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Pennsylvania to Forgive $30M In Loans In Effort to Keep Nation’s Oldest HBCU Afloat

Cheyney University has lost more than half of its student enrollment over the last seven years. (Image courtesy of the Delaware County Daily Times)

In an effort to save the nation’s oldest historically Black college, the Pennsylvania state university system on Tuesday, Aug. 22, agreed to forgive more than $30 million in loans to Cheyney University if the school is able to maintain a balanced budget over the next four years.

The gracious gesture comes as the university struggles to stay afloat amid a sea of serious financial woes and declining enrollment, according to Philly.com. The school currently faces a Sept. 1 deadline to present a plan addressing its financial and programming deficiencies, proving why it should be able to keep its accreditation.

In just the past week, the HBCU has been forced to cut nearly 20 administrative positions. Officials said the 746-student institution plans to axe some of its academic programs as well since the board of governors gave it clearance to discontinue programs without adhering to previous rules that required currently enrolled students be permitted to finish.

“They have to submit a balanced budget if they want their accreditation to be continued,” Kenn Marshall, a spokesman for the state system, told Philly.com.

Without it, the school’s students would no longer be eligible to receive financial aid. Such a predicament would eventually force the school to close.

“Cheyney University cannot survive without accreditation. Period,” Cynthia D. Shapira, chair of the board of governors, said in a statement. “And today’s serious actions give Cheyney the path forward.”

Under Tuesday’s approved plan, the university system will forgive one-third of the loans once Cheyney slashes $7.5 million in its current budget and maintains a balanced budget from 2018 to 2019, Philly.com reported. The other two-thirds will be forgiven if the school is successful at keeping the budget balanced over the next two fiscal years.

It’s hoped that the plan will help the university get back on its feet as it works to close the more than $7 million gap in its budget and preserve its accreditation.

“By holding Cheyney accountable for achieving these goals, we are making an important shift toward rewarding good performance and away from enabling the kinds of decisions that have fostered Cheyney’s problems for decades,” Chancellor Frank T. Brogan said.

Once Cheyney submits its plan to the Middle States Commission on Higher Education, the board will send a team to the school determine whether to discontinue its accreditation or give it an extra year to prove it can correct its issues.

The commission is expected to make a decision by mid-November, according to the newspaper.

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