College remains open, but in debt

When classes resume at Barber-Scotia College on Monday, about 50 students - a shadow of the college's former student population - will return to the historic campus.

Since losing its accreditation in 2004, the debt-plagued college near downtown Concord has struggled to regain its footing.

It's a disheartening cycle: Without accreditation, the school has fewer students, and fewer students mean less money for the college. The shortage of funds then becomes a barrier to paying off the debt that is preventing the college from receiving accreditation.

The Southern Association of Colleges and Schools revoked Barber-Scotia's accreditation in 2004. That same year, Barber-Scotia revealed it had awarded about 30 degrees to students in the continuing education program who hadn't completed all the requirements.

The decision to yank the college's accreditation was based largely on the school's failure to provide accurate information, SAC officials have said.

The college has applied for accreditation through the Transnational Association of Christian Colleges and Schools, an organization sanctioned by the U.S. Department of Education. Students attending TRACS-accredited schools can receive government-funded education loans.

Dr. David Olah, president of Barber-Scotia College, said debt caused by a $6.5 million loan for campus renovations must be addressed before the college can receive accreditation.

The college had just finished making renovations when it lost its accreditation. Then Barber-Scotia lost students - the major source of the college's income. Barber-Scotia was forced to dip into an escrow pool to make loan payments the following year, said Olah.

A TRACS accreditation team visited in the college in April 2009 and said the school was on track but expressed concern about the college's financial standing, said Olah.

In order to receive accreditation, the school must pay back a significant portion of the $6.5 million loan. TRACS requires that the school have a plan for payment of debt.

"We don't have enough cash flow," said Olah. "You need money in to send money out."

In May 2009, Olah announced the school's launching of a $10 million fundraising campaign to pay off debts and fund student scholarships, academic programs, infrastructure, technology, staff recruitment and general college support.

The school has received about $300,000 in donations and grants, said Olah.

"We're nowhere near what it would take," he said. "It's a drop in the bucket."

Olah said the economy has inhibited the school's ability to raise money. But efforts have also been hampered by people who are afraid that they could be donating to a losing cause, he said.

"Everybody wants to contribute to a winner," he said. "Nobody wants to contribute to debt."

The money raised so far has come mostly from private donors and alumni of the college, which was founded by the Presbyterian Church in 1867 as a seminary for the daughters of former slaves.

With no accreditation, Barber-Scotia students can graduate with degrees, but credits do not transfer, and they cannot get federal financial aid.

The college is trying to increase enrollment to decrease debt.

"When you don't have any students, you don't have any revenue," said Olah.

The college is working on a seven-year plan to double enrollment. The college had 24 students last year and expects to have 40-50 students for this academic year. At its peak, the college had about 1,200 students, said Olah.

"You have to start building again," said Olah. "The problem is we don't have the financial base to pay off the debt. If we had 1,200 students here, we could take care of ourself."

The Rev. Dr. E.J. Best Jr., chairman of the college trustees, said the biggest obstacle to achieving accreditation is raising money.

"We need to show them that we've made a significant improvement in funds to reduce the debt," said Best, who played basketball at Barber-Scotia and graduated in the 1960s.

Olah said the college has a good curriculum and qualified instructors.

"We're moving ahead," said Olah. "If we could just find some money, we'd be in great shape."