Reinvestment Fund financing is helping Fisk University in Nashville improve its financial health and long-term stability.
Historically black colleges and universities (HBCUs) have played an important role in providing education to millions of students of color, many of them first-generation college students. More than 75% of students at HBCUs rely on Pell Grants to meet their college expenses. HBCU graduates account for 40% of African American members of Congress, 12.5% of African American CEOs, 40% of African American engineers and 80% of African American judges(1) .
Fisk University is a private, nonprofit, historically black university (HBCU) that was founded in 1866. Located immediately northwest of downtown Nashville, the campus is a historic district listed on the National Register. The university is ranked among the top ten of 105 HBCUs, with a rich history, high academic performance and strong graduate impacts. Fisk was recently ranked as the #3 school for job placement in Tennessee with a 91% placement rate, ahead of Vanderbilt and the University of Tennessee.
Historic disparities in investment due to federal and state policies(2) as well as discrimination in lending practices(3) continue to profoundly impact HBCUs’ access to resources compared to non- HBCUs. HBCU endowments lag behind those of non-HBCUs by at least 70%. The largest portion of operating funds for HBCUs like Fisk come from federal and state resources, which declined significantly between 2003 and 2015. Private HBCUs like Fisk saw federal funding decline by 42% during that period.
As result, HBCUs face significant financial challenges when it comes to operations and capital infrastructure investment. Reinvestment Fund’s loan to Fisk University aims to significantly improve the University’s financial health and long-term stability. Using capital from the CDFI Fund Bond Guarantee Program (BGP), the loan gives Fisk long-term affordable financing, freeing-up cashflow, reducing the number of long-term liabilities, and positioning the university to embark on a larger capital improvement campaign. These steps are important to putting Fisk on solid financial footing.
Fisk’s student body is 70% female and 86% African-American, 5% international students. A significant number of students are the first in their family to attend college and 93% of incoming freshman received some support.
One sixth of Fisk’s incoming students were either valedictorian or salutatorian of their high school. Two seniors were named as Rhodes Scholar finalists in 2019, a first in Fisk’s history. Fisk is also working to be more than an academic institution by providing its students a first step on a career ladder. They are creating academic programs that tie to specific growing fields including homeland security and data sciences and are working with local and national firms in Nashville’s booming commercial sector including Google, Amazon, HCA Healthcare, a large local HMO, and Cravath LLP, a major Nashville law firm.
1) Thurgood Marshall College Fund https://www.tmcf.org/about-us/member-schools/about-hbcus/
2) Public and Private Investments and Divestments in Historically Black Colleges and Universities, https://www.acenet.edu/Documents/ Public-and-Private-Investments-and-Divestments-in-HBCUs.pdf January 2019
3) Black Colleges Have to Pay More for Loans Than Other Schools https://www.theatlantic.com/education/archive/2018/08/black-colleges-loans-racism/568168/