A plan that forgives $12 million in loans to South Carolina State University will take effect next month.
The resolution approved by the House on Wednesday is meant to help bolster SC State’s finances as the school’s accreditation is up for review this month. The Southern Association of Colleges and Schools will decide whether to take SC State off probation or pull its accreditation entirely. School officials admit a loss of accreditation would almost certainly shut down the the state’s only public historically-black college.
SC State would still repay a separate $6 million loan over the next 16 years. Both were made by state officials to help SC State close a $23.5 million budget deficit. State Rep. Brian White, R-Anderson, tried to reassure opponents of the loan forgiveness by noting the school has turned its budget around in the past two years.
But he also warned the state government would lose out on both loans entirely if SC State loses its accreditation and is forced to close. “While some of you may disagree with the fact that you’re going to have to do some debt forgiveness, I can tell you if they don’t get accreditation you’re going to be forgiving 100 percent of the debt,” he said during debate on the bill Wednesday.
The vote comes after the plan was included in the state budget, which the House also passed on Wednesday.
The House overwhelmingly sided with SC State 111-2, but conservative senators were uncomfortable with how much money had been written off and passed it by a narrower 27-13 margin.
Because the legislation is a joint resolution and not a bill, the governor’s signature is not necessary.