- Associated Press - Wednesday, June 1, 2016

COLUMBIA, S.C. (AP) - The Legislature has approved freeing South Carolina State University from $12 million in state loans and set up a 16-year repayment schedule on a separate, $6 million loan.

The resolution approved Wednesday by the House formalizes the terms agreed to last week by a legislative panel negotiating the state budget. The Senate approved the resolution Tuesday.

It forgives $8 million next fiscal year, then $2 million each in the following two years.

Lawmakers believe the loan forgiveness will help the state’s only public historically black university keep its accreditation.

The Southern Association of Colleges and Schools will decide the fate later this month of the 120-year-old college in Orangeburg. Following years of probation, the college’s accreditation will either be restored or pulled, which would force its closure.

If that happens, the state is responsible for all of the college’s debt, said Ways and Means Chairman Brian White, R-Anderson.

“With this, we have an extremely good shot of saving S.C. State,” he said. “I think if we don’t, it will be devastating. … If it closes, there will be a huge economic impact on the whole state.”

Under the resolution, the $12 million will be forgiven as long as the college maintains its accreditation, continues improving its finances and increases enrollment. The university must make yearly payments of $355,000 until the $6 million is paid off. It has already paid the first installment. Both bailouts were approved by the state’s financial board in 2014.

The Legislature’s budget plan for next fiscal year, also given final approval Wednesday, provides S.C. State an additional one-time payment of $4.6 million to pay off other debt, as well as $2.5 million from lottery profits.

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