S.C. State placed on probation by accrediting agency; move could threaten federal aid

06/19/2014 9:50 PM

06/19/2014 9:51 PM

S.C. State University's accreditation was placed on probation Thursday after an outside review cited the Orangeburg college for problems with its finances, governance, administration and financial-aid program.

The state's only historically black public college has a year to make changes or it could face another year on probation, said Belle Wheelan, president of the Southern Association of Colleges and Schools Commission on Colleges, which oversees the school's accreditation.

If the school does not meet standards by 2016, S.C. State could lose its accreditation, she said.

That could further threaten the school’s finances because federal financial aid is not available to students who attend schools that are not accredited, according to the U.S. Department of Education.

Cuts in federal aid already have hurt S.C. State's enrollment. A plummeting student body — which has dropped by a third since 2007 — is a the center of the school's ongoing financial problems, including a $13.6 million deficit this year.

S.C. State's accreditation was placed under a warning status a year ago for financial and governance problems. Accreditation officials checked the school's progress in April and downgraded S.C. State's status after citing the college for problems in eight areas.

Wheelan said they are: financial resources; financial stability; control of finances; student financial aid; organizational structure; governance; qualified academic and administrative officers; and control of sponsored and external funds.

S.C. State president Thomas Elzey, who arrived a year ago when SACS issued its warning, said his administration is committed to “preserving the university’s legacy of excellence in research, teaching and service.” He said the college expected the bad news from SACS.

“Due to our serious financial situation, we knew that (probation) would be a possibility, but we are viewing it as an opportunity to continue to get our financial affairs in order,” Elzey said in a statement. “That is why we are adamant in our commitment to working with Gov. Nikki Haley and state lawmakers to receive a much-needed budgetary aid package currently being considered by state lawmakers.”

The state legislative session ended Thursday.

S.C. State's $13.6 million deficit this year was accumulated over eight years as the school borrowed money from a community grant program to pay its bills. Those unauthorized loans stopped after a state audit this year.

State budget leaders agreed to loan S.C. State $6 million to pay some of its bills, but the school has used the money to cover payroll and debt payments. To help right the school, the college and lawmakers have changed S.C. State's leadership in both its administrative offices and board room.

A group of former and current S.C. college presidents, including Harris Pastides of University of South Carolina and Jim Barker of Clemson University, have been assigned to help the S.C. State board find solutions. In addition, the school must use as much as $500,000 from its $6 million state loan on a financial consultant.

Elzey has led efforts to boost enrollment and cut spending, which have included trimming staff by 180 employees this school year. Applications are up more than 50 percent from a year ago, S.C. State officials said.

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