Chapter 8: Financial Issues for HBCUs in 2020 and Beyond

In order to survive beyond 2020, historically black colleges and universities (HBCUs) will need to strengthen their financial standing. Compared to predominately white institutions, HBCUs have substantially weaker financial resources. Without strong fundraising and effective financial management, HBCUs are doomed beyond 2020. The importance of hiring astute financial managers at HBCUs cannot be overstated. History, tradition, and reputation are irrelevant at an institution if the finances are not optimally managed. Moreover, state and federal higher education policies can damage the financial standing of HBCUs, as seen in the 2013 PLUS loan crisis. This chapter will be divided into two sections. The first section will provide a historical and contemporary perspective on financing HBCUs, including how state higher education policies impact HBCUs. The second section of the chapter will provide an overview of budget management at HBCUs.