JCSU Takes Proactive Steps to Position for Future
Charlotte, N.C. (October 31, 2013) – Johnson C. Smith University announced today a 15-point plan of saving measures to ensure the continuing financial stability of the university while addressing the growing needs of its students for financial assistance. The plan will position the university for the future by controlling expenses and solidifying its financial foundation.
Johnson C. Smith University’s families have been impacted by factors such as unemployment, changes or shutdowns in government programs and the elimination of social and economic safety nets. “A day does not pass when a parent or student doesn’t plead for the university to assist with some gap funding,” said JCSU President Ronald L. Carter.
Nearly 85 percent of JCSU students rely on federal assistance such as the Pell Grant and the Parent PLUS Loan, Carter said. “We must remain true to our mission by doing everything possible to find additional funds for them,” he said. “I’m delighted that The Duke Endowment gave $2.5 million to address this critical need. However, much more is needed to address this problem completely. Therefore, the administration and Board of Trustees have undertaken rightsizing measures that will allow us to assist students and families now while raising gap scholarship funds.”
The rightsizing measures include freezing or eliminating vacant staff positions, strengthening the platform used to purchase goods and services, conducting a feasibility study to identify additional opportunities for outsourcing, implementing an unpaid furlough for staff, and a layoff of 21 employees. “Within today’s increasingly competitive higher education arena and the contradictory decisions from the U.S. Department of Education, we must focus on what we can control to maximize our financial position,” said Carter.
Carter said it was a difficult decision to lay off employees. “Making the decision to reduce the workforce was not an easy one, and it was not our first option,” said Carter. “We will offer support services, including career counseling to assist with their transition.”
Carter said he was particularly moved by the selflessness of an employee after she was told about her lay off. “I will never forget that she said, ‘if losing my job will allow the university to keep even one student in school, then this is the right thing to do.’”
Since the start of the Great Recession in 2007, troubling events on the higher education landscape continue to threaten many private, independent colleges and universities. The nation’s 104 remaining historically black colleges and universities (HBCUs), including JCSU, have been particularly impacted by these events.
A major contributing factor to the hardship for parents and students is the change in requirements for the Parent PLUS Loan administered by the U.S. Department of Education. Because HBCUs serve greater numbers of disadvantaged students, tighter underwriting standards in the Parent PLUS Loan program have had a disproportionate impact.
At JCSU, 1,801 students enrolled during the 2012-2013 year. Nearly 300 of those students were unable to bridge the gap between their financial aid package and the cost of tuition. As a short term response, the University substantially increased institutional aid in the form of tuition discounting to retain about 180 of these students. The remaining 120 students were forced to defer their dreams of a college education and returned home. To offset the impact of the Parent PLUS Loan Program changes, the University’s discount allocation for 2012-2013 jumped to $6,560,000 as compared to $4,950,405 in 2011-2012, and $3,411,172 a year earlier.
“These are proactive measures to keep us away from financial trouble while promoting a focused approach to enrollment growth,” said Carter. “We have the full support of our Board of Trustees, foundations, corporations and generous donors as we continue our forward trajectory as a 21st century urban university at its growing edge. I feel confident that the steps we are taking today will place the university on stronger footing in the future to assist our students in closing the gap of their financial obligations to the university.”
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