It only seems like a lot because officials have not been forthcoming about the numbers and because Bethune-Cookman University, like many historically black colleges and universities, doesn’t have millions lying around to address issues of crisis.
But we ought not be misled by a big, bold headline on a little black school; higher education at large is in a financial crisis, and more specifically, a debt crisis. The costs required to keep doors open, students housed, fed and learning and employees paid are skyrocketing out of control. And while a recent Daytona Beach News Journal article makes it seem like BCU’s issues are an outlier in this bad culture for college financing, the school is, in fact, a regular player in a dangerous game of money maneuvering and disciple robbing.
The News-Journal cites bloated administrative costs, endowment spending and construction deals as the root causes of BCU’s $17 million cash flow woes. While the school may be small, it attracted national attention for this story – because it is a black college with clear money problems.
But pull back on the overall coverage of higher education and debt and a bigger trend of cash burning emerges. The University of California System, for example, is in more than $17 billion of debt, mostly tied to costs for construction, pension, and executive wages.
A recent study from the Roosevelt Institute shows a sampling of 19 colleges which have lost millions in high-risk investments, construction bonds, and debt refinancing.
So institutional debt is a widespread problem, not limited to just Bethune-Cookman or to HBCUs. But it is also correlated to student outcomes, and this prospect is what keeps HBCUs in trouble. If broke institutions have high debt and struggle to graduate broke students, it fits into the spoken and unspoken narratives of “how are HBCUs still relevant?”
So even thought the News-Journal headline may be salacious enough and justifies alumni concerns about mismanagement and detached leadership at the school, the truth is that its not unique to the school. But the bigger question is what are they, and all of us, going to do about it?
A school cannot fundraise or reduce costs enough to eliminate debt and to remain solvent as an institution. BCU runs as strong a risk of accreditation downgrade for high debt as it does for drastic cuts and a plan devoid of vision for building revenue. The only solution is to stabilize enrollment, and selling the value of the campus to communities and families can cure all ills, even $17 million in debt.