Dillard Notables of 2018: #1 Loan Forgiveness

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The biggest notable from 2018 has to be the forgiveness of the Katrina loan. I think we often forget how long Dillard has had to deal with Katrina and its after effects. The storm happens in August of 2005. The campus is uninhabitable for an entire year. I learned from my colleagues at other institutions when I arrived in 2012 that Dillard clearly had the most significant damage.

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Slide explaining Katrina loan from presentation to alums during my 2012–13 Bleu Pride Rising Tour

During my first year I toured the country to visit with alumni, hitting 17 cities. One of the items I wanted to explain was the Katrina loan. The other thing I heard from everyone was that it was supposed to have been a grant. But the documents clearly indicated we had a loan which we had to start repaying in 2010. I had heard about a 1% rate but when I dug deeper I saw a payment schedule that was unreasonable. I shared this slide with alums so they would know too. If we were currently under this plan we would owe the government almost 20% of our annual revenue.

So in the spring, working closely with the late Deb Saunders White who was with the Department of Education but started as chancellor of NCCU in 2013. The new deal gave us five years to strengthen our operations and enrollment and then a new payment arrangement of not more than 6% of operating expenses would begin in 2018. While still a significant undertaking, this new deal was much more realistic than trying to operate with 25% less of normal operating expenses. Former Senator Mary Landrieu was KEY in helping to get this passed through Congress as it was part of a broader package of aid for southeastern Louisiana.

That move was timely, because in the fall of 2011 the Department of Education changed the rule for awarding Parent PLUS loans. While we didn’t feel it right away, by the fall of 2013 we saw about a 130 student drop in enrollment.

It was also important because in 2011 Congress changed the rules about summer Pell, which effectively ended the program. So now you have two major changes which damaged our ability to pay back the loan, so the new deal was right on time.

But that was never the ultimate goal. Complete forgiveness was. I chronicled the process in an earlier blog post as the Katrina loan has been something I have worked on for my entire time at Dillard.

Having over $150M forgiven was the biggest event for Dillard not just last year, but arguably the most important ever. It was even more complicated with the new administration, trying to find balance in this unusual situation. But despite the craziness, in the end the right thing was done- forgive loans that should have been grants due to the nature of the catastrophe.

I hope we never have to experience this again. But I do know that as a nation we need to be much more serious about climate change, because the recent history including hurricanes Harvey, Maria and Florence don’t give me much comfort.

Written by

7th president of Dillard University

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