Saint Augustine's University Files for Chapter 11 Bankruptcy Amid Accreditation Fight

Key facts

• Saint Augustine's University filed for Chapter 11 bankruptcy on Monday in the Eastern District of North Carolina.
• The university estimates assets between $100 million and $500 million and liabilities between $50 million and $100 million.
• The IRS is the largest creditor, owed $14.4 million; the North Carolina Department of Revenue is owed $1.6 million.
• Other federal agencies, including the Department of Education, are owed $7 million.
• The American Trust Company is owed $3.3 million, tied to employee retirement accounts.
• Former student Adam Aiken says the university owes him about $8,000 from his G.I. Bill benefits.
• In January, the university began working with fair-lending advocate Self-Help to manage its debt.

A Historic HBCU Seeks Court Protection

Saint Augustine’s University, one of the oldest Historically Black Colleges and Universities in the United States, has filed for Chapter 11 bankruptcy in the Eastern District of North Carolina. The filing, submitted Monday, allows the institution to reorganize its debts while continuing operations. The university’s Board of Trustees made the decision, describing it in a Tuesday press release as “a deliberate and strategic step to advance the University’s long-term sustainability while addressing current financial realities.” The court-supervised process, the university said, will enable it to organize its financial affairs in an orderly and transparent manner.

Mounting Debts and Creditor Claims

According to court documents, the university estimates its assets at between $100 million and $500 million, while its liabilities range from $50 million to $100 million. The largest creditor is the Internal Revenue Service, which is owed $14.4 million. The North Carolina Department of Revenue is owed $1.6 million, and other federal agencies, including the Department of Education, are owed $7 million. The American Trust Company, which manages employee retirement accounts, is listed as owed $3.3 million. The filing also reveals that the university faces multiple lawsuits and has been struggling with millions of dollars in debt.

Students and Former Students Left in Limbo

Adam Aiken, who attended Saint Augustine’s from 2021 to 2023, said the university owes him about $8,000 from his G.I. Bill benefits. “Even when I was there, you saw every semester things starting to go down from there,” he recalled. Aiken said he received a check for his G.I. Bill the first semester, but by the second, rumors about the school’s financial troubles began circulating. He hopes to eventually recover all of his money. The university’s financial crisis has been years in the making, with declining enrollment and accreditation challenges compounding its troubles.

Accreditation Fight and Legal Battles

Saint Augustine’s has been fighting to remain open amid a protracted accreditation dispute. The university’s accreditation was threatened, leading to a series of lawsuits and appeals. The bankruptcy filing comes as the institution seeks to stabilize its finances and secure its future. In January, the school had begun working with Self-Help, a fair-lending advocate, to address its debt. The partnership was seen as a potential lifeline, but the bankruptcy filing indicates that more drastic measures were necessary.

What Chapter 11 Means for the University

Chapter 11 bankruptcy allows an organization to reorganize its debts while continuing to operate. For Saint Augustine’s, this means it can propose a plan to repay creditors over time while maintaining academic programs and campus operations. The process is expected to provide breathing room as the university negotiates with creditors and seeks new sources of funding. The university’s statement emphasized that the decision was made to advance long-term sustainability, suggesting that the board views bankruptcy as a tool for survival rather than a prelude to closure.

Uncertain Future for a Historic Institution

Saint Augustine’s University was founded in 1867 and has played a significant role in educating African American students for more than 150 years. Its financial struggles reflect broader challenges facing small private HBCUs, which often operate with limited endowments and rely heavily on tuition revenue. The bankruptcy filing does not guarantee the university’s survival. It must now navigate a complex legal process while maintaining the confidence of students, faculty, and donors. The outcome will be closely watched by the higher education community and alumni who hope to see the institution endure.

A Test of Resilience for HBCUs

Saint Augustine’s bankruptcy is the latest in a series of financial crises to hit historically Black colleges. While some have recovered through mergers or state support, others have been forced to close. The university’s ability to emerge from Chapter 11 will depend on its success in restructuring debt, boosting enrollment, and restoring its accreditation. For now, the institution remains open, but the road ahead is fraught with challenges. The bankruptcy process will unfold over the coming months, with creditors and the court determining the university’s fate.

The bottom line

• Saint Augustine’s University filed for Chapter 11 bankruptcy on Monday, listing assets of $100–500 million and debts of $50–100 million.
• The IRS is the largest creditor, owed $14.4 million, followed by the North Carolina Department of Revenue ($1.6 million) and other federal agencies ($7 million).
• The university owes $3.3 million to the American Trust Company for employee retirement accounts.
• Former student Adam Aiken is owed about $8,000 in G.I. Bill benefits, reflecting the impact on individuals.
• The university has been working with Self-Help, a fair-lending advocate, since January to manage its debt.
• Chapter 11 allows the university to continue operating while reorganizing its finances, but its long-term survival remains uncertain.