For the last five years, Pennsylvania's state higher education system has extended cash-strapped Cheyney University a line of credit totaling more than $30 million so that the school could continue to operate.
Now, Pennsylvania State System of Higher Education officials say, the loans are no longer going to be available unless Cheyney — one of the nation's oldest historically black universities — can show it will be financially solvent in the near future. Cheyney, one of 14 universities in the system, must develop a new "institutional model" to get there.
"We're committed to its future," said Kenn Marshall, a system spokesman. "But it needs to operate in a different way. They need to either be able to operate on a smaller budget or come up with a way of generating additional resources."
The state system Wednesday announced members of a task force that will be charged with developing that model and making preliminary recommendations to the system's board of governors in May.
One option is that Cheyney could develop a focus as an honors college, capitalizing on its successful Keystone Honors Academy, which attracts high-performing students, Marshall said.
Founded in 1837, Cheyney has a storied past, touting such prominent graduates as longtime 60 Minutes correspondent Ed Bradley; civil rights leader Bayard Rustin, a key aide to the Rev. Dr. Martin Luther King Jr.; and the 19th century educator and activist Octavius V. Catto.
But in recent years, the university, which operates on a $30.2 million budget, has struggled with low enrollment and deficits. The university had lost more than half its enrollment in six years, though it saw an increase of 35 students this year. It currently has 746 students.
Because of its financial woes, the university was placed on probation in 2015 by the agency that accredits colleges and universities. Cheyney also that year was cited for the mismanagement of student financial aid and still may have to repay $29 million to the U.S. Department of Education.
The state system last month extended an $8 million line of credit to the school. Including the loans from the system and other liabilities (not including the $29 million it may owe the U.S. Education Department), Cheyney is in arrears for about $60 million, Marshall said.
State Sen. Vincent Hughes (D., Phila.), who will serve on the task force, said that although some of Cheyney's problems are self-inflicted, the state for years has failed to fund the university at an adequate level. Cheyney's small size has made it particularly vulnerable to a pattern of dropping enrollment that the entire system has experienced, as well as cuts in funding, he said.
"When everybody else gets a cold, Cheyney gets pneumonia, because it just can't absorb those kinds of reductions," he said.
He said he was hopeful that the new review will get the school on the right path.
Robert W. Bogle, chair of Cheyney's council of trustees, and Aaron A. Walton, a vice chair of the board of governors, will co-chair the task force. Other members include State Rep. Jordan Harris (D., Phila.), chair of Pennsylvania's Legislative Black Caucus; Cheyney trustee Sam Patterson; State Rep. Matthew Baker (R. Bradford); board of governors chair Cynthia D. Shapira and vice chair David M. Maser; and Sarah Galbally, the state's secretary of policy and planning. A group of students, faculty, staff, alumni, community leaders, and elected officials will serve as advisers.
The task force is operating independently of a larger review of the system, currently underway, which could result in mergers or closure of some of the system's universities.