The University of Saint Augustine has been struggling financially for years.
Saint Augustine University Office of Marketing and Communications
Saint Augustine University filed for bankruptcy Tuesday, a move university officials say is necessary to address “current financial realities” and plan a path forward for long-term sustainability.
The University of North Carolina owes more than $14 million to the Internal Revenue Service and $8 million to other government agencies, according to court records. In all, SAU said it owes between $50 million and $100 million and estimates it has more than 200 but fewer than 1,000 creditors. The university has assets of $100 billion to $500 billion, according to the bankruptcy filing.
The troubled private black university has struggled for years, struggling to stay accredited as enrollments and facing complaints from lenders, governments and vendors about missed payments. Officials say the university is not closing and plans to continue offering certification and debt relief programs while the fraud program continues. (Filing for bankruptcy means the university will automatically lose access to government financial aid.)
Saint Augustine’s will continue without approval, which is still being argued in court. The Southern Association of Colleges and Schools Commission on Colleges stripped the university of its accreditation status in December 2024 for failing to comply with administrative and financial standards. That decision marks the second time in two years that SAU has lost its accreditation, but in both cases, the university was able to obtain a court order to regain its status. A recent court order allowed SAU to remain open for the 2025-26 academic year while the lawsuits are pending.
According to a university news release, dropping the case at this time represents a wise use of resources, the board decided. Officials said in an FAQ about the bankruptcy filing that some of the university’s financial challenges stem from accreditation-related costs.
“My guess is that they spent a lot of money fighting for accreditation, and it got to a point where they couldn’t do it anymore,” said Robert Kelchen, chair of academic leadership and policy studies at the University of Tennessee in Knoxville. “If they can’t keep the accreditation and if they hope to work at all, bankruptcy would be the best option. It’s not a good option, but it’s the best option for them if they hope to work, because that can help pay back some of their debts.”
SAU will officially be unofficial on May 15, so any degrees awarded before then will be valid. (Commencement exams are currently scheduled for May 9.) Current students will have to complete their degree programs elsewhere, and the university supports them with teaching agreements. The university did not say Tuesday how many students are currently enrolled. Before it lost accreditation for a second time in December 2024, the university had 175 students, according to federal data. That’s down from more than 1,000 in 2020.
The Saga of Saint Augustine
SAU’s main lender, the Self-Help Ventures Fund, is providing financing during the bankruptcy, which university officials say shows “confidence in the university’s future.” The FAQ did not say whether layoffs were possible, but noted that “the board is currently reviewing all aspects of the facility to develop a comprehensive restructuring plan.”
The university’s interim president, Jennie Ward-Robinson, is stepping down as part of the transition. Verjanis A. Peoples, former acting provost and vice president for academic affairs, will lead SAU on an interim basis.
“These steps position the university to move forward with clarity and purpose, continuing its mission of preparing students academically, socially, and spiritually to lead in a complex, diverse, and rapidly changing world,” officials said in the release.
Next Steps for SAU
To move the university forward after bankruptcy, the SAU board says it is making a “robust” and “comprehensive and forward-looking” plan. No further details were provided on Tuesday, although the FAQ states, “This plan will be shared with stakeholders in due course.”
Currently, the university plans to develop non-degree certificate and study programs. A banner on its website on Tuesday advertised its non-perishable offerings. Ultimately, the university wants to create a “pathway to re-accreditation.”
But that process would take years and would be difficult to sustain without federal financial aid, Kelchen said.
“They may try to be approved in the future, but at the moment, I don’t know of any institution that has been able to go bankrupt and get financial help,” he said.
SAU can run online programs with orthopedic staff, he said, noting that Knoxville College lost its accreditation 30 years ago and still offers some online classes.
Kelchen said executive bankruptcies are “very rare; usually when you close.” In 2024, Bacone College in Oklahoma filed for bankruptcy, and was forced to liquidate all of its assets a year later.
“It can give you a way to manage all your debts,” he said. “Like in the corporate world, it can help remove some of the paperwork and give you a way forward to work. The challenge in the higher education environment is that provision that prevents the institution from receiving government financial assistance.”
Kelchen added that while bankruptcy may help reduce some of SAU’s debt, it is unclear whether the university can reduce it sufficiently and bring in enough cash to continue operations.
Despite this uncertainty, Kelchen said, the SAU board chooses to remain open because it wants to continue working and the alumni don’t want them to stop.
“That’s when they end up in this state of motion pictures where they are still working and they may do a little, but they can’t fully teach their degrees the way they used to,” he said. “We have seen many cases in the past years that if the institution tries to close, the alumni will stand up. They will try to sue. They will start a big fight in the community because they think that hope is possible even if the finances suggest that there is no hope.”
