode Object Class

2023

Actual

2024 

Annualized 

CR

2025 

Request

Change 

from 2024 to 

2025

11.10 Full-time permanent $320 $314 $339 $25

11.31 Full-time temporary 0 0 0 0

11.51 Overtime 1 0 1 1

11.52 Awards 12 3 4 1

Compensation subtotal 333 317 344 27

12.00 Benefits 127 119 121 2

Comp/benefits subtotal 460 436 465 29

21.00 Travel 12 36 49 13

23.10 Rental payments to GSA 7 9 8 -1

Subtotal Travel/Rent 19 45 57 12

25.21 Other services 0 5 6 1

25.22 Training/tuition contracts 0 0 0 0

25.30 Goods/services from 

Federal sources 3 4 6 2

25.72 IT services/contracts 36 38 47 9

Subtotal 25 39 47 59 12

26.00 Supplies 0 0 0 0

Total, Budget Authority1 518 528 581 53

1 The fiscal year 2023 total reflects actual obligations, not Budget Authority. 
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Authorizing Legislation

(dollars in thousands)

Activity

2024 

Authorized

2024

Annualized CR 

2025 

Authorized

2025

Request

Federal administration (Federal Credit 

Reform Act of 1990, Section 505(e) 

and HEA Title III, Part D) Indefinite $528

To be 

determined $581

Loan subsidy (Federal Credit Reform 

Act of 1990, Section 505(e), and 

HEA Title III, Part D) Indefinite 20,150

To be 

determined 20,150

Loan modification (Federal Credit 

Reform Act of 1990, Section 

505(e), and HEA Title III, Part D) Indefinite 0

 To be 

determined 0

Reestimate of existing loan subsidies 

(Federal Credit Reform Act of 

1990, Section 504(f)) Indefinite 27,551

To be 

determined 0

Total discretionary appropriation 20,678 20,731

Total mandatory appropriation 27,551 0
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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate 

to Congress

House 

Allowance

Senate 

Allowance Appropriation

20161 $19,436 $19,096 $19,096 $20,150

20172 20,112 20,112 20,112 20,112

20183 20,150 30,150 30,150 30,150

20194 40,150 40,150 40,150 40,150

20205 40,150 50,484 40,150 46,150

20216 40,150 48,150 48,150 48,150

20227 20,150 48,150 20,150 22,150

20238 20,150 20,150 20,150 20,150

20249 20,150 20,150 20,150 20,150

2025 20,150

1 The levels for House and Senate allowances reflect action on the regular annual 2016 appropriations. 2 The levels for House and Senate allowances reflect action on the regular annual 2017 appropriations; 

the Appropriation reflects the Consolidated Appropriations Act, 2017.

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

be appropriated for at least three fiscal years.

4 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). 5 The Senate allowance reflects the Chairman’s mark; the Appropriation reflects the Further Consolidated 

Appropriation Act, 2020 (P.L. 116-94). 

6 The Senate allowance reflects the Chairman’s mark; the Appropriation reflects Division H of the

Consolidated Appropriations Act, 2021 (P.L. 116-260).

7 The House allowance reflects floor action on the FY 2022 Consolidated Appropriations Act; the Senate 

allowance reflects the Chairman’s mark; and the Appropriation reflects the Consolidated Appropriations 

Act, 2022 (P.L. 117-103).

8 The House allowance reflects the regular annual FY 2023 appropriation, which was introduced on the 

floor; the Senate allowance reflects the Chairman’s mark; and the Appropriation reflects the Consolidated 

Appropriations Act, 2023 (P.L. 117-328). 9 The House allowance reflects Subcommittee action and the Senate allowance reflects Committee action 

on the regular annual 2024 appropriations bill; the Appropriation reflects the annualized continuing 

resolution level.
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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 2025 Authorization: To be determined1

Budget Authority:

2024 Annualized CR 2025 Request Change 

Federal Administration $528 $581 +$53

Loan subsidy costs 20,150 20,150 0

Total 20,678 20,731 +53

Full-time equivalent employee 2 2 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 

1 The GEPA extension expired September 30, 2015. Reauthorization for FY 2025 is expected through appropriations 

action.
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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 at 

certain HBCUs have affected Federal liability in the program, which are reflected in delinquency 

rate fluctuations and Department estimates. 

Discretionary funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands) 

2020 $46,150

2021 48,150

2022 20,484

2023 20,678

2024 Annualized CR 20,678

FY 2025 BUDGET REQUEST

For fiscal year 2025, the Administration requests $20.7 million for the Historically Black College 

and University (HBCU) Capital Financing Program account, $53,000 more than a fiscal year 

2024 annualized CR based on the fiscal year 2023 appropriation. The request includes 

$581,000 for administrative expenses and $20.2 million for new loan subsidy costs. The fiscal 

year 2024 net downward reestimate of $14.4 million reflects an upward component of +$27.6 

million and a downward component of about -$42.0 million. Reasons for the changes include 

updated economics, the impact of interest payments in newer cohorts, and closing loan cohorts 

that had been discharged. 

The fiscal year 2025 request continues to lift the restrictions in 20 U.S.C. 1066c(a) which 

currently prevent Howard University from accessing the HBCU Capital Financing Program. 

Howard University, similar to all other HBCUs, should have access to low-interest capital 

financing to address its capital needs. 
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The $581,000 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 

$344 million in new loans.

PROGRAM OUTPUT MEASURES

(dollars in thousands)

Output Measures 2023 2024 2025

Number of new loans:

New loans to Private HBCUs 5 5 5

New loans to Public HBCUs 1 3 1

Total new loans 6 8 6

New loan volume:

New loans to Private HBCUs $71,391 $171,992 $152,347

New loans to Public HBCUs $34,563 $171,992 $152,347

Total new loan volum e $105,954 $343,984 $304,693

Total number of loans:

Total loans to Private HBCUs 12 19 19

Total loans to Public HBCUs 6 17 17

Total number of l oans 18 36 36

Total loan awards:

Total loans to Private HBCUs $409,500 $184,000 $250,000

Total loans to Public HBCUs $29,000 $245,000 $75,000

Total outstandi ng aw ards $438,500 $429,000 $325,000

Total outstanding loan awards:

Total loans to Private HBCUs $221,513 $393,505 $545,852

Total loans to Public HBCUs $150,252 $322,244 $474,590

Total outstandi ng aw ards $371,765 $715,749 $1,020,442

PROGRAM PERFORMANCE INFORMATION

Performance Measures

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

goals, objectives, measures, and performance targets and data. Achievement of program 

results is based on the cumulative effect of the resources provided in previous years, and those 

requested in fiscal year 2025 and future years, as well as 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.
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Measure: The percentage of borrowers who increase revenues and investment return annually.

Year Target Actual

2020 70% 67%

2021 70 93

2022 70 13

2023 70 —

2024 70 —

2025 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. Between 2021 and 2022, only 13% of borrowers 

experienced an increase in revenue over the prior year. The decline of revenue for the 

remaining borrowers was largely due to lower investment returns. Fiscal year 2023 performance 

data is expected to be available in December 2024 and will be included in the fiscal year 2026 

Congressional Justification. The data source for total revenues is the National Center for 

Educational Statistics' (NCES) Integrated Postsecondary Education Data System. 

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.
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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

2020 71% 65%

2021 71 72

2022 71 70

2023 71 —

2024 71 —

2025 71 —

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. Fiscal year 2023 performance data is expected to be 

available in July 2024 and will be included in the fiscal year 2026 Congressional Justification.

This measure relies on data maintained by NCES.