Cheyney University, facing continued enrollment struggles and a nearly $10 million cash-flow problem, got a little more breathing room Wednesday after Gov. Tom Wolf met with leaders of the state university system. They decided to continue to support the school’s efforts to transform, and postponed any decision on whether the system would make Cheyney another loan.

The meeting at Wolf’s Harrisburg office included Daniel Greenstein, the new chancellor of the Pennsylvania State System of Higher Education; board of governors chair Cynthia Shapira; Cheyney president Aaron Walton; and State Sen. Vincent Hughes (D., Phila.).

Walton said after the meeting that all “agreed to support Cheyney’s exciting plan for transformation that includes public-private partnerships and other innovation alternatives aimed at securing Cheyney’s long-term future.”

The meeting followed a Senate budget hearing last week, during which Greenstein said the historically black university was “highly likely” to lose its accreditation this year.

Rather than wait for the hammer to fall, Greenstein said, Cheyney should plan for that likelihood and figure out a new path, perhaps one in which it affiliates with another university as a department or school, or provides career training programs that don’t require accreditation.

None of those scenarios envisioned Cheyney — which has lost two-thirds of its enrollment since 2007 — as a fully accredited university.

Enrollment at Cheyney University

The number of students enrolled each fall has fallen by 67 percent since 2007, compared with a drop of 10 percent for the other 13 Pennsylvania state-supported universities.

SOURCE: Pa. State System of Higher Education
Staff Graphic

The system, Greenstein said at the Senate hearing, must begin to plan for a transition for current employees and students, and ask itself hard questions, such as whether it is appropriate to enroll new students for next year.

“There are lessons to be learned from what has happened at Cheyney,” Greenstein said. “Whatever happens, I hope we will take the time and create the space to learn those lessons so they will never be repeated in this commonwealth or this country.”

Greenstein’s comments shook many Cheyney supporters, who believed the school was on the path to better times after a decade of management problems and financial hurdles.

The university in July announced plans to partner with Thomas Jefferson University, Starbucks, and others in creating an African American-focused institute that would promote the school’s legacy. While those plans are underway, they haven’t led to a financial turnaround.

“There has been two years of hard decisions that no one else wanted to make before, and a positive trend right now," Hughes said at the hearing. "And what I don’t want us to do is to snatch the rug out of that positive trend.”

Hughes, who serves on Cheyney’s council of trustees, said nothing less than a fully functioning Cheyney was acceptable.

Kenn Marshall, a spokesman for the state system, said the chancellor was pleased with the governor’s meeting and the plan to support Cheyney. But that doesn’t answer the questions the chancellor posed.

“Where we go from here, I don’t think anything’s been decided,” Marshall said.

Founded in 1837, Cheyney, on 275 acres in Delaware and Chester Counties, has a storied history but has struggled in recent decades.

Greenstein said the school, which has a $27 million budget, appears to need nearly $10 million to make it through this fiscal year. Without it, Cheyney would be in violation of a requirement that the Middle States Commission on Higher Education set as a condition to keep its accreditation, he noted.

The school has received a two-year extension from the commission to fix its finances, and there is no mechanism to provide a third.

In addition, Cheyney may have to repay the federal Department of Education tens of millions because of mismanaged financial aid stemming from a 2015 review, Greenstein said. And enrollment has fallen to 415 students this spring, Greenstein said, down from more than 1,400 a decade ago.

The board of governors had been considering voting Thursday on extending Cheyney the $10 million. Another loan would seem to counter what system leaders promised in 2017 when they agreed to forgive Cheyney $30 million in prior loans if it maintained a balanced budget for the next four years.

And another lifeline from the state system, some fear, could hurt Cheyney’s accreditation, showing the commission that the school didn’t maintain a balanced budget.

The money lent to Cheyney has come from the other 13 universities in the state system, many which also have lost enrollment and are struggling. For the first time since 2001, the system’s overall enrollment dipped below 100,000 this year, and Greenstein said projections call for an additional 2 percent drop next year.

Walton said he remains confident that the university can finish the fiscal year with a balanced budget and he’s prepared to aggressively raise funds to close whatever gap there is. He said he’s also confident the university will keep its accreditation and noted that the school still has eight months to work things out before Middle States decides.

“We have until June 30 to balance the budget," said Walton, a retired executive who took over at Cheyney nearly two years ago. “That’s what we have to do, and we’re going to do it.”

Both Hughes and Walton noted that the school has seen a 33 percent increase in applications and a jump in students who have paid deposits for the fall.

But Greenstein laid out other numbers about Cheyney: Six-year graduation rates between 15 percent and 25 percent. Nearly a third of its students default on student loans. Cheyney performs, he said, below other historically black colleges and universities, as well as universities generally.

But he would not recommend closing it, he said.

Other options that have been discussed include converting Cheyney into a training ground for teachers who work in inner-city districts or a place that trains the next generation of public policy leaders in social justice and race equity, Greenstein said.

Staff writer Angela Couloumbis contributed to this article.