Arkansas college seeks savings as enrollment tumbles

Pay, other cuts loom for Arkansas Baptist

Arkansas Baptist President Joseph Jones.
Arkansas Baptist President Joseph Jones.

Faced with a fall-to-spring enrollment drop, Arkansas Baptist College is instituting cost-cutting measures this month, including employee pay cuts.

The Little Rock college saw a 247-student enrollment decline with 606 enrolled this spring. That follows a one-year, 12.7 percent drop from the 966 students the college had in fall 2015 and a five-year, 22.1 percent slump from the 1,082 students enrolled in fall 2012.

The private, historically black university relies almost entirely on tuition for operating costs, President Joseph Jones said Friday. Because of the enrollment decline, starting this month the college will reduce pay, implement a hiring freeze, cut overtime hours and limit travel, he said. Those measures will continue through May, when the college's board will decide whether to expand on them.

"Being on the job seven months -- not even a year in -- as a new president, I have all these ideas ... I want to see come to fruition," Jones said. "It's pretty taxing. But our future is bright. Moving forward, we're setting up some things that are really going to stabilize the campus."

Arkansas Baptist was the only one of the four historically black colleges and universities in the state that saw an enrollment decline from fall 2015 to fall 2016, according to the state Department of Higher Education. The University of Arkansas at Pine Bluff's enrollment rose 6 percent to 2,821 students, while Philander Smith College's enrollment rose 31 percent to 765 students. Shorter College in North Little Rock jumped nearly 73 percent to 408 students.

In total, enrollment at the 13 independent colleges and universities in the state fell less than 1 percent from 16,626 students in fall 2015 to 16,524 students in fall 2016.

Jones held a campuswide meeting Friday afternoon about the enrollment changes and how they will affect the college's budget. Some had questions about enrollment, while others asked about the scale of the pay cuts, he said.

The college's 211 part-time and full-time employees will be notified of the changes and where they might fall in letters next week, he said. The pay cuts will be staggered depending on how much employees currently earn.

Jones will take the biggest hit, losing 30 percent of his salary. Salary information for private universities is not typically available. Because he started in September, Jones' salary will not be reflected in past IRS Form 990s, which show a nonprofit's finances. The college's board policy does not allow him to reveal his salary, he said.

Past President Fitz Hill earned a base salary of $270,824, according to the school's 990 report from 2015, which covers the period of July 1, 2014, to June 30, 2015.

Vice presidents at the college -- who earn between $80,000 and $105,999 -- will take a 20 percent cut. The university said that those earning between $60,000 and $79,999 will see a 16 percent cut; between $40,000 and $59,999, a 12 percent cut; between $30,000 and $39,999, an 8 percent cut; and between $20,000 to $29,999, a 4 percent cut.

Employees earning $20,000 or less will not be affected.

Faculty and staff were appreciative that the college's administration was forthcoming about the financial situation of the institution and its transparency in the cost-saving measures, said faculty senate President Roberta Clark, adding that she was optimistic about the school's future.

"I think that under President Jones' leadership ... he has a strategy and a plan for stabilizing our institution financially, growing our institution academically and making sure Arkansas Baptist will be around for a long time," she said.

The college has hired Yvette Wimberly as dean of retention and persistence, a role in which she is in charge of creating a plan to increase enrollment and retention numbers.

Of the 168 first-time, full-time students enrolling at the school in fall 2009, just more than half enrolled the next fall and 29.2 percent enrolled in fall 2011, according to Higher Education Department data. Only 13 percent of that group enrolled in fall 2012, data show.

Many Arkansas Baptist students enroll to earn an associate degree and often transfer to another institution, Jones said.

But the four-year university plans to add more degree programs -- including in education, business management, science, technology, engineering and mathematics, Clark said -- so students will no longer have to transfer to another institution to get certain degrees. The university will also begin offering online courses this summer.

The college plans to ramp up its recruitment and fundraising efforts in the fall. It has already formed partnerships with community colleges in California, which will allow eligible students to transfer to a historically black college or university. It is also working with the Kansas City chapter of the National Our Kids Program, which aims to help bridge the gap between law enforcement officials and black children and has started recruiting students for colleges.

"We're opening up new markets to really bring more students," Jones said.

The college was once at risk of losing its accreditation by the Higher Learning Commission, in part because of questions about whether the college could meet its financial obligations and whether its leaders could fulfill its institutional mission.

For several years, the college faced what Hill, the former president, called "cash flow problems." The commission had received complaints from students and staff about delays in receiving financial aid and paychecks from the college. Vendors also had complained about the college's outstanding debt.

That debt led to several civil lawsuits in which companies demanded payment.

But those were dropped when in December 2014 the college received a $30 million federal loan guaranteed through the U.S. Department of Education. The college used part of the loan to pay its two biggest debts, totaling $25.6 million, to two local banks. Revenue from student tuition and future capital campaigns will repay the federal loan, college officials have said.

In November, the accrediting agency let the college keep its accreditation but subjected it to monitoring because of concerns about teaching and planning.

As of December, the federal Education Department still listed the college on "Heightened Cash Monitoring II" status because of "administrative capability."

Typically, higher education institutions receive federal student aid funds on an "advance pay" or "direct reimbursement" basis from the federal Education Department. If an institution has been placed on Heightened Cash Monitoring II, the funds are released to the school after it has made the disbursement to the student or parent borrower, and the school must submit manual reports, slowing the college's cash-flow process.

Arkansas Baptist is still resolving some of its debt and plans to ask the federal Education Department later this year to be taken off the list, Jones said, adding that he plans to release a financial recovery report this summer.

"In that, we're going to basically explain the position that we're in, and then we're going to talk about what we'll be doing in the future to make sure we're not in this position going forward," Jones said. "And that's something very, very important to me, to kind of build the confidence to our stakeholders and students and everybody else to say, 'Look. We're going in a different direction, and this is how we're going to do it.' Not just fluff and talk, but a very clear, strategic way of bringing revenue in, cutting costs and doing all of those things."

Metro on 03/11/2017

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