Magazine article Black Issues in Higher Education

South Carolina State Pursuing Solvency

Magazine article Black Issues in Higher Education

South Carolina State Pursuing Solvency

Article excerpt

South Carolina State Pursuing Solvency: Controversial loan from University of South Carolina part of remedy

ORANGEBURG, S.C. -- Four years of operating in the red finally forced South Carolina State University to borrow $2.1 million from another state institution. But it appears the historically Black institution may be able to avoid that problem next year.

SCSU has reorganized and laid-off twenty-six employees. Additionally, almost twenty employees have also been reassigned to other positions at the university. Add an 8 percent increase in student fees to the equation, and the institution possibly could be looking at a financial surplus by the end of next year.

The money to repay the loan is in the 1998-99 budget, which was approved last month by the university's Board of Trustees. The increase in tuition and fees should cost in-state students an additional $250 per semester to attend the 102-year-old institution.

"Based on the university's cost cutting measures, and with the inclusion of additional revenues, the end of the 98-99 fiscal year may show a $400,000 budget surplus," said S.C. State President Leroy Davis Jr. "If so, it will be the first time in four years that S.C. State will end a fiscal year with a balanced budget."

To meet its year-end payroll, SCSU requested the appropriation from the state General Assembly and asked permission to enter into a loan with a local bank. Then in June, the state's Budget and Control Board requested $2.1 million from the University of South Carolina (SCU), a state agency that had a budget surplus.

"It is important to note that never at any time in this process did S.C. State approach or ask USC to provide funds to cover the university's budget deficit," Davis said.

Since the Budget and Control Board negotiated the deal, rumors have swirled that there is a plan to make S.C. State one of USC's satellite campuses. However, officials from both schools deny it.

USC agreed to the loan, but both President John Palms and a number of trustees made it clear they didn't especially like the idea.

"I don't think it's good policy to do this," Palms said the day the trustees approved the deal. "It's only for emergency situations."

Indeed the situation at S.C. State is an anomolous one, according Bracey Campbell, a spokesperson for the Southern Regional Educational Board. …

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