Historically black colleges in financial fight for their future

Sidney Ribeau, president of Howard University, announced earlier this month he would step down amid mounting financial challenges that have plagued the institution many view as the Harvard of historically black colleges. The news has sent shock waves throughout the nation's 105 historically black colleges and universities (HBCUs), and concern over their future is at an all-time high.

In the last few years, black colleges like Howard have faced mounting challenges in funding, management and student recruitment. According to a new study released by the Ford Foundation, in the past four years nine HBCUs have had their accreditation suspended by their accrediting body or have been warned or put on probation. In the last 20 years, five HBCUs have been shuttered.

Fewer than 15 percent of black college students today attend historically black institutions.

Howard has had a particularly rough few months after the release of a scathing letter from one of its trustees, which prompted worries over the school's fiscal survival. In the letter, Renee Higginbotham-Brooks, vice chairwoman of the board of trustees and a lawyer specializing in public policy and finance, wrote that if the university doesn't make some "crucial decisions" about its finances, "Howard will not be here in three years."

Even some supporters say black colleges need to adapt their fundraising approaches and course offerings in order to survive.

"There are 300,000 students in these schools. For some students, these schools are their last resort," said Philip Clay, a former chancellor of the Massachusetts Institute of Technology. "The community would miss an anchor institution. Black Nashville without Fisk or Meharry or Tennessee State would be a very different place."

The recession has taken a particularly heavy toll on historically black colleges, which tend to have smaller endowments and receive less in both government support and private donations than other academic institutions do.

According to a recent analysis by the Association of Public and Land-Grant Universities of state funding for historically black land-grant institutions established by the 1890 Morrill Act, HBCUs received far less of the 1-to-1 state matching funds — nearly $57 million from 2010 to 2012 — than they are entitled to under a federal mandate.

By contrast, many predominantly white land-grant schools, founded by the 1862 Morill Act, received far more than their share of funds, according to the study.

John Lee, the study's lead author, said a lack of federal oversight is at the root of the problem. "A solution we presented was to tell states, 'If you don't give out all the matching funds to each school, then you have to return all the funds.' Some states have said they would rather just return the funds."

Private donations, meanwhile, have become harder to come by in recent years.

Alvin Schexnider, a former chancellor of historically black Winston-Salem State University and the author of "Saving Black Colleges: Leading Change in a Complex Organization," said such schools need to find new ways to reach out to donors. "HBCU alums like to go back for homecoming, CIAA, MEAC (sporting events) and all of that, but so much of what we get involved and excited by is social, and higher education is a serious business. It's a serious enterprise, and if we don't get serious about it, a lot of the institutions that we say we love so much won't be around."

Also at the root of the financial troubles facing historically black colleges is the recent tightening of credit standards for obtaining Parent Plus loans, on which many HBCU students and their families rely. Without those federal loans, more than 16,000 students at HBCUs have been forced to find other sources of funding or withdraw from school, and the schools have lost millions in revenue.

"Last spring, Morehouse had to furlough the entire faculty and staff during spring break because of budget issues related to drops in federal funding, especially these Parent Plus loans," said Schexnider. "If Howard and Morehouse, two of the most vaunted historically black institutions, are facing major challenges, you have to wonder what's going on elsewhere. It's not a pretty picture."

There couldn't be a much more critical issue for students at historically black colleges, who tend to come from lower-income families. About 34 percent of HBCU students were low income, according to a recent study by the University of California, Los Angeles, while 28 percent of students at other schools fit that description.

With less funding coming from the federal government and the states, HBCUs are at a huge disadvantage in helping students pay for their education.

"That's part of the reason why many historically black colleges and universities have to keep such a strong federal presence: because they are based on a social serving mission for a population that just does not have major pockets of revenue," said Lisa Higgs, vice president of planning and strategy at Meharry Medical College, in the book "Survival of the Historically Black Colleges and Universities, Making It Happen."

Questions about the relevance of historically black colleges have been popping up more frequently in recent years as states face tough choices about how to spend increasingly limited funds. It hasn't helped that some critics question the quality of education offered by historically black colleges.

"Even the best black colleges and universities do not approach the standards of quality of respectable institutions," writes economist Thomas Sowell in an October 2012 op-ed in The Wall Street Journal. "None has a department ranking among the leading graduate departments in any of the 29 fields surveyed by the American Council of Education. None ranks among the 'selective' institutions with regard to student admissions. None has a student body whose College Board scores are within 100 points of any school in the Ivy League."

But defenders of HBCUs note that while historically black colleges account for just 4 percent of all four-year institutions, they produce 21 percent of all African-American undergraduate degrees. The institutions are even more critical in the science, technology, engineering and mathematics fields, a major focus of growth for the Obama administration. Historically black institutions produce 18 percent of all black engineers, 31 percent of black biological scientists and mathematicians and 42 percent of black agricultural scientists, according to Clay's study.

HBCUs graduate nearly a quarter of all blacks with degrees in business and management, and they account for 17 percent of all African-Americans in health professions.

"What happens a lot of times is, when people look at HBCUs, they're very critical, but they are critical without understanding all the history and the context," said Lee.

Clay says in his study that although HBCUs may not have the resources of the Ivy league, they have a knack for "making a way out of no way." He points out that HBCUs produce more African-American graduates who go on to receive advanced degrees than any other institutions. "Lots of students are wandering into a place where they are unlikely to succeed, if by success you mean graduating in four, six or seven years."

"The bottom line was, are HBCUs necessary, relevant?" said Ty Couey, president of the National Historically Black Colleges and Universities Alumni Associations. "HBCUs are part of the fabric of this nation. If HBCUs didn't exist, they would have to create them. That's how relevant they are."

While nearly all experts agree that HBCUs still serve a vital role in higher education, they say the institutions must adapt. "If you're going to have any future, sometimes you have to make changes that are uncomfortable," said Schexnider. "If you want to make an omelet, you've got to crack a few eggs."

In his book, which reads as a how-to for those aspiring to lead an HBCU, Schexnider argues that the institutions need a new business model for a new type of student. He's not the only one who thinks so. Historically black institutions need to form new partnerships with other institutions, improve their on-campus technology and diversify their sources of revenue, according to interviews with current and former HBCU chancellors and presidents in "Survival of the Historically Black Colleges and Universities," by Edward Fort, a former chancellor of North Carolina Agricultural & Technical State University.

"Black colleges are still needed as conduits of educational access and opportunity," he writes. "They also stand as beacons in mainstream higher education's attempt to diversify academically."