Institutions of Higher Education (IHEs) designated by the Secretary of Education as Historically Black Colleges and Universities (HBCUs) established prior to 1964 are eligible to borrow from this program. The criteria used to assess the credit of program applicants is further discussed below.
HBCU Capital Financing Program Credit Criteria
The criteria used to evaluate the creditworthiness of borrowers under the HBCU Capital Financing Program are largely based on the standard criteria employed by the three major rating agencies, Moody’s, Standard & Poor’s and Fitch, in evaluating the creditworthiness of higher education institutions. There are significant distinctions between typical HBCU borrowers, however, and higher education borrowers generally, including borrower enrollment demographics, borrower assets, existing debt obligations and capital requirements.
Borrowers under the HBCU Capital Financing Program typically fall into one of two groups, private or public. Private, not-for-profit institutions are those HBCUs that were founded or sponsored by religious institutions, such as the United Methodist Church, the Presbyterian Church USA or the United Church of Christ. Public institutions are those that were formed in response to legal restrictions that barred access by African Americans to public (and some private) institutions of higher education.
The relevance of these two distinct groups in the credit evaluation process is that the asset base of public institutions is owned by and is the liability of state governments, while the private, not-for-profit institutions, though created under church sponsorship, were left to operate independently and raise assets of their own. As a consequence, the publicly owned and operated HBCU institutions, while inherently less of a credit risk, are nevertheless limited in their capacity to compete for funding due to the lack of a level playing field in the public credit environment.
Review the credit criteria page for more information on the specific criteria used to evaluate applicant creditworthiness. Much as they are at the major rating agencies, credit criteria under the HBCU Capital Financing Program are organized into broad categories. The actual credit review must be conducted in accordance with Article 5 of the Agreement to Insure and as directed by the Executive Director of the HBCU Capital Financing Program.
Submitting an Application
Once you are ready to move forward with the process, click on the loan application page to get started. Rice Capital Access Program bankers will review your submission and respond within 2-3 business days to discuss your application and review the next steps.