The Financial Challenges of Historically Black Benedict College

The economic recession has hit many small, private black colleges and universities very hard. Morris Brown College in Atlanta had the water shut off because it could not pay its bill. LeMoyne-Owen College in Memphis was saved only by a cash infusion from local governments. Paul Quinn College in Texas lost its accreditation due in part to the college’s financial situation.

Benedict College in Columbia, South Carolina, also is in a precarious financial position. The Department of Education notified the school that it failed to meet the standards of financial responsibility. As a result, the college must make financial aid distributions under federal student grant programs and then request that the government reimburse the school. The college is also required to notify the Department of Education of any developments that negatively affect the school’s finances.

Benedict College reports that it has $117 million in assets but more than $94 million in debts. The college hopes to enroll 2,950 students this fall. This would be an increase of 400 students since 2005. Maintaining a high enrollment level is crucial to the college’s financial situation.

Looming on the horizon is an accreditation review in 2010. A college’s financial situation is a critical element of the accreditation process.