Long-struggling Cheyney University is well on its way to digging out of financial problems, and beginning next week, it will get help with its academics from a new panel of prominent national leaders in the work of historically black colleges, state officials said.

The 1,488-student school is closing a deficit that once ran to $2 million in a $27 million budget, said John C. Cavanaugh, chancellor of the Pennsylvania State System of Higher Education, which oversees Cheyney and 13 other colleges and universities.

And the state plans to pump in $50 million from its construction fund to build a residence hall - Cheyney hasn't had a new dorm in more than 30 years - renovate the science building, and make other upgrades, he said.

"Overall, we've made substantial progress from this time last year," Cavanaugh said last week. "We took care of the finances, and now we're turning our attention to the academics."

On Thursday, Cavanaugh and Cheyney's board of trustees will announce the appointment of a five-member advisory panel to be led by H. Patrick Swygert. Swygert, a Philadelphia native and former Temple University executive, stepped down last June as president of Howard University - of which he is an alumnus - after 12 years. During his tenure at the historically black college, he led a record-setting $250 million capital campaign and a technology push.

Also on the committee are:

Shirley A.R. Lewis, former president of Paine College, a historically black school in Augusta, Ga.

Michael L. Lomax, president and chief executive officer of the United Negro College Fund.

Frank G. Pogue, interim president of Chicago State University and former president of Edinboro University, part of Pennsylvania's state system.

Leonard L. Haynes III, executive director of the White House Initiative on Historically Black Colleges and Universities.

The panel was requested by Cheyney's trustees board. Chairman Robert W. Bogle, publisher of the Philadelphia Tribune, said Cheyney historically had been underfunded by the state and even after a federal civil-rights settlement a decade ago had not been made whole.

"This school will fail unless we get some help that will make us a fair and equal partner," he said.

Trustees wanted an independent group to identify the school's needs, he said.

The panel, whose members will not be paid, is expected to be in place for about a year, Cavanaugh said. It will give ongoing recommendations rather than just a final report.

Cheyney president Michelle Howard-Vital, at the helm for nearly two years, was not available for comment last week, said her spokeswoman, Antoinette Colon.

Cheyney, founded in 1837, joined the state system in 1983. On 275 acres of farmland in Delaware and Chester Counties, it is known for giving underprivileged inner-city students a chance at a college education that other schools might deny them. More than half of Cheyney students hail from Philadelphia, many from the underperforming city school district.

For years, the school has struggled with dismal retention and graduation rates, although it is not the worst among its peer institutions. Fewer than a third of the students who enter Cheyney as full-time freshmen are graduates six years later.

Mary Beth Gasman, an associate professor of education at the University of Pennsylvania, said she hoped the advisory panel focused on retention for students' sake, but also for the school's viability.

"It helps with alumni giving and corporate giving if people see the institution as getting stronger or more viable," she said.

In December, the university posted a draft plan for improvement, including starting a "Second Chance" program for students on academic probation.

Cavanaugh described the plan as "a good start."

Academics aren't the school's only challenge. Last summer, state officials found sloppy bookkeeping and suspended direct credit-card purchasing.

A state system finance officer began spending two days a week at Cheyney in March 2008 to help straighten out operations. He is still helping, Cavanaugh said.

The deficit, he said, in part was the result of the school's failure to collect tuition bills and get financial-aid forms out on time.

"Student bills went out on time this past semester," he said. "Our collections are much improved."

Cavanaugh declined to say what, if any, budget shortfall is expected this year.

The school also will reduce its number of departments to five, which is expected to save about $228,000. No layoffs are planned, he said.

It also plans to enroll more high school students in classes at its Philadelphia site, according to the plan.

Applications to Cheyney were running 5 percent ahead of last year, and more students than a year ago have submitted deposits to attend, he said.

The new residence hall "will really help recruitment," Cavanaugh said.

The state system typically doesn't finance residence-hall construction but has in this case as part of continuing negotiations with the U.S. Education Department's civil-rights office, state officials said.

A federal civil-rights suit alleging the state did not adequately fund Cheyney led to a 1999 settlement in which the state funneled $36.5 million to Cheyney for building and academic upgrades.

Penn's Gasman said it was good that school leaders had asked for outside help.

"It's really, really important that this institution be viable," she said, noting its historic mission. "It would be a real loss if it didn't exist."

Contact staff writer Susan Snyder at 215-854-4693 or ssnyder@phillynews.com.