Morehouse plans furloughs and cuts to spur cash flow

Students walk to class past the Martin Luther King Jr. International Chapel at Morehouse College in this AJC file photo.

Students walk to class past the Martin Luther King Jr. International Chapel at Morehouse College in this AJC file photo.

Morehouse College president David A. Thomas announced Tuesday the Atlanta HBCU will for the next nine months cease matching contributions to retirement funds for all employees and impose a monthly furlough day for most professional staff and faculty to address the school’s cash flow problems.

“We are trying to take an approach that creates the least disruption to our education programs as well as to the quality of student services,” said Thomas in a telephone interview. “No faculty are being laid off or eliminated, and our hourly employees — who tend to be our lowest paid — are not impacted. And I am among the employees who will be affected.” Morehouse has 415 full-time employees.

Also, a small amount of staff members will be replaced, and their roles absorbed by remaining employees. No faculty will be impacted, a college spokeswoman said.

Dr. David A. Thomas, the 12th President of Morehouse College. ALYSSA POINTER/ALYSSA.POINTER@AJC.COM

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The expected savings of $3 million will go in part toward paring down the $5 million owed by 500 current students in unpaid tuition and fees, said Thomas. “These students are trying to piece together a way of staying at Morehouse,” he said. “We know from Morehouse history that in those 500 students are a great number who can go out and do amazing things in the world.” Morehouse’s tuition for the current school year is about $28,840, that increases to more than $40,000 with room and board,according to information on its website.

Thomas said neither parents nor prospective students should view the cuts as foreboding. They should be encouraged, Thomas said, that “Morehouse is doing the things we need to do to put our fiscal house in order so we can continue the high-quality experience that has attracted students here.”

>> READ | Morehouse announces plans for how student loan debts will be paid off

The announcement of the temporary furloughs comes days after Morehouse announced the pledge of billionaire donor Robert F. Smith to pay off the debts of the Class of 2019 ended up representing a $34 million gift. In a decision that delighted parents, Smith agreed to pay not only the school loans carried by the 400 Morehouse grads but by their parents as well.

Thomas stressed the Smith gift cannot be spread around; it was restricted to paying off debts for 2019 graduates.

AJC file photo


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But Thomas said Morehouse is talking to other potential donors about similar gestures, as well as figuring out new revenue sources. Thomas said that includes renting Morehouse facilities, including its performing arts center, more often and at better rates, along with developing online courses and adult education. He expects new revenues will alleviate the need to extend the furloughs and retirement reduction.

Along with Atlanta’s Spelman College and Washington’s Howard University, Morehouse is a premier HBCU. It’s been spared the devastating enrollment, student retention and revenue declines that have forced other HBCUs to close their doors.

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But, Thomas said, “Morehouse is not immune to the forces that are reshaping higher education in America, especially for small liberal arts colleges that are tuition dependent.” Those forces include the rising cost of college and university education that “has outstripped the growth in middle-class family income by several multiples,” he said.

The former dean of Georgetown’s business school, Thomas took over the 2,200-student campus 20 months ago after a controversial decision by the Morehouse Board of Trustees in 2017 not to renew President John S. Wilson’s contract. In his five years leading Morehouse, Wilson also grappled with a financial crisis; in 2013 Morehouse cut its operating budget by $2.5 million and eliminated or downgraded 75 jobs.