Tag Archives: HBCU

“95 percent of colleges are tuition driven.” – Robert Franek, The Princeton Review

HBCU alumni and their alumni associations need to demand immediately to see the financials of their HBCU – this is of course assuming their alumni associations house is in order but that is another article for another day. At public HBCUs this is bit easier because of them being a state institution, but private and especially religious-based private HBCUs that effort can prove to be a lot more complicated. However, you do not need to wait until you see fire to call the fire department if you already smell smoke. The fire is there you just cannot see it yet. This is the harsh reality for America’s college business model and this should be the terrifying reality for HBCUs. Far too many colleges in America have unsustainable businesses models and nothing highlights how glaringly broken the model is like their acute reliance on tuition revenue and paltry or nonexistent endowment revenue.

How did we get here? For HBCUs this issue started at desegregation when well over 90 percent of college bound African Americans would matriculate through HBCUs. The Civil Rights Movement fundamentally changed that and struck a death by a thousand cuts to not only HBCUs, but African American owned and operated institutions in general over the past 50 years. We all know the saying about “their ice is colder” so and so forth. African American neighborhoods slowly collapsed, African American owned and operated hospitals have gone from 500 to 1, African American owned banks were at over 50 just 25 years ago now are at 16 – and falling, African American boarding schools once a mighty 100 now only have 4 remaining. HBCUs have not been spared either with the closures of St. Paul’s College, Knoxville College, Bishop College, and Lewis College of Business being the most recent closures over the past thirty plus years.

The reality of what started then for HBCUs saw its fuse lit for PWIs in 2008 amidst the Great Recession when the world economy and capitalism as we know it almost collapsed. As most of African America/HBCUs know, when European America/PWIs catch cold, we catch pneumonia, COVID, Spanish Flu, all while having no insurance or African American doctors. The Great Recession’s effects were many, but perhaps its greatest impact is that many families moving forward simply have chosen to opt out of having children. In the years following, America’s peak high school graduation class is set to graduate in 2025 (see chart below) and forecast of graduating classes thereafter begins a precipitous decline. This poses an extremely bleak outlook for African America whose 2024-2025 and 2025-2026 classes are nominally equal to the African American graduating classes of 2009-2010 and 2010-2011 where in all four graduation years the number of graduates was north of 470,000. The stark difference is that it has taken 15 years to recover to that nominal number all while the percentage of African Americans graduating peaked in 2009-2010 and 2010-2011 when African American high school graduates accounted for 15 percent of American high school graduates. Since 2010-2011, percentages have been declining and will struggle to reach 14 percent of American high school graduates in 2024-2025 and 2025-2026.

In contrast, the two groups who are seeing the most precipitous increase are Hispanic America and Asian America, both who by 2025-2026 will have seen their percentages increase for 27 years without interruption. It poses the question and conversation of whether or not HBCUs can remain predominantly African American for another day, but that day is sooner than later especially given that HBCUs only get roughly 10-12 percent of the college bound African Americans that graduate from high school. USA Today reports, “Yet while 67% of white high school graduates went directly to college in 2020, the most recent year for which the figure is available, 54% of Black high school graduates did, the National Center for Education Statistics reports. That’s down from 66% in 2010.” Needless to say African American education from Early Childhood Education through Graduate School simply does not appear to be trending in any positive direction. Taking 54 percent of approximately 470,000 leaves us with around 254,000 college bound African Americans for HBCUs and based on the 10-12 percent we recruit it means that only 25,000 are likely to find their way to the 100 HBCUs or 2,500 per school. The math as they say is not going to math if this holds true, especially given the reliance on tuition revenue.

According to Appily, “In the United States alone, there are more than 6,500 postsecondary Title IV institutions. Of these institutions, 2,189 of them are Title IV non-degree-granting. The rest are degree-granting, with 1,485 being 2-year colleges and 2,828 being 4-year colleges.” Our number to focus on is the latter number of 2,828 4-year colleges. Of that 2,828 we know approximately 100 are HBCUs or 3 percent. Appily also states that there are approximately 1,626 public degree-granting universities and 1,202 private degree-granting colleges. That means that overall, almost 58 percent of American colleges are public and 42 percent are private. For HBCUs, it is essentially a 50/50 split down the line when it comes to public/private. From a geographic standpoint, 331 4-year colleges are located in the Mid-Atlantic, 495 4-year colleges in the Northeast, and 457 4-year colleges in the Midwest according to CollegeSimply. This accounts for 45 percent of the 4-year colleges in the entire country. On the contrary, HBCUs are highly concentrated in the Southeastern part of the United States which is something of a doubled edged sword. Birth rates in the aforementioned PWI geographic strongholds post-Great Recession are where the highest concentration of concern are so this is a plus, but HBCUs while not predominantly located in those areas are located in predominantly in the Southeast where high school gradation rates are the lowest among all regions in the country and where the states with the highest poverty rates are concentrated. So while the population demographics may not be an issue the ability to afford college most certainly will be and with HBCU endowments being what they are that will be even more magnified. The real question then becomes who is most at risk.

It would be far too elementary to say that simply having a large endowment is an indicator, but as a starting point let us see where that takes us. NACUBO’s 2022 Endowment Study reports 136 public/private colleges/universities in America with endowments over $1 billion – there are no HBCUs. We could even go a step further and look at endowment value per full-time student (see below) gives us a bit more insight. It shows that a university such as Princeton for instance that cost around $85,000 per year to attend that the university would need an endowment of $1.7 million per student to allow a student to attend for free. As we see, Princeton’s endowment value per full-time student is almost $4.1 million which far exceeds the coverage needed. Spelman College is the leading HBCU in endowment value per full-time student at $218,792 (see below) but based on their almost $50,000 per year cost of attendance it needs approximately $1 million per student to allow a student to attend for free. So we see the stark difference in endowment coverage for its full-time students between Princeton and Spelman, the leading PWI and HBCU, respectively.

It is also worth noting the drop between Princeton and Harvard is a 51 percent drop while Spelman to Howard is over 65 percent highlighting just how scarce the resources per student even within the top HBCUs versus their PWI counterparts. This is vital to note because endowments fund far more than student scholarships. They fund professor salaries, research, utilities, and so much more. Endowments returns are also rarely fully available to the operations side of the university to use. Most universities, especially the larger endowments, reinvest a significant amount of their endowment returns back into the endowment. A controversial practice for many who feel like multibillion dollar endowments should be used to battle the college inflation cost. That though requires an institution to have a multibillion endowment to argue about. Again, no HBCU has even $1 billion let alone multiple.

Like most African American individual and household statistics the outlook and trendlines look bleak, but most of us do not know or interested in what the data says. African American institutional outlooks and trendlines are not immune and given institutions weight on individual and household outcomes their trendlines tend to be the vanguard or foreshadow of the future. However, all hope is not lost. HBCU alumni and alumni associations must realize this is an emergency. It was an emergency yesterday, it was an emergency ten years ago, and it was an emergency fifty years ago the moment the seed of desegregation was planted. Waiting on the benevolence of ‘The Double-Edged Sword of White Philanthropy’ is not a sustainable answer or strategically sound. The question now is what is the strategy and possibility ahead.

HBCUs and their proxies lack targeted and developed pipelines that A) are improving the K-12 outcomes of African American students B) ensuring that those that do graduate are coming to HBCUs. For HBCUs that still care about being dominant African American institutions there is a roadmap they can follow. The directory from Black Minds Matter list 461 African American owned schools that span K-12 that provide at the very least a starting pool to develop. This means HBCU alumni must invest to ensure that these schools thrive and that students ultimately find their way in a pipeline that ends in both HBCU undergraduate and HBCU graduate schools. Donating to these K-12 African American schools has a myriad of echo effects: more HBCU teachers hired, develop the curriculums and institutional learning of tomorrow that prioritizes attending HBCUs, purchase supplemental equipment like new technology, ensuring our children are properly nourished, and more. All of this investment and engagement should ultimately lead to moving the African American selection of HBCUs above and beyond the paltry 10 percent we now have of African American bound college students and perhaps can reignite the high school graduation rates.

The other conversation we need to have, albeit a very uncomfortable one is HBCU mergers, creation of HBCU systems, and new institutional formations that may allow us to be more financially sustainable. For instance, Fisk and Meharry are quite literally across the street from each other. Public HBCUs in each state merging underneath a joint system while the campuses remain separate. Or at the very least creating shared foundations, i.e. The (insert state) HBCU Investment Foundation that would manage the endowments and institutional development of all the HBCUs in that state collectively. For once we have to be aggressively proactive and not wait until crisis is upon us and be our usual reactive. Far too many of our HBCUs simply will not survive and those that do will be left on islands and in a collectively weaker state to battle external forces that we know would prefer African American institutions go away all together.

In order for HBCUs to survive for another century enrollment has to start trending upward and hyperbolically. We must also make some hard choices about what we are choosing to spend our limited institutional money on. Should our athletics move down a division to save millions? Probably, especially if that money can be used to strengthen our endowments, reduce student loan debt so our graduates can build wealth faster, and invest in the K-12 pipeline. This and many more hard conversations need to be debated and discussed among HBCU alumni immediately. We are late, but we are not too late. Decisive actions need to be taken to put far more of our schools on sound financial footing and increase the pipeline of students coming in and the endowment value per full-time student. Otherwise, we maybe seeing a lot of HBCUs being read their last rites.