During the 116th Congress, education and access to education remain issues of extreme importance. Our Nation needs a workforce that is more competitive than ever, and that workforce must be diverse. The 101 Historically Black Colleges and Universities (HBCUs) and our Predominantly Black Institutions (PBIs) offer that diversity to our Nation and they also offer the best value for a college degree to our citizens, with tuition rates which, on average, are almost 30% less than at comparable institutions of higher education which are not HBCUs. HBCUs educate more students in need, and that makes the investments by Congress in HBCUs that much more impactful and necessary.
Immediate and Permanent Extension the Department of Education’s Title III (SAFRA) Funding for HBCUs. The mandatory funding afforded to HBCUs via the Department of Education’s Strengthening Historically Black Colleges and Universities Program (Title III, Part F of the Higher Education Act) is vital. This mandatory funding (also known as the Student Aid and Fiscal Responsibility Act (SAFRA) funding) is important because the law allows fifteen different ways an institution can be supported, including improving its physical plant and adding to its endowment. Unfortunately, the mandatory funding expired at the conclusion of fiscal year (FY) 2019, and that represents an $85 million financial cliff for HBCUs collectively. During the 116th Congress, we worked with Members of Congress to introduce the [full name] (FUTURE) Act, which extends this mandatory funding for an additional two years. We call on Congress, at the earliest possible date, to extend the mandatory funding for Title III permanently by passing the FUTURE Act.
On February 28, 2017, President Donald Trump issued Executive Order Number 13779 – The White House Initiative to Promote Excellence and Innovation at Historically Black Colleges and Universities. TMCF supports adoption of legislation mandating, which mirrors the order, that each federal agency develop plans for engaging with HBCUs. Following efforts by the TMCF Government Relations team over the course of several months, in February __, 2019, Members from both the U.S. House of Representatives and the U.S. Senate introduced the HBCU PARTNERS Act, which the U.S. Senate passed by unanimous consent shortly thereafter.
HBCUs, like many educational institutions, receive significant funding from the Department of Education. We call on FY 2020 discretionary accounts to receive the funding levels for FY 2020 mirroring authorized levels.
Within Fiscal Years 2018 and 2019, Congress granted private HBCUs the ability to receive deferments on loans obtained through the HBCU Capital Finance Program. During the 116th Congress, TMCF Government Relations requested that Congress offer these same loan modification options to public HBCUs through the FY 2020 Labor, Health and Human Services, Education and Related Agencies (L-HHS-Edu) appropriations bill. The relevant language from that appropriations bill is as follows:
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: 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: 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: Provided farther, That these funds may be used to support loansto public and private Historically Black Colleges and Universities without regard to the limitations within section 344(a) of the HEA. 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 to fund eligible deferment requests submitted for this purpose in fiscal year 2018: Provided farther, That the Secretary shall create and execute an outreach plan to work with States and the Capital FinancingAdvisory Board to improve outreach to States and help additional public Historically Black Colleges and Universities participate in the program.
In both the 115th and 116th Congresses, TMCF Government Relations has advocated for adding the University of the Virgin Islands (UVI), with a hold harmless provision, as a Historically Black Graduate Institution (HBGI) under Title III, Part B, section 326 of the Higher Education Act of 1965. Incorporating UVI within the HBGI Program will assist UVI in establishing a medical school as well as its rebuilding efforts in the wake of the most recent hurricanes which impacted UVI’s campuses.
The New Market Tax Credit Program (“NMTC” or “Program”) helps to expand economic opportunity for underserved persons and communities by incentivizing Community Development Entities (“CDEs”) to make Qualified Low-Income Community Investments (“QLICIs”), such as business loans, in Low-Income Communities (“LICs”). Investors who make investments in CDEs get the benefit of a tax credit against Federal taxes over a seven (7) year period. The total tax credit available is equivalent to 39% of the original amount invested by the CDE in the QLICI. Once the entire tax credit for the QLICI is exhausted, the entire underlying loan is forgiven.
Under the Program, a QLICI can constitute up to 25% of any capital development project in a LIC. Additionally, the Program is applicable for businesses that serve certain “Targeted Populations,” such as Low-Income Persons (“LIP”). Because of how the Program defines LICs and LIPs, many, if not most HBCUs likely qualify to participate in the Program. Consequently, an HBCU using NMTC funds to finance 25% of a capital development project could, ostensibly,expect to have 25% of that cost forgiven after seven (7) years.
Conceptually, an HBCU that was eligible for NMTC and was seeking to fund, for example, the construction of an academic building on campus, could fund 25% of the cost of construction through NMTC and 75% of the cost through the HBCU Capital Finance Program (“CFP”). However, under both NMTC and the CFP, the lender has to have first lien position on the specific capital development project (e.g., a residential hall) as collateral to secure that loan.
The proposed legislation would enable the CFP lender (either the Department of Education or the Designated Bonding Authority) to take a “shared” lien position on any loan that was also partially-funded by NMTC, but only for the seven (7) year period that the NMTC loan was in existence. Alternatively, the legislation would allow CFP to hold a first-position lien on other institutional collateral in order to secure the value of its loan to the institution.
Each February, the President is expected to release a proposed budget outlining the Administration’s funding priorities for each federal agency. Thurgood Marshall College Fund (TMCF) reviews the budget and advocates for our own distinct proposed funding levels for our priority federal programs, many, but not all of which fall within the budgets of the Department of Education or Department of Agriculture. As the budget and appropriations process unfolds, TMCF meets with key Members of Congress and their respective staff to brief them on key policy recommendations and gain their support for our suggested funding levels. We often recommend certain stakeholders to testify as witnesses to the Appropriations committee and sometimes even testify before Congress about policy recommendations. As funding for programs across the federal government shrinks, TMCF continues to engage Congress on budget priorities important to HBCUs. We regularly urge Congress to increase, restore or, at the very least, maintain funding for a variety of programs including financial aid, STEM research, faculty development and specific HBCU accounts. As our nation becomes more diverse, HBCUs continue to educate and prepare the next generation of globally diverse leaders in science and technology, medicine, education, law, and public service. We encourage Congress to invest in HBCUs and the students they serve.
The following programs are vital to HBCUs and their mission to educate African Americans and offer rigorous academic programs that prepare students to be globally competitive in corporate, government, academic and research sectors.
Funding levels for the Title III, Part B programs are critical to enhance and sustain the quality of HBCUs, and to address national challenges associated with global competitiveness, job creation and changing demographics. Title III Part B programs help HBCUs support undergraduate programs and activities. Under the FY 2020 budget, we are working to increase discretionary funding to $375 million (up from $282 million in FY ‘19) and preserve the $85 million in mandatory funding for Title III, Part F programs.
TMCF supports a maximum Pell Grant award of $6,800 (up from $6,195 in FY ’19). This critical, need-based grant program provides critical funding to low-income students who are persisting toward degree completion.
TMCF recommends Congress appropriate $50.5 million for the HBCU Capital Financing Program in the FY 2020 budget. The HBCU Capital Financing Program supports the construction, reconstruction, and renovation of academic facilities at institutions of higher education. Visit the Department of Education to learn more about the HBCU Capital Financing Program
TMCF urges Congress to consider an increase to $65 million in the FY ‘20 budget (up from $______ in FY19). The HBCU/MI program provides access to scientific and technical information products and services to faculty, staff and students of Historically Black Colleges and Universities, American Indian Tribal Colleges and Universities, Native American-Serving Nontribal Institutions, and other minority serving institutions.
TMCF has advocated for the support for the 1890 Education and Facility Programs. There are four programs under this account. These funds are used to strengthen research, extension and teaching in the food and agricultural sciences by building the institutional capacities of the 1890 Institutions, including Tuskegee University.
STEM Education Programs
Investment in STEM education across the federal government is a national security issue. Please see below targeted programs that increase minority participation in STEM education and careers. TMCF has requested that Congress fund these programs at increased levels in the FY 2020 budget.
National Aeronautics and Space Administration (NASA)
● Minority University Research and Education Program
National Oceanic and Atmospheric Administration (NOAA)
● Education Partnership Program/Minority Serving Institutions
National Science Foundation (NSF)
● Alliance for Graduate Education and the Professoriate (AGEP)
● Centers for Research Excellence in Science and Technology (CREST)
● Historically Black Colleges and Universities Undergraduate Program (HBCU-UP)
● Louis Stokes Alliance for Minority Participation (LSAMP)