LINDSBORG — Reduced debt and an increase in cash flow will be the result of a $21.2 million loan to Bethany College announced Saturday morning by Sen. Jerry Moran, R-Kan.

“We will continue to see that good things happen at Bethany because of today,” Moran said. “What it means is a $600,000-a-year savings in interest payments and a facility that belongs to Bethany College. It is good news.”

The loan, through the United States Department of Agriculture’s Community Facilities Direct Loan Program, will be used to retire approximately $6 million of debt from 2008 and 2015 bond issues, used for campus improvements and energy savings.

The loan will also allow for the purchase of Bethany’s New Hall, a residential dorm built in August 2015 that houses 240 students. The hall currently is being leased through Crossland Construction, the building’s general contractor.

The 78,500-square-foot residential dormitory also features two classrooms, a laundry facility and wireless Internet.

Huge savings

The loan will have a fixed interest rate of 3.25 percent over 30 years, replacing a number of rates as high as 12 percent currently paid by the college.

Jean Hall, Bethany’s chief financial officer, said the property also will be exempt from property taxes.

“This loan will have an impact on Bethany College for the next 30 years,” Hall said. “This will help secure Bethany’s future.”

Hall said Bethany is still waiting to hear when the closing date will be, but it is anticipated in mid-December. 

"We will make monthly payments over the 30-year period," she said. "The first two years, the payments will be interest only, then principal and interest over the rest of the 30 years."

Bethany President William Jones said the 30-year loan will save the college about $600,000 a year because of the lower interest rate and because there no longer will be lease payments on the residence hall.

“We’ve been challenged financially for nearly a decade. This will help give us the breathing room in our annual operating budget,” he said.

The news comes on the heels of the October announcement of a gift of $3.7 million from the trust of Lindsborg native David J. Nutt. That money will be used to remodel Alm Swenson Hall, Jones said at the time.

18-month process

Bethany college officials, led by Interim President Robert Vogel and President Will Jones, started working on the loan process in May 2016. The school was notified in late August of the loan approval.

The USDA’s Community Facilities Direct Loan Program aims to help small and low-income communities with the purchase, construction or improvement of essential community facilities and related project expenses.

“We often think of the USDA as serving only farmers, but Bethany College is yet another example of the importance of the Farm Bill programs in rural development, and the vital growth of small towns,” Congressman Roger Marshall wrote in a prepared statement. “Continued success and growth of our colleges and universities allows for development and prosperity for the people and places they serve, and the role Bethany College plays in Lindsborg and the Big First (congressional district) is beyond measure.”

With students from 36 states and 25 countries, including the college's largest freshman class ever and an increase of 16 percent in enrollment, Jones said today’s announcement further promotes the university.

“Students from around the country and around the world want what Bethany has to offer,” he said. “For 136 years, we have produced successful professionals who love God and love people. We’re very thrilled with the partnership that helped make this happen today.”