NASHVILLE, Tenn. (WTVF) — Tennessee State University is implementing major changes in an effort to safeguard the future of the historically Black university. University officials report an urgent financial situation that threatens the institution's stability, during a Board of Trustees meeting.
TSU, a key part of the community that makes Nashville special, has faced numerous challenges over the years. Interim President Ronald A. Johnson acknowledged that the school's future is uncertain.
“In 2019, an external review commissioned by the university highlighted crucial issues including misalignment of staff and faculty, and the need for operational and organizational improvements,” Johnson said during a recent board of trustees meeting.
The university, in collaboration with a consulting firm, Alvarez & Marsal, provided further explanation for the financial difficulties. Jim Grady, managing director at the firm, pointed to how TSU utilized funds from the federal Higher Education Emergency Relief Fund (HEERF), such as providing scholarships to students.
“What happens in 2022... that $72 million number you see in net tuition—there’s about $37 million of HEERF in that," Grady explained. "So, when the HEERF money was no longer available in 2023, we had to apply a higher level of discount in 2023 and 2024.”
Grady added that some students were left with outstanding balances after the federal funds ran out. “If I was a student in 2022 and was granted a scholarship paid for by federal funds that went away in 2023, you fast-forward to 2023, and either you’re on the hook for tuition or the institution has to provide a discount," Grady said.
Grady noted that while many other institutions faced similar situations, they managed their spending more effectively than TSU. “In addition to not having very strong policies and procedures on handling scholarships, there wasn’t a plan for when the money ran out,” he said.
President Johnson stated that spending has exceeded income for some time, particularly over the last two fiscal years, prompting immediate action.
“We’re implementing a hiring freeze across the university, a spending freeze on non-essential expenditures, and strategic realignments," Johnson said. "This includes workforce adjustments and cost-saving measures to enhance efficiency and adhere to our budget.”
An information session will take place Monday afternoon where employees will learn more about the financial plan, the hiring freeze, and the changes being made. The Board of Trustees, now composed entirely of TSU alumni after a state-mandated overhaul, will also be involved in these efforts.
Do you have more information about this story? You can email me at aaron.cantrell@newschannel5.com
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