In these challenging times, Tennessee State University faces significant financial difficulties. The historically Black land-grant institution has implemented various cost-cutting measures to get its finances back on track. With a $46 million deficit projected at the end of the year and a chronically underfunded status, the university is at a crossroads.

Unraveling Tennessee State University's Financial Struggles

Times of Leaness and Cost-Cutting Measures

Times are indeed lean at Tennessee State University. This semester, 114 positions were cut, duplicative contracts for software and services were slashed, and all nonessential hiring and spending were frozen. To save costs, staff even use golf carts instead of larger vehicles on campus. State auditors informed the Tennessee State Board of Trustees that this financial situation is serious. The university had $8.4 million in reserves when interim president Ronald Johnson started this summer, which is only about one-fourth of what he considers "healthy."This has led to a series of actions. State officials provided an early allocation of $11 million and $32 million in liquid funds previously designated for a new academic building to enable the university to make November payroll and pay operating costs. However, some lawmakers have made it clear that such help may not be available in the future.

Strides Made and Challenges Ahead

Interim president Johnson believes Tennessee State has made significant strides. For instance, without making meaningful cuts, the estimated $46 million deficit at the end of the year would have been $52 million. Administrators have closely examined expenses and made changes, such as cutting back on travel for the marching band and changing how promoters are paid for the annual homecoming. The university is also trying to improve retention by overhauling its student advising model.But despite these efforts, faculty members remain uneasy. Professor Learotha Williams worries that students can sense a shift in faculty and staff's "overall morale." From a practical perspective, it's difficult as some support services are no longer available. He expects more layoffs to come, and there is a lot of uncertainty.

Root Causes of Financial Troubles

The question of how Tennessee State got into such deep financial trouble depends on who you ask. Some state lawmakers blame the former president, administrators, and trustees and even voted to vacate the 10-member board and replace it with university alumni hand-picked by Republican governor Bill Lee.A forensic audit found no fraud or malfeasance but identified "significant procedural deficiencies" and some "not sustainable" spending, like a 250 percent increase in student scholarships between 2020 and 2023. There was also a "student housing crisis" in 2021 and 2022 due to an enrollment boom.Interim president Johnson blames the sharp enrollment decline, partly due to the housing crunch and the botched rollout of the new Free Application for Federal Student Aid, which prevented many high school seniors from completing the form. Other university supporters, like former president Glenda Glover, blame chronic underfunding, which they claim has hampered the university's financial growth for decades.A report by the Tennessee Office of Legislative Budget Analysis found the state had shortchanged the university by between $150 million and $544 million over at least 50 years. The U.S. Education and Agriculture Departments put the underfunding estimate even higher, at $2.1 billion from 1987 to 2020.Glover repudiated claims that her administration caused the financial woes and said relations with policymakers soured after the state's debts were uncovered. She also claimed university leaders dipped into cash reserves due to delayed state scholarship reimbursements.

Friction with a Former Financial Aid Director

Adding to the turmoil is friction with a former financial aid director. Tanaka Vercher, who worked at TSU for 21 years, sued the university last week, claiming officials retaliated against her for following federal rules. She insisted on completing a required reconciliation process to verify student financial aid information, but was fired the next day with no explanation despite positive performance reviews.Johnson couldn't comment on the pending litigation but said the university is committed to following its processes. He is ready to move on and initiate a better era for Tennessee State."We have to make sure that we are in a position to sustain a future-ready TSU," he said. "The reason why we're doing all this is so that these students can go out and make a difference in the lives of people. Because it matters, we have to make sure that we put it in a position to continue to matter."