Lincoln University of Missouri declared financial exigency last week, announcing publicly that its finances are so strained that typical personnel and operational standards must be abandoned in order to save the school.
To most people, exigency sounds like the school is on the verge of closing. In actuality, the exigency declaration is a tool schools use to get around agreements with labor and faculty unions to implement cost-saving furloughs and layoffs with fewer headaches.
Lincoln’s announcement is not the first in recent years to surface in the HBCU community – LU joins South Carolina State University and Southern University in 2015 and 2011 respectively to declare institutional bankruptcy in the last decade. Both schools faced significant financial hardships, and both survived.
And both institutions are on the list of HBCUs likely to join Lincoln in declaring the status again over the next 12-24 months.
Two things typically comprise why colleges and universities declare exigency — a dramatic decrease in public funding or dramatic decreases in enrollment. When they collide, the result is hemorrhaging in cash reserves or a sudden need to cut programs and workforce.
Lincoln is a prime example of being in the middle of this financial pile-up of institutional misfortunes. Between 2010 and 2018, enrollment dropped from 3,349 students to 2,478.
In 2017, former LU President and current Fisk University President Kevin Rome pleaded publicly for an end to drastic budget cuts in the state, which threatened the very existence of Lincoln and Harris-Stowe State University, Missouri’s other historically black institution.
Last month, a new governor and a new era of financial strife created a new set of proposed cuts for Lincoln to the tune of $1.4 million.
Several HBCUs are in the crosshairs for similar cuts and enrollment concerns.
Historically cash-strapped Louisiana is examining major cuts across the board for all public institutions and has recently sent not-so-covert signals that the world’s only historically black flagship system could be among the early and most notable casualties. From the Advocate:
(Southern University System President Ray) Belton said as unemployment rates are rising, the Southern System has heard feedback from several families of students who say “they simply do not have the resources for their students to return to college.”
Belton said the Southern System could expect potentially a 15% drop in enrollment in the coming academic year.
If enrollment drops, tuition revenue drops, and, since tuition prices make up the majority of school budgets, the results could be challenging.
South Carolina State University
Two years ago, the State of South Carolina limited public institutions from aggressively enrolling out-of-state students in the name of preserving opportunities for in-state learners. That policy stood to kill SCSU without a pandemic, and with it, threatens its outright existence. From the Greenville News:
With declining enrollment, revenue losses from shuttered campuses and state funding that has yet to catch up to 2007 levels even before accounting for inflation, some colleges could be looking at the beginning of the end.
“Even just a month of this could exceed $100 million in losses, and those are staggering numbers,” said state Sen. Vincent Sheheen, D-Kershaw. “Some of our universities are not in a position to weather that for very long. We could lose universities if the state doesn’t step up to help them.”
All Georgia Public HBCUs
Albany State University, Fort Valley State University, and Savannah State University have all felt the pain of direct or proximate school consolidations, which even when factoring the combined individual enrollments of ASU and Darton State College before its 2017 consolidation, dropped enrollment at each school between 5-10% between 2013 and 2018.
For some HBCUs like Cheyney University, the difference between operating and closing is simply up to the whims of state lawmakers and the political calculations of finding money for poor black colleges where none exists. From WHYY in Pennsylvania:
The state system has struggled to enroll students in recent years, with all but one school — West Chester University — reporting a decline in enrollment since the peak in 2010. Cheyney, Clarion, Edinboro, Lock Haven, and Mansfield Universities are among those that have struggled most, with Cheyney’s enrollment dropping to only 618 students for this academic year.
Gov. Tom Wolf promised last year that Pennsylvania would foot the bill for Cheyney’s $40 million debt to save the United States’ first historically black university from closure.
Elizabeth City State University
While the University of North Carolina System has offered protection over funding for ECSU’s critical capital projects and its NC Promise funding, enrollment will still pose a major challenge to the institution. The school remains a ways off from its 2010 enrollment mark of more than 3,300 students, with 1,677 accounted for in 2018.
Program duplication efforts and spikes in COVID-19 infection rates in the region will create substantial harm to ECSU’s enrollment outreach fortunes, and one bad year might be all the system needs to suggest that even reduced tuition through NC Promise cannot save a struggling HBCU.
Ultimately, all HBCUs will face financial hardship due to student rebates, technology and facility upgrades to deal with social distancing requirements, and pressures for states calling for reopening in the midst of health concerns.
Some HBCUs, mostly the private colleges and universities, will not publicly disclose their financial issues but will likely shutter suddenly unless the federal government does a sweeping, sector-wide round of loan deferments and cancellations and emergency unrestricted appropriations to cover costs for at least the next two years.
A big number of the nation’s HBCUs were on the ropes before the coronavirus pandemic. Are the statistics and the numbers the early makings of a technical knockout?