Tag: 15M

  • Albright College declares ‘remarkable’ turnaround as it borrows $15M from endowment

    Albright College declares ‘remarkable’ turnaround as it borrows $15M from endowment

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    Dive Brief:

    • Albright College is set to borrow $15 million from its $65 million endowment after receiving approval from its board of trustees. 
    • In a Monday statement, the private Pennsylvania institution touted the board’s sign-off on the loan as a show of “confidence in Albright’s direction” and said it plans to use the capital to “strengthen the College, enhance enrollment, and secure Albright’s future.”
    • Albright projects a $10 million operating surplus for the 2025-26 fiscal year after recent years of expanding deficits and concerns about cash levels.

    Dive Insight:

    Borrowing from an endowment is often a red flag that a college is burning through its last available resources. In Albright’s case, the college says it is using the money to solidify a long-term turnaround. 

    Not long ago, the college was issuing signs of distress. When it requested legal permission to tap its endowment for capital, Albright noted that its net assets took a $46 million hit between 2022 and 2024. That pushed the college to take “significant measures to lower its deficit,” including cutting 53 employee positions, according to a Spotlight PA report. 

    In fiscal 2023, Albright reported a $20.3 million total deficit, well more than double the prior year’s deficit. Its deficit rose even higher, to $23.1 million in fiscal 2024. 

    Those fiscal woes followed years of enrollment declines. Between 2018 and 2023, fall headcount shrunk by nearly 15%, according to federal data. 

    For 2025, the college has 1,150 students, an increase of about 50 students compared to last year, while first-year and transfer enrollment increased 21.5% to 469 students, according to an Albright spokesperson.

    As it sought capital to fund a turnaround, the college couldn’t find a bank loan with manageable interest rates. And so it turned to its endowment.

    The $15 million loan will be drawn down as needed and “comes with a clear repayment plan that includes defined terms, scheduled payments, and quarterly reporting for full accountability and transparency,” Albright said. Per the authorization terms, the repayment period extends 20 years and the loan will carry a minimum of 3% interest. 

    It’s also being combined with major new gifts as well as $4 million in grant funding from the state Redevelopment Capital Assistance Program, according to the release. 

    With the new funding, Albright is investing in capital projects and deferred maintenance. The “centerpiece” of those improvements, it said, is an expansion and renovation of the college’s central library. The building, which is over 60 years old, will get a student support and disability center, a writing and tutoring center, expanded cultural and technological resources, new conference space and a cafe. 

    With the investments, budget stabilization and recent enrollment growth, Albright sounded a triumphant note in announcing the loan, describing a “remarkable financial turnaround” and gearing up for growth ahead.

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  • Talladega College lands $15M loan as it cleans up its finances

    Talladega College lands $15M loan as it cleans up its finances

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    Dive Brief:

    • Talladega College has secured a $15 million loan to help the institution as it tries to right its finances after recent years of enrollment declines. 
    • In a Tuesday news release, leaders of the historically Black college in Alabama described the working capital loan from Hope Credit Union as a sign of confidence and an investment in the institution. The proceeds will be used to help Talladega refinance its debt and pay vendors.
    • The college has made other moves to shore up its finances as well, including cutting athletics programs, ramping up collections on unpaid tuition, folding some vacant employee positions into other roles and working with a third party to boost enrollment, officials said at a press conference last week. 

    Dive Insight:

    At a press conference last September, Talladega officials acknowledged the steep financial challenges facing the college after double-digit declines in enrollment in recent years on top of rising expenses, particularly in staffing. 

    One of the main causes for concern was the college’s struggle to make payroll that spring — typically a sign of deep distress that can send institutions into a tailspin. Shortly after the cash issues surfaced, Talladega’s then-president resigned, as did its chief financial officer. 

    Since then, the college has pared down its expenses, including by shuttering sports programs, which has garnered the institution plenty of media attention. 

    In a February editorial, Talladega Interim President Walter Kimbrough, who joined in June, noted that the college under his leadership has cut four sports programs “that all began in the last 3 years without any plan for funding,” which he described as “bad decisions, point blank.”  

    He also addressed the decision to cut Talladega’s gymnastics program, which lost the college significant amounts of money. 

    “One of my first tough decisions was to end gymnastics, a feel-good program that cost almost $400,000 and generated no revenue,” Kimbrough wrote. “Just from a practical perspective, we did not have a place for our gymnasts to train, which meant traveling to Trussville three days a week for practice, adding to costs.”

    Perhaps the college’s largest source of financial pain, though, has been its shrinking student body. Between 2018 and 2023, Talladega’s fall headcount dropped nearly 31% to 837 students. That decline has brought revenue pressure with it. Just between fiscal years 2022 and 2023, net tuition and fee revenue fell by just under $1 million to $5.6 million. 

    Talladega leaked money in other ways as well. At the April press conference, Kimbrough noted the college had not previously employed a debt collection agency to recoup unpaid tuition and fees. 

    Since the fall, a team of staff from across the university has worked to reach out to students to reduce the college’s bad debt — moving the figure from $1 million down to under $100,000 “in a couple of months,” Kimbrough said. 

    To help boost enrollment, Talladega has recently worked with a marketing firm that has done some pro bono work looking at ways the college can stand out, Kimbrough said. 

    Providing a loan to the college was “a no brainer,” Bill Bynum, CEO of Hope Enterprise Corp. and Hope Credit Union, said at the April press conference. Bynum noted Talladega leadership had what he called a “clear strategy” for moving the institution forward. 

    “Pound for pound, no one does more with less than HBCUs,” Bynum added. “So it’s a bet that we’re glad to make.”

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