Chandler used the savings realized from his reorganization of government to eliminate the state's budget deficit and to pay off most of the state's debt. That brought about further savings by eliminating debt service costs, which were applied to improvements in the state's infrastructure and educational institutions. Chandler allocated funds for free textbooks for the state's school children, created a teacher's pension fund, and provided extensive funding for the state's colleges and universities. Because segregation prevented blacks from attending graduate school in the state, Chandler secured an allocation of $5,000 annually to help blacks attend out-of-state graduate schools. He stopped short of desegregating the state's universities, however, and told a group of black and white educators that "it is not wise to educate the white and colored in the same school in the South. It is not prepared for it yet."