FROM THE OFFICE OF PUBLIC AFFAIRS

Treasury Secretary Robert E. Rubin and Education Secretary Richard W. Riley today announced that Bethune-Cookman College, Daytona Beach, Fl., has been awarded a $4.8 million loan for theconstruction of a 200-bed dormitory.

The loan was issued under the Education Department’sCapital Financing Program for Historically Black Colleges andUniversities (HBCUs), enacted by Congress in 1992. Throughfederal guarantees for private-sector bond financing, low-costcapital is available to HBCUs for facility repair andconstruction.

"The future of an important and successful institution ismade stronger today," Secretary Rubin said. "This loanis a promise to future students of Bethune-Cookman College thatthey will have the opportunity of higher education."

"For students to learn, they must have safe,well-maintained classrooms, laboratories, and living areas. Thisloan program generates seed money to help historically blackcolleges like Bethune-Cookman make needed improvements they mightotherwise have to do without," Secretary Riley said.

The Education Department guaranteed payment of bonds purchasedby Treasury’s Federal Financing Bank to fund this loan, thesecond issued under this program. In September 1996, WestVirginia State College was issued a $3.5 million loan. Thesecretary of education has the authority to issue letters ofcredit and insurance up to $375 million.

The Bethune-Cookman loan is a 30-year term at an averageinterest rate of 75 basis points over Treasury rates. ThroughTreasury’s Federal Financing Bank, this loan includesseveral new financing features designed to protect the borroweragainst interest rate fluctuations during the dormitory’s14-month construction period.