Morris Brown College is negotiating a deal to pay just $500,000 out of the $9.9 million it owes the U.S. Department of Education, the college president said Monday.
While it is only part of the more than $30 million debt facing the historically black college, President Stanley Pritchett said the plan would bolster the Atlanta institution's struggle to earn back accreditation.
"This gives the college hope," he said. "This gives us a spirit of optimism we have not had in a very long time."
The Southern Association of Colleges and Schools revoked the institution's accreditation in 2003, citing gross financial mismanagement. The college is in the pre-application process to receive accreditation through Transnational Association of Christian Colleges and Schools, said T. Paul Boatner, the group's president. The process can take five years.
Officials with the U.S. departments of education and justice declined to confirm the pending agreement. While the agreement is with the education department, the justice department must approve it as well.
"We're aware of the debt situation with Morris Brown, but are not in a position to discuss the issue," education department spokesman Justin Hamilton said. "We recognize the important role of historically black colleges and the need to preserve their important legacy."
Former slaves founded the college in 1881. The school's historical mission has been to teach students who lack the money or academic preparation to go elsewhere.
Pritchett said the agreement could be finalized in the next couple of weeks and the college would then have 90 days to pay. If the college cannot meet the deadline, it will owe the total amount, he said. The college and alumni have already sent letters and e-mails to solicit donations.
It is just one piece of the turnaround plan the college has been working on for the past year, Pritchett said. The college is holding similar negotiations with other creditors, he said.
The school lost accreditation largely because of crushing debt and financial fraud. Dolores Cross, president from 1998 to 2002, pleaded guilty in 2006 to embezzling federal student aid money to try to save the school from financial ruin. Former financial aid director Parvesh Singh also pleaded guilty.
Today Morris Brown is a scaled-down version of its former self. The college enrolled about 3,000 students at its peak, but is down to 85, Pritchett said. The college downsized from nearly 50 majors to three -- general studies, business administration and organizational management and leadership.
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