This struggling HBCU might not survive beyond the spring

Kentucky State University will need financial help or be forced to close after operating in the red for the past two years.
By: | September 27, 2021
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Kentucky State University, a historically black land-grant institution whose heritage dates back 135 years, will need an infusion of assistance to survive past 2021, according to its chief financial officer Gregory Rush.

The university is facing a budget deficit of around $13 million for FY2022, university officials revealed, after years of not being able to hit its targets under former president M. Christopher Brown II, who resigned in July. Though Kentucky State has seen enrollment and completion rates remain steady since 2019, high salaries, overspending and other missteps have led to the shortfalls.

“We have been doing cash-flow projections,” Rush, who has been in the position for only two months, told legislators during a meeting with state officials on Friday. “We are confident we’re going to be able to make it to January. We believe we can make it through April. But at this point … we would not have enough cash to operate past April.”

KSU, which is serving a little more than 2,100 undergraduate students this year, received a boost of $5.4 million from the state for operating costs during the fall semester. But that has very little to no impact on the price tag of monies owed that remains, including $8 million to vendors plus costs from construction projects.

“This is not something we can cut our way out of,” Rush said.

The Kentucky Council on Postsecondary Education was tasked by Gov. Andy Beshear to look into Kentucky State’s financial situation. The revelations of the deficits, a deep history of problems around KSU’s finances, a precipitous drop in degrees conferred, the president’s resignation and the ouster of a Board of Regents member sparked a strong reaction from the Chair of the Joint Interim Committee on Appropriations and Revenue.

“The financial case to be made is there should not be a Kentucky State,” said Chris McDaniel, R-Taylor Mill. “That we should give these kids full tuition, send them to the University of Kentucky, send them to the University of Louisville. But there are larger cultural implications at play as well.”

Kentucky State’s projected FY2022 budget is just shy of $50 million—it was $40.6 million in FY2021—with more than half of revenue coming from state appropriations and $15.6 million from tuition and fees. One of the line items that has sparked concern is the $2 million projected to cover “student success” expenditures. Soaring student debt is said to be another issue plaguing KSU.

“I think part of the issue over the past three or four years is that we have not had a full student body that has satisfied their balances,” Rush said Friday. “Part of the reason our enrollment declined just a bit this year is we began enforcing that this fall.”