After years of financial struggles, Guilford College faces another deadline: raise another $1.25 million by the end of June or face the loss of academic accreditation for the 188-year-old private Quaker College in Greensboro.
For now, trustees of the private liberal arts college haven’t declared imminent financial exigency, a move that would allow the layoff of tenured faculty. Instead, trustees have given the budget and faculty committees until next week to whittle expenses in a spending plan for the fiscal year starting July 1. It needs to meet the requirements of the Southern Association of Colleges and Schools Commission on Colleges, the accreditation organization, and bondholder covenants, according to a resolution adopted by trustees earlier this month.
“Due to the (accreditation) requirements…and the very short time remaining to meet them, we are between the proverbial rock and a hard place with balancing our FY26 budget,’’ acting President Jean Parvin Bordewich wrote in an email yesterday updating the college’s financial peril. It “will almost certainly require additional expense cuts to offset an anticipated dip in enrollment revenue.’’
In recent months, the ”Good for Guilford’’ campaign has raised $3.75 million in unrestricted cash toward the $5 million goal. Gatherings are scheduled to increase alumni giving. “A donation of any amount counts,’’ Bordewich said, urging donations by next Monday, June 16.
Many colleges and universities face increasing financial pressure as the number of high school graduates declines and more students opt for other careers. St. Augustine’s University of Raleigh has seen its enrollment plummet to about 200 from 900 in the past year, while St. Andrews University in Scotland County closed in May after years of declining enrollment.
Guilford started as a co-educational boarding school in 1837. Founded by the Religious Society of Friends, or Quakers, it evolved into a four-year liberal arts college rechartered as Guilford College in 1888.
The oak-shaded campus is steeped in history. It is adjacent to New Garden Friends Meeting, the Quaker church, New Garden Friends School and Friends Home, a nursing and retirement community dating back nearly 70 years. Buried in the church’s cemetery are American and British soldiers who died after the Battle of New Garden and the Battle of Guilford Courthouse during the Revolutionary War. The wounded on both sides got medical care in the meeting house.
“These days, I often find myself caught between the excitement over the incredible progress we have made in five short months and anxiety over the difficulty of quickly reaching financial stability that is essential to our continued accreditation,’’ Bordewich said.
The college projects a surplus of about $2 million in the current year’s operating budget, excluding non-cash expenses such as depreciation and the write-off of bad debt, Bordewich explained in an email last month. Accreditation requirements mandate the college to “have balance (or a surplus) also in the accrual budget,’’ she said. ”The $2 million surplus helps, but depreciation of $5.6 million puts the accrual budget back in the red.’’
If needed, trustees plan to permit the redesignation of some money in the school’s endowment to cover depreciation. ”In future years, we must have enough income from operating revenue to cover not only cash expenses, but non-cash expenses like depreciation and bad debt as well,’’ the president said.
In a step to reduce expenses last month, Guilford restructured bank debt by paying off a $3.3 million term loan, lowering the interest rate and renewing the line of credit for 12 months, Bordewich said. It will reduce debt service by $1.3 million next fiscal year.
Scrambling financially isn’t new to Guilford. Bordewich is the college’s fifth president in five years, as predecessors grappled with declining enrollment, rising costs and debt service on the issuance of $73 million in bonds between 2016 and 2018.
The projection that bond spending on campus improvements would boost enrollment didn’t pan out. The college’s enrollment has tumbled nearly 40% in the past eight years, according to a May article by The Assembly.
Enrollment is 1,429, according to the latest tally posted on Guilford’s website. Among them are high school students attending the nationally recognized Early College.
The onset of the pandemic worsened Guilford’s budgetary problems, leading to the threat of faculty layoffs and the elimination of some majors. The proposals angered faculty and staff, spurring emergency fundraising by alumni that bought Guilford more time to work out its financial woes.
The accreditor put Guilford on probation in 2023, due to a failure to meet financial requirements. It gained an extra year of probation, giving it until this month to balance its current budget and produce a balanced budget for next year.
