Fisk University narrowly avoids $3 million deficit amid FAFSA, enrollment woes

Fisk University projected it would accrue a more than $3 million deficit over the summer unless Nashville leaders approved its request to repurpose pandemic relief funds.

The Tennessean obtained a projection of the historically Black university's cash flow that it submitted to city officials this spring as it asked to redirect around $8.5 million in federal relief grant funds — a request that was ultimately approved in a 35-1 Metro Council vote on June 4. The document showed Fisk would have more money going out than coming in by July if nothing changed.

It mapped out a quickly diminishing financial situation split across things like payroll, utilities, operations and debt payments. The school projected it would be over $1.8 million underwater in July, with a nearly $3.3 million deficit by August. The projection also showed the deficit dropping to $2.5 million in September before returning to a positive cash flow over the following six months.

A 'very precarious position': Nashville OKs use of COVID-19 relief funds to stabilize rocky Fisk University finances

Fisk President Agenia Clark, who took on the role in November , said her focus from the start has been building long-term financial stability at the 158-year-old school situated northwest of downtown Nashville.

She said its financial challenges stem from continued fallout from the pandemic, emergency maintenance costs and the delayed and issue-ridden rollout of the Federal Application for Student Aid, or FAFSA.

"We are in a stage of 'not knowing' and that is very uncomfortable for a small university that is tuition dependent," Clark told The Tennessean. "Fisk has been making progress to overcome these challenges and appreciates Metro’s grant expansion which provides a bridge to this accomplishment."

A $10 million federal grant

During the pandemic, the city of Nashville was tasked with disbursing grants from the federal American Rescue Plan Act to public and private entities alike.

A $10 million grant from that fund to Fisk was earmarked to renovate the university's historic Burrus Hall. The plan was to turn it into a center for entrepreneurship, with hopes of bolstering the Black community on campus and across the city.

The school already put $1.5 million of the funds toward the project when it went before the city's COVID-19 Financial Oversight Committee on May 15 to ask permission to reallocate the grant. It's not clear when Fisk will resume work on Burrus Hall, which was renamed the Darrell S. Freeman Sr. Incubation and Innovation Center when the project launched in January 2023.

The university's request to redirect the grant money came as its fiscal year drew to a close, with a new one starting July 1.

Here are the main issues Fisk leaders cited as they sought to redirect the remaining $8.5 million in federal dollars to address immediate financial needs.

FAFSA delays

A federal overhaul of the FAFSA meant to streamline the process instead led to months of delays and issues that left millions of students in Tennessee and nationwide in limbo . The form is a critical piece in determining how much federal aid students qualify for, which in turn informs colleges and universities how much in scholarships, grants and other aid they may need. Without the FAFSA, schools cannot complete enrollment for students in need of aid.

Additionally, more than 60% of Fisk's students depend on the federal Pell Grant, according to an overview provided by a university spokesperson. That means the university depends on students who enroll with federal funding that was delayed so long that it may keep students from enrolling this year.

Compounding FAFSA issues have left Fisk without a clear picture of how many students will enroll this fall — something university leaders say may not be cleared up until well into the new semester, which starts Aug. 14.

FAFSA delays: Tennessee colleges uncertain of impact on enrollment, finances

Emergency maintenance

The explosion of a sewer pipeline in December 2023 in Jubilee Hall on the Fisk campus led to "unexpected and exorbitant" costs, according to Clark. The repairs have further strained the university's resources.

"With a campus that's more than 150 years old, there are unexpected challenges that cannot be forecasted," she said.

She did not say how much the repairs cost.

A lack of deep reserves

Despite a storied and often-celebrated history and a reputation for strong academics, Fisk has faced its share of financial challenges over the years, which landed it on academic probation more than once. It's also seen a string of presidents come and go.

However, Clark insists the school is financially stable, even with its recent setbacks. Enrollment data from the university also showed the student body has grown in recent years. The most recent enrollment data on the university's website shows that 1,007 students were enrolled as of fall 2022, up from 743 in fall 2018.

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What's next for Fisk

Clark said she appreciates the advocacy and support of city leaders, including Mayor Freddie O'Connell, as the school navigates its financial challenges. She also said she has been hard at work seeking community partnerships, philanthropic gifts and alumni giving in her first several months at the helm of Fisk.

One of those partnerships is with the Nashville Entrepreneur Center. The university will lean on that partnership to make sure the original plan for the pandemic relief money is fulfilled once the school regains its footing.

"As the new president, and a Nashvillian, along with a dedicated board of trustees, we are all rallying to assure that the Music City does not lose sight of what makes Metro so attractive to those who visit and those who choose to make this home," Clark said.

The university did not provide details on exactly how $8.5 million in repurposed federal funds will be used, but said they provide a "short-term bridge" as it launches new fundraising and operational strategies. Clark is also spearheading the creation of a new campus master plan that will include enrollment, facilities, growth and academics, among other things.

"Working with Metro, the Fisk staff and board are excited to be moving forward with the expansion of the usage of Metro COVID-era funds provided through this grant," a document provided by the university said. "Metro’s expansion of the purpose for these COVID-era funds is a vote of confidence that the strategy for Fisk’s future is an imperative for Metro Nashville and the students that attend Fisk."

Reach children's reporter Rachel Wegner at RAwegner@tennessean.com or follow her on Twitter @RachelAnnWegner.

This article originally appeared on Nashville Tennessean: Fisk University narrowly avoids $3 million deficit amid FAFSA, enrollment woes