I have written often about Eastern Gateway Community College, formerly in Steubenville, OH. EGCC made history last month by becoming the only Ohio publicly funded higher education institution to close its doors. The story behind its failure is shocking, if only because the State of Ohio, the US Department of Education, the Higher Learning Commission, and Jefferson County put so many guardrails in place to prevent this kind of disaster. Unfortunately, the same guardrails that didn’t protect EGCC haven’t protected Central State University either. CSU is Ohio’s only HBCU-designated higher education institution.
Last month, CSU – which also participated in the “Free College Benefit” program – learned that the Ohio Higher Education Department has placed the school on “fiscal watch.” That’s the same standard whose painfully late application by OHED failed to make a difference for EGCC. In EGCC’s case, this standard wasn’t applied until after EGCC’s trustees had acknowledged that the school’s demise was inevitable.
In a statement published on the OHED website, OHED Chancellor Mike Duffey blamed CSU’s failure in part on the pandemic. Central State President Morakinyo A.O. Kuti, who became Central State University’s president in July, blamed the school’s financial difficulties on the fractured “partnership” with Eastern Gateway Community College.
Before the US Department of Education ordered the Free College Benefit program halted, students could transfer from EGCC to CSU to pursue a bachelor’s degree using the same program to pay for their tuition. Once EGCC terminated its program, the stream of EGCC’s Free College Benefit transfer students dried up, leaving Central State University with expenses but no corresponding revenues.
This isn’t Central State University’s first trip through fiscal watch. OHED placed the school on monitoring status in 2015. The school exited the fiscal watch status in 2017, the same year EGCC adopted the “Free College Benefit” program.
CSU’s online education exposure is substantial
Under the latest order, CSU has three years to straighten out its fiscal house. To date, the school fired its former Chief Financial Officer. Its interim CFO discovered a range of financial irregularities that the school’s administration was previously unaware of. Kuti informed OHED of the university’s newly discovered financial problems, which triggered the elevated monitoring status.
In addition to replacing the CFO, the school has replaced leadership positions in other key areas, including academics, IT, and admissions. It has also reduced staffing in certain areas aimed at reducing costs.
The problem with this system is that it relies on the institution to self-report financial problems. OHED doesn’t conduct any independent analysis of an institution’s financial status. Likewise, the Auditor of State does not independently verify a higher education institution’s financial condition. The Higher Learning Commission re-accredited CSU for another 10 years with no mention of concern regarding the school’s financial status in June 2023, the same month that the US Department of Education placed the university on Heightened Cash Monitoring-1 status. It remains there today.
The same “guardrails” that failed EGCC will fail CSU.
In the school’s 2017 report to the US Department of Education, Central State University described its FTE enrollment as 1,631 undergraduate students and 4 graduate students, with 4 students enrolled exclusively in online courses. In 2023, it reported its enrollment as 4,548 FTE undergraduate students and 25 graduate students, with 4,399 students enrolled exclusively in online courses.
CSU’s most recently reported graduation rate is 31%, and graduates earn less than $34,000 on average. Six out of ten students don’t return after the first year.
The relentless pursuit of revenue from online education certainly hasn’t done EGCC or CSU any favors, has it?
Photo Credit: Jimmy Emerson, DVM , via Flickr
