When the great recession hit in2008, no one was safe from the impact, from homeowners to local service providers. However, one set of institutions was overlooked: the nation’s Historically Black Colleges and Universities (HBCUs).

The 105 HBCUs found that they had to across the country have had to tighten their budgets and make wiser decisions about what they were doing with their money.

“Because HBCUs have accounts across the federal government they have certainly been impacted by the recession,” said Edith Bartley, director of government affairs with the United Negro College Fund (UNCF). “For the FY 2011 budget we sustained a cut of over $25 million in our main account -Title III-B funding, which is strengthening historically black colleges and universities.”

Not even Howard University, perhaps the nation’s most prestigious HBCU, avoided financial problems during the recession. The school had to make significant changes to make sure it was able to maintain academic programs and provide aid to students.

“The main thing we had to do is provide more student aid as students were having less access to loans,” said Howard University spokeswoman Kerry-Ann Hamilton. “We reallocated some of funding and we’ve provided $70 million in institutional aid to our students.”

To recoup the funding the school had to defer some facilities projects, officially close campus during spring break and force each academic and support department to operate within its own budget.

Those cuts were met with hostility though when it was discovered that the school had paid bonuses to four high ranking members of the university. Several faculty members of the school wrote a letter to Howard University President Sidney Ribeau and Board Chairman Addison Barry Rand when they learned of the bonuses that cost the school $1.1 million.

“The bonus compensation of these three (3) senior officers and one (1) faculty member/center director of the University is viewed overwhelmingly by faculty to be an affront to the integrity of the University and a slap in the face to the entire faculty who have been laboring under salary compression for a number of years,” the letter from Faculty Senate officers read.

Howard administration says that the payments where necessary though to make sure the school maintained good leadership through transition.

“The University was very transparent with the community about retention agreements,” the University told the AFRO in a statement through Hamilton. “Our commitment to Howard’s growth, sustainability and enhanced position in the higher education community was the driving force behind our 2007 decision to ensure the continuity of senior leadership in critical areas and mitigate any potential risks for the University during a presidential transition.”

Throughout the struggle, Howard was able to maintain enrollment and has not received any decrease in federal funding directly to the school.

Schools in Maryland are feeling the pinch as well. Bowie State is one school that has had to deal with a tighter budget. Officials from the school say they’ve had to do more than just reallocate funds; they’ve had to figure out ways to generate funds in unique ways.

“All schools, not just HBCUs, are being forced to look at our existing resources and at the same time try to generate income by diversifying,” said Karl Brockenbrough, Bowie State vice president of administration and finance. “When I say that I mean applying for additional grants and other sources of funds to help meet our budgetary needs.”

Maryland as a state has been able to mitigate the storm better than others. Earlier this year, schools in the state were preparing for a possible doomsday budget which would have resulted in a $50 million reduction in funds. However, the state settled on a $5.3 million budget reduction, a price that Brockenbrough says the state’s schools can certainly cope with.

“The cuts to higher education in Maryland have not been as severe as the cuts to higher education in some of the surrounding states,” he continued.

In comparison, the state of North Carolina cut $414 million from its higher education system in 2011. Louisiana schools are bracing for an oncoming $66 million cut.

These cuts magnify the importance of organizations like the United Negro College Fund. When schools are unable to make do things like provide aid to students on verge of graduating, the UNCF helps close the gaps with its Campaign for Emergency Student Aid.

“It was set up for our 38 member institutions that have students are at jeopardy and are having to drop out,” said UNCF spokeswoman Joye Griffin. “Some of them may owe… $500 to $1,500 so we created this scholarship program so that students at our member schools could apply for that and get the money they need to cover the balances.”

The key to an institution’s financial health is the size and state of its financial endowment, the accumulated financial assets from donations or property that a school uses for investments. Only the interest is actually used by school for spending.

HBCUs, whose endowments were already much lower than traditional college and universities, had taken a big hit in 2008 and 2009. However, the fortunes of HBCU endowments have turned around a bit as schools including Howard and Virginia State saw an increase in their endowments in 2011, according to the National Association of Colleges and University Business Officers. Despite that, the 2011 endowment of a school like Harvard, whose endowment sits at $31.7 billion, is still 59 times that of Howard’s $539 million.

Moving forward though, officials say that HBCUs will have to be creative in sustaining themselves and thriving over the next 10 years.

“We urge our institutions to focus on working with other institutions in going after federal dollars,” Bartley said. “By that I mean maybe partnering with a community college or partnering with a larger public institution that would allow you to go after those competitive federal dollars.”

George Barnette

Special to the AFRO