That’s a question that in recent years dozens of American universities have asked in the wake of credit downgrades from Moody’s Investors Service. Unfortunately, their responses have not always been effective in terms of restoring long-term solvency. As Jenna A. Robinson points out in today’s Pope Center feature, the institutions most vulnerable to receiving downgrades are small private colleges with modest endowments and historically black colleges and universities (HBCUs). Stagnant or falling enrollment, rising costs, weak revenue growth, and competition from non-traditional educational providers have threatened those schools’ already-weak financial models.
In North Carolina, as Robinson notes, a few of the state’s HBCUs are in critical financial condition. But university leaders and state policymakers have failed to implement much-needed changes, something which could result in perpetual taxpayer bailouts. Robinson says that those universities should instead follow the path taken by some of the state’s troubled private colleges. Schools such as William Peace University, Saint Augustine’s University, and Belmont Abbey College have taken bold steps to streamline administrative tasks, cut unnecessary faculty and staff, and rethink their degree offerings. As a result, those schools are now on much stronger financial ground.