Loan With 24% Interest Is ‘Necessary Evil’ for Black College to Stay Afloat
- Saint Augustine’s in Raleigh faced millions in liabilities
- Venture loan is unusual step for higher education institutions
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A controversial, high interest-rate loan is helping one of the oldest historically Black colleges in the country, Saint Augustine’s University, stay afloat – for now.
After struggling for years to maintain steady enrollment, the Raleigh, North Carolina-based school was running out of options. The college, facing millions in liabilities, owed money to its employees and was missing two years of audited financial reports. So when Gothic Ventures, a little known investment firm, approached the college with a $7 million loan, school officials described the offer as a “big win.”