NC HBCUs struggle with finances, enrollment

A scathing financial audit and a tumultuous change in leadership were not deterrents for Shaw. His stepfather, Reginald Towns, has worked at St. Augustine’s since 2007, and his mother, Angela Towns, earned her bachelor’s degree through the school’s Gateway Lifelong Learning Program in 2002.

“Things happen,” said Shaw, 20, a freshman. “You can’t really judge the school for certain things that happen. I feel like things are going to turn around for the school, hopefully within the next year or two or three.”

Administrators at many historically black colleges and universities across the country are working to recruit more students like Shaw – who see value in the rich tradition of HBCUs – while struggling with dwindling resources and ongoing troubles that threaten their schools' very existence.

Continuing enrollment declines have led to tuition revenue losses in the millions for North Carolina’s HBCUs, forcing them to fight for survival.

Overall, fall full-time student enrollment fell 7 percent between 2010 and 2013, according to the most recent numbers from the U.S. Department of Education. This comes after enrollment increased 12 percent between 2004 and 2009.

For one university, it also placed them in the crosshairs of legislators.

Lawmakers created a budget provision last year to study closing Elizabeth City State University, where student enrollment fell 27 percent since 2010 – the steepest drop among all North Carolina public universities. Opposition from black lawmakers and community leaders in Elizabeth City led to the provision’s removal.

HBCUs often accept students from low-income backgrounds, or who are not academically prepared for college, in hopes of nurturing them into productive adults.

But the tightening of credit requirements for federal loans, along with increased academic standards for University of North Carolina System schools, have contributed to enrollment declines at public black colleges in the state.

Private HBCUs haven’t fared much better. Shaw University, which was $20 million in debt, was bolstered by a $31 million federal loan in 2009. But enrollment fell 24 percent at the Raleigh school between 2010 and 2013, the second-steepest decline among all North Carolina HBCUs.

While talking about his own school, Rodney Gaddy, chairman of St. Augustine’s board of trustees, described the nationwide HBCU situation as “precarious.”

Despite St. Augustine’s troubles, Adrian Shaw is very optimistic about his school’s future.

After a few months on campus, Shaw described the vibe among students as “very positive” and “upbeat.”

The optimism was a welcome change for the private university after a turbulent start to 2014.

In January, St. Aug’s was required to pay overtime to current and former employees after the U.S. Department of Labor found it failed to do so. In February, an audit detailed the university’s financial troubles, including a contractor suing for money owed for work on the school’s unfinished football stadium.

St. Aug’s troubles shocked and disappointed many alumni, said Patty Jackson-Brown, the school’s alumni association president.

"If we had been knowledgeable of some of the things that were going on, and had perhaps some input, I believe the outcome could have been different,” she said. “But we didn't have any input. We found out about it when it was published. That was not good for us. Supporting the university the way we had supported the university, we felt we should have known what was going on. We were denied that, and that did not sit well with us."

Last year, the U.S. Department of Education began investigating an allegation that St. Aug's provided false information on a federal grant proposal. The department last week would not comment on whether the investigation has been resolved.

The Southern Association of Colleges and Schools, which accredits the university, also has requested information regarding the school’s finances.

Even with the challenges, St. Augustine’s surpassed its goal of 1,000 new students for the fall, university officials said. The school did not disclose its fall enrollment numbers.

“I believe good things are going to happen for this school,” said Shaw, the student.

Sharing his optimism is Everett Ward, the school’s interim president.

As a toddler growing up in Raleigh’s Biltmore Hills neighborhood, Ward remembers his grandmother’s stories about how his great uncle paid off his St. Augustine’s tuition by helping build the former St. Agnes Hospital, which was owned by the school. Ward was later born in the facility.

His father, William Henry “Bone” Ward, attended the school and played on the basketball team. After graduation, he started a concrete business and poured many of the school’s sidewalks.

Everett Ward enrolled at the school in 1977, following his sister, then a St. Augustine’s senior. He became freshman class president, met his wife, Cassandra, and was mentored by Prezell R. Robinson, St. Augustine’s president at the time, and James Alexander Boyer, a professor who also became school president.

Now leading his alma mater, Ward says his school is being revitalized.

“We believe that the renaissance is here,” he said. “And if you study the period of a renaissance, it’s a long period. But you keep growing and you keep producing, and that’s what we’re going to do here at St. Augustine’s.”

The university has also streamlined its academic focus into four areas – mass communications and journalism, STEM (science, technology, engineering and math), criminal justice and public health.

But Ward is also thinking long term. Along with new academic buildings and a larger convocation facility, he wants to revive St. Agnes as a public health center. Founded in 1896, the facility grew into the largest medical center for African-Americans between Washington, D.C., and Atlanta. It closed in 1961 after the Wake County Medical Center, now WakeMed, opened.

A partnership between Coldwell Banker Commercial Trademark Properties, Rex Healthcare and St. Augustine’s to revitalize St. Agnes was announced in 2012, but the project’s partners later decided to wait until the university was financially stable.

An announcement is expected on the project within the next few months, said Ward, who didn’t offer specifics. A weed-filled stone shell of the former hospital currently stands adjacent to the university, but the land surrounding the building has been cleared recently.

“To sit on my grandmother’s knee and to hear her talk about how St. Augustine’s, and that opportunity for her brother, transformed our family, and what a quality education meant for all of us for future generations – to see that hospital active again would mean more to me personally than anyone can imagine,” he said.

Jackson-Brown, the alumni association president, said many of the organization’s 700-plus members want Ward to become the school’s permanent leader.

Ward has been more inclusive of alumni, even creating a special committee of alums to get their feedback regarding the university, she said.

Ward hasn’t decided whether to stay after his contract expires in October, but he said, “I will do whatever is necessary for the betterment of St. Augustine’s.”

Shaw hopes Ward, who has become a mentor to him, stays on at the school. They talk two or three times a week, he said.

“It gives me a sense of enlightenment knowing I have a president who cares about my education and who wants to see me do well in life and do anything it takes to help me reach my goals,” he said. “It make me feel empowered and motivated. We speak on a personal level as opposed to a student-principal relationship.”

St. Augustine’s, like most North Carolina HBCUs, is recovering from serious enrollment declines.

Between 2010 and 2013, fall full-time student enrollment increased at only three of the state's 11 HBCUs – Fayetteville State University (7 percent), Johnson C. Smith University in Charlotte (4 percent) and Livingstone College in Salisbury (2 percent), according to current numbers from the U.S. Department of Education.

North Carolina A&T State University in Greensboro (-2 percent) and North Carolina Central University in Durham (-6 percent) are the only HBCUs whose enrollment declines didn’t reach double digits, according to federal numbers.

North Carolina’s other HBCUs fared worse: Bennett College in Greensboro (-13 percent); St. Augustine’s (-14 percent); Winston-Salem State University (-15 percent); Shaw University (-24 percent); and Elizabeth City State University (-27 percent).

Federal enrollment data was not available for Barber-Scotia College in Concord because the school lost its accreditation in 2004 after failing to provide accurate information to accreditation officials. Unaccredited schools cannot receive federal financial aid funds.

After credit requirements were tightened for federal Parent PLUS loans in 2011, the number of students attending HBCUs with these loans dropped 45 percent the following year, according to the United Negro College Fund, which provides scholarships to students at 37 HBCUs nationwide, including St. Augustine’s.

The changes were made because many of the loans were in default, said Marybeth Gasman, director of the Penn Center for Minority-Serving Institutions at the University of Pennsylvania, which advocates for HBCUs.

“The problem is that no one gave higher education a heads up that those changes were coming so that they can plan,” she said. “So, HBCUs really couldn’t plan for those changes, which put them in a really difficult position.”

HBCUs, like most small colleges and universities, have difficulty recovering from large student declines due to their small endowments, and that leaves them heavily dependent on tuition dollars, said Richard Kent Vedder, an economics professor at Ohio University who believes HBCUs need to change how they operate.

“The stronger HBCUs – Morehouse and Spelman, Howard – they probably will survive and do reasonably well,” he said. “Unfortunately, there’s a disproportionate number of them that are in the category of low graduation rates, low endowments, limited alumni support, limited state support, that are really going to have to merge with other schools or go out of business or radically change their model. And whether that works or not, I don’t know.”

On average, the full-time student retention rate for North Carolina HBCUs remained above 50 percent between 2010 and 2013, but graduation rates during that span were far lower, according to federal numbers.

At 27 percent, Livingstone College’s average graduation rate ranked the lowest. St. Augustine’s was second from the bottom at 28 percent; Shaw was at 29 percent.

Despite its enrollment woes, Elizabeth City’s 43 percent graduation rate ranked the best among the state’s HBCUs.

When compared against North Carolina HBCUs, graduation rates for a sample of similarly sized schools nationwide were higher by about 8 percent, according to federal data.

HBCUs’ low graduation rates are directly tied to accepting students who are not prepared for college work, but taking in these students is needed, Gasman said.

“Is North Carolina State University or UNC going to take in those students,” she asked. “Where do those students go? Do we not want to educate them? Do we just save education for the middle class and the upper income students? Sometimes I think people, that’s what they want to do. They just want to give opportunities to people who already have them.”

But maintaining schools with low graduation rates and declining enrollment isn’t fiscally sound, Vedder said.

“In many ways (HBCUs) were noble institutions, attempting to provide an education to a group of society that was basically under-represented in higher education,” he said. “Whether that justifies in providing perpetual funding, it seems to me that this probably needs to be looked at on a case-by-case basis. As a school with a graduation rate of less than 30 percent, you might ask the question, is it right to send kids to a school for four, five, six years and some don’t get a degree? Are we enhancing their misery and reducing their status?”

Gasman argues HBCUs are worth keeping, especially in light of grand jury decisions in Ferguson, Mo., and Staten Island, N.Y., last year not to indict two white officers in the deaths of black men whom police were attempting to detain.

“Oddly enough, HBCUs are probably more relevant right now, given the way that many African-Americans are being treated,” she said. “I think majority institutions, there are a lot of them that do a very good job, but I do know that sometimes African-Americans feel that they’re in a hostile environment at some majority institutions.”

Some may describe HBCUs as being financially poor, but Gasman said they have “immense human resources.”

“I think that really makes a difference,” she said.

But to survive, HBCUs need to reinvent themselves, Vedder said.

“Why aren’t you broadening your scope to make a bigger attempt to get other students?” he asked. “White students, Asian students, Hispanic students, first generational college students of other races, as a way to expand their pool?”

Ashley Lewis wanted to attend a North Carolina HBCU, but didn’t want to follow her high school classmates.

The Myrtle Beach, S.C., native chose Elizabeth City State University after an uncle who attended the school suggested the institution to her.

“The experience. Just being around people, it made me feel comfortable because my high school…it was a (majority) white school and I felt out of place,” she said. “So, it’s kind of like coming home.”

By fall 2013, enrollment fell by 457 students, dropping the school from its enrollment peak of 3,307 in 2010 to 2,421.

The decline was noticeable on campus.

“When I first came in 2009, all the dorms were open and it was an overflow, so they had to place students in a hotel a couple of blocks away,” said Lewis, who transferred to Fayetteville State University, another HBCU, in 2013 to be closer to her son. “It seemed like every year, another dorm was closing down. And now it’s to the point that four dorms are closed and all because there aren’t enough students.”

In May 2014, a provision added to the Senate version of the state budget called for the UNC System to study “the feasibility of dissolving any constituent institution whose fall full-time equivalent student enrollment declined by more than 20 percent between the 2010-2011 fiscal year and the 2013-2014 fiscal year” and to develop a plan for its dissolution.

ECSU, with a 27 percent enrollment drop during that span, was the only school fitting the provision.

Gasman described the measure as “systematic racism.”

“It’s interesting because no one ever says let’s cut a historically white institution,” she said. “To me, all I can think of is why is it that whenever we want to save money, we cut out the black folks? It doesn’t make any sense to me.”

Sen. Jerry Tillman, R-Randolph, chairman of the Senate Education Committee, said the provision had nothing to do with race.

“Any time you have operations that seem inefficient, that comes up all the time in budget discussions,” he said. “That was an example of what came up. That’s exactly what happened. We said let’s take a look at ECSU. It may be able to combine programs. Give us a study, show us what you can do to make it efficient.”

Former Rep. Annie Mobley, D-Hertford, a 1963 ECSU graduate whose district included the university, wasn’t surprised by the provision. For years, legislators talked about closing the school, she said.

“It’ll probably be right back on the chopping block again next year,” said Mobley, whose term ended in December after she lost a May primary. She said it’s important for black lawmakers to “remain sensitive to what the climate is for possibly any kind of closure not only to Elizabeth City but other HBCUs, because it’s my thought that they are going to be picked off one at a time until they get it specifically like they want it.”

ECSU's campus police scandal led to the resignation of campus police chief Sam Beamon, who was later charged by the State Bureau of Investigation with willful failure to discharge his duties, and the retirement of Chancellor Willie Gilchrist.

Beamon pleaded no contest to the charge, but was found guilty by a judge in November, according to media reports. Beamon had his 45-day prison sentence suspended, was placed on probation for a year and ordered to complete community service.

Stacey Franklin Jones, 53, has a 10-page resume highlighting a well-defined career at engineering firms and through academia, including roles as senior vice president at Benedict College in South Carolina and provost and vice president for academic affairs at Bowie State University in Maryland.

But at those schools, Jones’ academic decisions have been questioned. At Benedict, she fired two professors for not following a controversial student grading policy that allowed effort to make up half of a student’s grade. The firings led to questions regarding professors’ academic freedom, according to news reports.

Jones received a vote of ‘no-confidence’ by Bowie State faculty – three months into her job – after professors said they were being excluded from administrative and academic changes at the school. She left Bowie State the following month.

WRAL made multiple attempts to interview Jones since her confirmation in September. The university has cited scheduling conflicts regarding her unavailability.

UNC System President Thomas Ross described her as a strategic thinker, engaged, resourceful, innovative and accessible.

“She brings to the role of chancellor a rare blend of leadership, experience in higher education, industry and government, as well as a practical understanding of how to guide institutions through serious challenges, whether academic or financial in nature,” he said.

In a September news conference announcing her confirmation, Jones described ECSU as a potential model for other schools.

“I see opportunity. Yes, there are challenges, but there are challenges with any institution and for different reasons,” she said. “I see much more potential than I do challenges in Elizabeth City State University. And the time in terms of what’s happening around the country in having models of affordable academic success universities, I think Elizabeth City State University is the perfect place and this is the perfect time to create a model.”

Jones outlined the school’s ‘rightsizing’ efforts to lawmakers during a Joint Legislative Education Oversight Committee meeting in October, including:

Jones also outlined the school’s success plan to lawmakers, which includes re-branding, “strategic enrollment management,” becoming regionally relevant and working on campus organization.

Tillman, the legislative committee chairman, attended the October meeting and said he has a "wait-and-see" approach toward ECSU’s efforts.

“They had some good plans that they were going to implement, including combining programs,” he said. “They gave me a lot of interim steps they can take, so I just want to see how they’ll make this work. How they spend taxpayer money? That’s what I’m interested in.”