Program Overview

HBCU Capital Financing Program

About the Historically Black College and University (HBCU) Capital Financing Program

  • Provides financing for capital projects at the lowest cost of borrowing available in today’s challenging credit environment.
  • Through a pooled escrow, the Department of Education guarantees repayment of principal and interest for each HBCU loan.
  • Typically, loans range from $10 to $20 million, but may be larger.


The primary goal of the HBCU Capital Financing Program is to provide the nation’s HBCUs low-cost capital for the financing of infrastructure improvements. Specifically, the program provides HBCUs with access to capital financing or refinancing for the repair, renovation, and construction of classrooms, libraries, laboratories, dormitories, instructional equipment, and research instrumentation.


There are many benefits to choosing the HBCU Capital Financing Program over traditional funding sources, including:

  • Significant net present value savings
  • Less stringent collateral requirements, particularly for outstanding debt being refinanced
  • More flexibility when additional borrowing is needed from other sources
  • Program administrators who understand the unique needs and constraints of HBCUs


To issue traditional bonds, an HBCU institution would first need to identify a bond issuer, would most likely need to seek credit enhancements from the private sector, and would ultimately have to find investors. Under the HBCU Capital Financing Program, Rice is the issuer, all principal and interest is guaranteed to be repaid by the U.S. Department of Education, and the sole investor is the U.S. Treasury. The loan interest rate is typically a small spread over the corresponding Treasury security yield and is tailored to the project’s anticipated useful life.


According to the U.S. Department of Education, any Historically Black College or University that was established prior to 1964 whose principal mission was and is the education of Black Americans is eligible to borrow from the HBCU Capital Financing Program.  Rice Capital Access Program, as the Designated Bonding Authority for the U.S. Department of Education, works with schools to qualify projects and determine if the school has the necessary credit standing to qualify for a loan.

More on qualifying >>


HBCU loan proceeds can be used for the repair, renovation, or, in exceptional circumstances, the construction or acquisition of:

  • Any classroom facility, library, laboratory facility, dormitory (including dining facilities) or other facility customarily used by colleges and universities for instructional or research purposes or for housing students, faculty, and staff;
  • A facility for the administration of an educational program, or a student center or student union, except that not more than five percent of the loan proceeds provided under this part may be used for the facility, center, or union if the facility, center, or union is owned, leased, managed, or operated by a private business that, in return for such use, makes a payment to the eligible institution;
  • instructional equipment technology, research instrumentation, and any capital equipment or fixture related to facilities;
  • A maintenance, storage, or utility facility that is essential to the operation of a facility, a library, a dormitory, equipment, instrumentation, a fixture, real property, or an interest therein;
  • A facility designed to provide primarily outpatient health care for students or faculty;
  • Physical infrastructure essential to support the projects authorized by the program, including roads, sewer and drainage systems, and water, power, lighting, telecommunications, and other utilities;
  • Any other facility, equipment, or fixture which is essential to maintaining the accreditation of the member institution by an accrediting agency or association recognized by the Secretary.


In addition to the materials found on this website, you may also wish to review the Frequently Asked Questions found on the U.S. Department of Education’s website for the HBCU Capital Financing Program.