Shaw, St. Aug's confront financial challenges facing HBCUs

Posted February 24, 2014
Updated February 25, 2014

— Three historically black colleges across the U.S. have closed in recent years, and others are being squeezed by rising costs and declining enrollments.

Trustees at Saint Augustine's University in Raleigh were on a conference call Monday afternoon to discuss how to deal with the school's financial challenges.

Rodney Gaddy, chairman of Saint Augustine's Board of Trustees, said tuition revenue is down $3 million this year. The university also owes about $675,000 on its unfinished football stadium, and the contractor has sued to collect the debt.

"There’s a lot of financial issues at the school," senior Dwayne Hyman said. "There’s a lot of speculation and a lot of talk."

Saint Augustine's has eliminated more than a dozen positions and decided Monday to furlough faculty and staff March 9-17 – students are on spring break at that time – to save money, Gaddy said. School leaders also are re-examining everything from relationships with alumni to refinancing certain projects.

"The university is mindful of the domino effect that financial decisions can have on employees and their families and regret that these kinds of adjustments in operational cost are necessary, but like any other business, we continue to stay focused on our mission and vision," President Dianne Boardley Suber said in a statement.

Only last year, the school was considering taking over fellow HBCU Saint Paul’s College in Lawrenceville, Va. The Board of Trustees scrapped the plan, and the Virginia school later closed.

At Shaw University in Raleigh, President Gaddis Faulcon said the school would use the business practice of process optimization to boost efficiency and cut costs.

“It is critical that Shaw University examines and addresses internal challenges and bottlenecks with the calculated next step being process improvement,” Faulcon said in a statement. “We will assess all of our operating procedures and evaluate our past performance to ultimately achieve and exceed improvement goals.”

Shaw also wants to reconnect with the Triangle community, engaging business leaders and building relationships with educational and civic groups to create new partnerships.

"I feel like we can’t lose any of our HBCUs. We need them all," Shaw senior William Askew said.

"We need to really value what we have," Askew said. "In a class, you can have from five to 20 (students). The numbers vary. Either way, you have a closer connection with your teachers."

Ten of the 11 HBCUs in the state saw enrollment drop this year, and budget cuts led Elizabeth City State University to reduce its number of degree programs.

HBCUs historically have smaller endowments and see fewer private donations when compared with other universities. Experts say fundraising will be key in keeping the schools afloat.


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  • joshferrell Mar 3, 2014

    This story is completely different then what was aired this AM several times. A Shaw University faculty member was aired explaining that if you've been getting a check for some time and have a job as an alumni of Shaw then you owe it to Shaw to be feeding money back into the University because ultimately Shaw is who got you that job. I'm just surprised no one asked if Shaw in turn owes those students who graduated from Shaw and can't get a job.

  • Ginger Lynn Feb 25, 2014
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    And look who was president when these changes were made? The law of unintended consequences...
    BTW NCCU had to cut degree programs also

    NCCU alumn 1996

  • Clayton Mack Feb 25, 2014
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    HBCUs were hit hard by the regulations put in place by the Department of Education. They made the approval process for loans through the PLUS program more restrictive and many students got caught being unable to afford school without those loans.

    Nearly every HBCU saw an enrollment decline for the 2013 academic year.

  • Vincent Vega Feb 25, 2014

    2010 Graduation Rates
    Shaw 31%
    St Aug's 33%

    SAU is a four-year liberal arts university with an average enrollment of approximately 1,500

    So approx, 500 people graduate per year with a lib arts degree and they wonder why there is no money.

  • doser Feb 25, 2014

    A person-once I found out that their integrity was such I immediately disassociated myself from them and took it upon myself to notify the sponsor of the fraud. Other than my legal case against them I have not had any other dealings with them.

  • same ole story Feb 25, 2014

    The problem is that these schools are not preparing the students properly. When I was the hiring manager and saw one of these school applicants cross my desk, They were only ready for entry level jobs at best. Tried a few at mid management and had horrible results. The communication skills were not there! So how are they supposed to be giving money to the school when they can't make a good wage coming out of the school??

  • Viewer Feb 25, 2014

    Does anyone think that private HCBUs are leftovers from the bad days of our past and should be allowed to expire naturally if their alums wont kick in the additional money needed to keep them up and running?

  • A person Feb 25, 2014

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    Sorry to hear that you would associate yourself with an institution that is that far from integrity

  • doser Feb 25, 2014

    I ran a major fund raiser for St. Aug's in the late 90's. Very successful, it was to raise money for scholarships for needy students. The only problem was they never gave any of the money to the students. Instead of giving it to the students they put it in their general operating funds. Sponsors became livid and many never gave again to the school. No wonder they are in this shape now. You cannot defraud people of their money and continue to expect support. By the way they ended up owing me $15K that was never paid, I had to take legal action, got a court ruling against them and have still not collected.
    Many of these problems can be traced to the current leadership or lack there of!

  • A person Feb 25, 2014

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    But why would anyone with a brain and respect for themselves waste the money on one of those useless degrees