Saint Augustine's University — a small, private nonprofit HBCU located in Raleigh, North Carolina — has filed for Chapter 11 bankruptcy, federal court records show.
In addition to filing for bankruptcy, Saint Augustine’s also stated that it would end a legal battle to preserve its accreditation, which is set to end May 15. Institutions cannot access federal financial aid without accreditation.
ABC11 reports that alumni of Saint Augustine’s say the school's financial crisis “could have been avoided” and that they have “raised concerns for years about the future of their alma mater.” Interim President Dr. Jennie Ward-Robinson has stepped down and that Dr. Verjanis A. Peoples will serve as interim president.
The bigger picture:
Small, private, tuition-dependent colleges — particularly those serving marginalized communities — are caught between a massive demographic decline in college-aged students and enrollment being increasingly concentrated in a handful of higher-profile, larger, and wealthier institutions. For HBCUs specifically, this news highlights a widening wealth gap within the sector: while prestigious HBCUs like Spelman or Howard are receiving record-breaking donations and enrollment surges, smaller schools with thin endowments are struggling to cover basic operational costs like security and janitorial services, as seen in SAU’s creditor list.
The school listed its estimated liabilities at between $50 million and $100 million, according to its bankruptcy petition. The petition says the school has between 200 and 999 creditors. The biggest debts — which are listed as “disputed” — include $14.4 million to the IRS and millions of dollars to federal agencies, including $1.8 million to the U.S. Department of Education. Janitorial and security companies are also listed as creditors.
While the university is casting its bankruptcy as a strategic way to “strengthen its future,” observers of HBCUs are not so certain.
