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Monday, August 18th, 2014

HBCUs Struggling To Keep Up In Difficult Financial Environment

Institutions of higher learning around the nation have been hit hard by the recession, but none have felt the financial pinch more than America’s Historically Black Colleges and Universities (HBCUs).

How they respond to the challenges ahead will determine whether they survive to continue aiding those who need the help most.

Already hamstrung with considerably smaller endowments and 50 percent lower tuition than their predominantly white counterparts due to the disproportionately low income populations they serve, HBCUs are also hampered by higher dropout risks due to economic and academic reasons.

Their reliance on government funding has led to additional financial challenges following recessionary budget cuts. In 2011, the United Negro College Fund experienced a cut of more than $25 million in funding for strengthening historically black colleges and universities.

The cutbacks are proving disastrous to schools already lacking in funds.

“Historically black colleges and universities (HBCUs) have suffered disproportionately in the current financial crisis,” Marybeth Gasman, associate professor of higher education in the Graduate School of Education at the University of Pennsylvania, told the website grio.com. “The difficult situations at these institutions have many causes, but they stem in large part from the commitment of HBCUs to serving disadvantaged students and from the history of underfunding and discrimination that disadvantages HBCUs themselves.”

According to a survey by the National Association of College and University Business Officers, Howard University is the best-endowed black college, ranking 132nd in the nation with a $371 million endowment.

That’s a major contrast with Ohio State, whose endowment of over $2 billion dollars is far more than twice thecombined endowment of the schools of the historically black Southwestern Athletic Conference (SWAC) and Mid-Eastern Athletic Conference (MEAC).

Ivy League Harvard University’s endowment is $19 billion, far surpassing the combined endowment of all HBCUs of only $1.6 billion.

Some HBCUs aren’t helping their limited endowments by their failure to crack down on the problem of hazing-related deaths on their campuses. Lawsuits related to hazing incidents can exact a high financial cost by eating into small college endowments. In addition, hazing drives away long-term donors, ruins the school’s reputation and costs HBCUs revenue when students decide to attend another school for fear of hazing.

According to Gasman, tight budgets and low matriculation levels have caused HBCUs to take drastic steps to stay alive.

Not helping things is the perception among some that HBCUs are relics of the past that no longer needed. To survive, they will need their leaders to effectively articulate their continued relevance and institutional value when many black students may no longer view HBCUs as their best option.

Raising more money to stay competitive with their white counterparts would help, but it’s unclear how realistic that is in the immediate future. HBCUs account for 42 percent the 116 colleges and universities with a student loan default rate of 10 percent or more.

Their dire financial straits have led some HBCUs are redefining themselves as “small, private liberal arts”or “multicultural, comprehensive” colleges — in addition to their mission serving the black community — as a means of niche marketing. Others are combating dwindling enrollment and funding shortfalls by recruiting non- African-American students.

Their supporters have long applauded the stated mission of HBCUs and their value. An altered financial landscape means they will need to change their approaches as well.

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