HSU beginning its new chapter in ASU System

University’s progress noted, but some challenges remain

A new beginning of sorts for Henderson State University as a member of the Arkansas State University System answers some questions for the Arkadelphia campus even as challenges remain after the merger.

Financial troubles emerged as Henderson State ended its fiscal 2019 with a deficit and cash shortfall, described at the time as a result of unpaid student accounts. The university’s percentage of students receiving Pell grants — 51% — was the second-highest among all public, four-year universities in the state in 2018-19, according to the National Center for Education Statistics.

State officials approved a $6 million loan, the first such loan from the state’s Budget Stabilization Trust Fund to a public higher-education institution since 2009, when the University of Central Arkansas received such a loan, a state spokesman has said.

“We’ve come a long, long away, and we’re getting all of the pieces of the puzzle in place,” ASU System President Chuck Welch said Tuesday.

WHO WILL LEAD?

An interim hire, Jim Borsig, 64, will continue as chancellor for a second year, Welch said.

Borsig became the top administrator on campus in July. His experience includes serving as a staff member — an associate commissioner — for the Mississippi Institutions of Higher Learning, whose board serves as the governing entity for eight four-year universities in the state. Borsig also previously led the Mississippi University for Women, serving as the college’s president from 2012-2018.

A national search for a chancellor will restart later, said Welch, who, before taking on leadership of the ASU System in 2011, served as president of Henderson State.

“We’ll do a comprehensive national search just like we had begun to do” before the pandemic, Welch said. It will likely begin in the fall, he said.

The ASU System board of trustees expanded to seven members from five as part of state legislation signed into law Monday by Gov. Asa Hutchinson.

A spokeswoman for the governor’s office said Tuesday that appointments to the board will be announced this week.

WHAT’S OWED TO THE STATE?

The financial shortfall led to a $6 million, zero-interest loan from the state, approved in July 2019 by the state Department of Finance and Administration.

The repayment conditions have shifted, with Henderson State now required to pay off the debt before July 2028.

“We hope to make the first payment on that this year,” Welch said.

Last week, the Higher Education Coordinating Board also gave its approval for a $1 million, zero-interest loan from the state Sustainable Building Design Revolving Loan Fund for campus facility projects such as replacing heating and cooling equipment and fixing the roof of the campus library. The repayment period is 10 years, with $100,000 to be paid each year.

“We don’t plan to take any other additional debt,” Welch said.

The previous governing board for Henderson State in December 2019 approved a request to seek out a $3 million line of credit, but “we never once had to tap that line of credit,” Welch said.

WHAT’S THE ENROLLMENT PICTURE?

Henderson State enrolled 3,163 students this past fall, down 21.5% from the 4,027 students it enrolled in fall 2019, according to data from the state Division of Higher Education.

Welch said the university took a hit in enrollment this fall in part because of a “strategic decision” to sharply curtail concurrent enrollment. This type of enrollment allows high school students to earn college credits.

These enrollments “weren’t generating very much revenue at all,” Welch said, adding that an analysis found that “these weren’t students who were matriculating to the university in large numbers.” He said these students have largely been directed to a two-year college, Arkansas State University Three Rivers, which is located in Malvern.

Even without factoring in these students, however, enrollment was down about 11%, Welch said.

“That’s higher than, obviously, you would want,” Welch said.

Borsig said Henderson State had prepared its budget based on a 5% drop in enrollment.

“Henderson teaches a lot of first-generation college students. That’s part of our mission: We provide access and opportunity for those that enroll here,” Borsig said. He said first-generation students in particular benefit from going to a campus to “get the lay of the land” and talk to faculty members and advisers.

“The pandemic last summer pushed all of our orientation sessions to being virtual,” Borsig said, calling this a “key factor” in the year-over-year enrollment decline.

Borsig said there are students who ended up taking an “unplanned gap year,” in part because of the pandemic resulting in a reduction of face-to-face classes as well as its effects on the social aspects of college.

“We’re at work trying to enroll those students for fall of 2021,” Borsig said, adding that the university — while willing to make adjustments based on the pandemic — is planning for “a robust return to in-person, face-to-face teaching for the fall semester.”

WHAT’S NEXT FOR EMPLOYEES?

Borsig said there have been no furloughs or layoffs this academic year because of the enrollment decline. The university had some planned furloughs before the fall semester.

“We are, I guess now, about in the middle of an enrollment period for an optional, voluntary retirement opportunity,” Borsig said. Welch said the early-retirement offer is “purely 100% optional.” The early retirements could result in savings for the campus, Welch acknowledged.

In general, for any positions that come open at Henderson State, there’s “an automatic freeze” so that a review can be done to determine if the job needs to be filled, Welch said.

With the merger, “there’s not any discussion about any layoffs or anything of that nature,” Welch said.

The campus is “in a far better position today than 18 months ago,” when the ASU System first stepped in, Welch said.

“This is a multiyear turnaround program. This isn’t something that’s going to happen overnight,” Welch said.