Central State University, Ohio's only public Historically Black College and University (HBCU), is facing a financial crisis. Hemorrhaging money and students, the institution has turned to the state for guidance, hoping to chart a path towards financial stability. With declining enrollments, budget deficits, and struggles to pay vendors, the university has been placed on "fiscal watch" by the Ohio Department of Higher Education, signaling the need for immediate action.
Restoring Financial Footing: Central State's Uphill Battle
Uncovering the Fiscal Challenges
When the new president, Morakinyo A. O. Kuti, arrived at Central State this summer, he found the university's finances in disarray. The institution had accumulated deficits of $3 million in fiscal 2024, $4 million in 2022, and a staggering $14 million in 2023. These budget troubles were largely driven by declining enrollment, with on-campus student numbers dropping to around 1,600 in 2022, while the online student population, which had once reached as high as 4,000, plummeted after the university shuttered its controversial Career Plus program.The Career Plus Conundrum
The Career Plus program, a partnership between Central State and Eastern Gateway Community College, allowed union members to earn an associate degree and then a bachelor's degree at Central State. However, the program came to an abrupt end in 2023 when the U.S. Department of Education sent a cease-and-desist letter, claiming the program violated federal financial aid regulations. The loss of this program had a significant financial impact on Central State, as the university had invested heavily in supporting the online infrastructure to accommodate the influx of students.Broader Challenges in Higher Education
While Central State's financial woes are unique to the institution, the challenges it faces are not entirely isolated. Chancellor Mike Duffey of the Ohio Department of Higher Education emphasized that the university is grappling with the same issues plaguing higher education institutions nationwide, including the demographic cliff – a decline in the number of traditional-age college students – and the dwindling of federal COVID-19 relief funds, which had helped shore up the finances of many institutions.Fiscal Watch: A Necessary Step
Central State's placement on "fiscal watch" by the Ohio Department of Higher Education is a designation that signals the need for immediate and decisive action to improve the university's financial condition. This is the second time in the last decade that the institution has been placed on fiscal watch, underscoring the persistent nature of its financial challenges.Charting a Path Forward
To address the financial crisis, Central State has already taken several measures, including suspending most hiring, limiting travel, and laying off 12 employees, saving approximately $700,000 for the current fiscal year. The university is also reviewing its contracts, aligning academic programs, and exploring ways to increase revenue across the board.Collaboration with the State
The state's involvement in Central State's financial recovery plan is a crucial step. The university will have to develop a comprehensive financial recovery plan within three months, which will include an analysis of how it arrived at its current financial position and the steps it is taking to improve its situation. The state auditor will also provide a report to the university's Board of Trustees, offering recommendations and insights. Additionally, the state will fund a firm to provide additional accounting support to the university.Optimism and Resilience
Despite the challenges, President Kuti and the state officials remain optimistic about Central State's future. Kuti expressed his goal of ending the university's fiscal watch within 18 to 24 months, ahead of the department's three-year timeline. The new president emphasized that the designation does not affect the university's classes or accreditation, and that the campus community is aware of the institution's resilience and brighter days ahead.
