In reversal, St. Augustine's University says it won't offer any education this fall
Published in News & Features
RALEIGH, N.C. — After 158 years in operation, St. Augustine’s University will not offer any classes or educational programs this fall.
This spring, the HBCU in Raleigh gave up on a lengthy court battle for accreditation and filed for bankruptcy. Despite that, the school developed and planned to launch eight online, nondegree programs this September. The courses — which focused on topics like programming, artificial intelligence and public health — were going to cost students between $1,100 and $4,500.
St. Augustine’s had already developed syllabi, identified instructors and marketed these courses. They were slated to start in mere weeks.
But earlier this month, bankruptcy judge David Warren raised serious concerns about this effort, saying he didn’t think St. Augustine’s was in a position to make promises to potential students. And although preserving the school’s century-and-half-old educational mission is important, he said, it may not be the smartest use of resources at this particular point.
So the school is putting the development of those programs on pause, the university’s lawyer, Ciara Rogers, told Warren in bankruptcy court on Thursday.
That will help reduce payroll and other expenditures. The programs weren’t expected to be major sources of cash flow for the school anyway, she said.
The school has also discontinued its “long-standing” partnership with Ed2Go, a third-party vendor of virtual continuing education courses. The few students who are currently enrolled in Ed2Go courses can finish out their programs, according to Rogers.
Bankruptcy administrator Brian Behr called the choice to abandon educational offerings a “very good decision,” because it will reduce the school’s budget and the rate at which it’s burning through money.
Behr said the school’s first priority needs to be exiting bankruptcy healthier than it was when it came in. That “fresh start” will allow the school to refocus on its educational mission, he said.
“I’m starting to feel good that there’s a possibility that some entity that performs the services that St. Augustine’s provided will continue to exist on that property and provide those services into the future,” Behr said. “So that’s a positive development.”
In the meantime, Warren called the university “essentially closed.”
Behr also commended St. Augustine’s on its amendments to its filings. Originally, it had marked nearly every debt “disputed” — including debts to individual students. Now, those aren’t marked as disputed.
“I became concerned that the debtor’s dispute of all the students’ claims was going to present an issue, because a lot of them are younger individuals who may have moved,” Behr said. “(I’m not sure) whether or not they truly had notice of the bankruptcy and were familiar with the requirements that they would need to file a claim because their claim was disputed.
“On top of the fact that (sometimes) these aren’t monies the university owes them, but rather borrowed funds the students also need to repay. ... I’m just so pleased they’ve amended these schedules to remove the disputed nature of these claims.”
The university has also filed an application to work with real estate company Avison Young to advise on real estate strategy. Rogers had previously said the school is considering selling off peripheral parts of campus.
The school will pay Avison Young a retainer of $50,000, according to court filings, plus a percentage of the sale price not to exceed $7.5 million.
St. Augustine’s 105-acre campus is valued at approximately $200 million.
“I’m hopeful that the path forward will not necessarily involve a wholesale sale of the property,” Behr said. “I don’t think that’s necessarily in the best interest of the debtor, at least currently. But the debtor likely does need to have that on the back burner as a possibility if everything were to fall apart.”
The school’s board of trustees has enlisted the help of a former Massachusetts Institute of Technology chancellor. Phillip Clay will advise the board on a pro bono basis, Rogers announced in court Thursday.
Clay is from Wilmington and is an alumnus of and former trustee at the University of North Carolina, Chapel Hill. His research and teaching focuses on urban housing policy. His wife Cassandra is from Raleigh, and the two married here in 1971.
On Aug. 1, Clay signed confidentiality documents and other paperwork regarding his work for St. Augustine’s, Rogers said.
“This is a person who cares about the university and the university’s success,” Rogers said. “He has written and studied about historically Black colleges and universities, and the strategies for keeping them viable in today’s education landscape.”
The university is likely to be back in court on Aug. 26 at 10 a.m.
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