By Adam Kissel
December 6, 2019 4:55 PM
A lack of accountability means that mismanaged institutions repeatedly get bailed out.
The federal government shovels hundreds of millions of dollars per year to America’s 100 historically black colleges and universities (HBCUs), with minimal accountability. Congress is poised to keep the shovel going full steam, and presidential candidates Bernie Sanders (Vt.) and Cory Booker (N.J.) want America to give these institutions as much as $100 billion more. While some HBCUs have modernized their operations and are succeeding, many others that are failing are lobbying for handouts — and Congress has already rewarded the worst performers with loan deferment and forgiveness. Congress should stop giving out so much free money, let failing colleges fail, and showcase the ones that successfully compete.
Knoxville College has asked the city for 30 days to secure part of McKee Hall, the unoccupied and decaying old administrative building on campus.
City of Knoxville spokesman Eric Vreeland told WBIR on Wednesday the college wants to put in place "a more permanent barrier that will secure the McKee Building, related to the west side of the building, where the upper wall is failing."
The city agreed to grant that request. It was due Wednesday to conduct a follow-up inspection of McKee after issuing notice last month that the college needed to quickly fix parts of the back of the building.
Let’s look at the biggest number first. Senator Booker hopes to throw $100 billion at HBCUs and minority-serving institutions (MSIs) in general. Under his plan, he would transform HBCUs into social-activist organizations in “the fight against climate change,” though it remains unclear why being historically black makes them particularly well qualified for this task.
This plan eclipses the spending idea of Senator Sanders, who wants to throw only $15 billion at HBCUs, forgive another billion or two of debt, and double current funding under the Strengthening HBCUs program of Title III of the Higher Education Act of 1965.
The city of Knoxville is warning Knoxville College if it doesn't act this month to secure McKee that the city will move to secure the building by doing things such as having a fence erected around it and boarding up the problem areas.
Costs incurred by the city are the responsibility of the college, according to the city.
"If payment is not received within 60 days, a lien will be filed with the Knox County Register of Deeds and placed on the city tax rolls against the property," the Feb. 26 warning letter states.
Last year the city sent a $400,000 invoice for work to secure the nine buildings on campus. Because of non-payment, Vreeland said a lien is now in force for that cost.
The college switched some years ago to offering online classes only. Leaders have said they retain their goal of regaining accreditation, something the college hasn't had since the late 1990s. A lack of money has made it harder for the college to make progress.
This year marks the 150th anniversary of Knoxville College's creation.
Here’s what we’re already spending on HBCUs under Title III. In 2019 Congress gave these 101 institutions $282 million, plus $79 million in “mandatory” money (for which the institutions need to do little but fill out a form), plus $73 million for Historically Black Graduate Institutions (including law and medical schools), plus $9 million for master’s-degree programs. Doubling this amount gives them $443 million more, or an extra $4.43 billion over ten years.
In 2019, Congress also offered $40 million in loan subsidies that are uniquely available to HBCUs. This number represents another entirely undeserved windfall. This loan program, the HBCU Capital Financing Program, had been required by Congress in 2018 to forgive or defer hundreds of millions in loans to HBCUs, including those that had the full ability to pay. Here’s how it went: In 2013, four HBCUs were still paying off debt in this program due to loans given in the aftermath of the 2005 hurricanes Katrina and Rita, so they got five-year deferments, with the resumed payments based on ability to pay. No matter; in 2018 Congress offered what came to $322 million to fully forgive the loans.
The only bright spot is the HBCU Capital Financing Program’s work to ensure, prior to closing a loan, that an HBCU is financially sound enough to pay back its loan. It is true that the program did not predict the mismanagement by some of the HBCUs, but it calculates such risks in the same way that a regular bank would. Anyway, if Sanders gets his way, all of this debt will just be canceled.
Mismanagement on the part of the worst-performing HBCUs, however, should be considered alongside the high quality of those that have successfully reinvented themselves or maintained sound financial footing. In Texas, for example, Paul Quinn College has done so well in preparing graduates for the workforce that its model earned a $1 million private-sector grant from Strada Education Network in 2018 to expand. While other colleges sought handouts for being badly run, Paul Quinn earned respect and money by being great.
Furthermore, now that the $79 million in “mandatory” money has expired after a decade, the HBCU lobby is clamoring for that allocation to be made permanent. In fact, these millions are just part of $255 million in mandatory funding to MSIs under the same law. The U.S. Senate has voted to keep the free cash flowing, but there is still time to stop it in the House.
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