A 24% Loan Is ‘Necessary Evil’ for Black School to Stay Open (1)

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.”

Agreeing to the lifeline means Saint Augustine’s is now on the ...