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Judson College will close and file for Chapter 11 bankruptcy

NewsMark Wingfield  |  May 24, 2021

An urgent fundraising appeal late last year had appeared to save Judson College, but declining enrollment and wary creditors sealed the historic school’s fate. After 183 years of operation, the Baptist-affiliated college will file for bankruptcy protection and will not reopen for the fall semester.

College trustees made what they called a “heartbreaking” decision May 6, two days after one of the school’s creditors called the note on a loan that could not be repaid.

Additionally, only 12 new students had enrolled for the fall 2021 semester, officials said, adding to the woes of declining enrollment for the all-female school located in Marion, Ala.

Only 12 new students had enrolled for the fall 2021 semester.

In April, trustees had approved a 2021-2022 budget, based on confidence the board and administration had in support of “new significant donors to help close the college’s operating deficit,” a school news release explained. “Despite the college’s aggressive efforts in March to pursue promising leads with new potential donors, those significant funds never materialized.”

In December 2020, Judson officials issued an urgent appeal to donors, explaining the school needed to raise $1.5 million in gifts and pledges to remain open for the spring 2021 semester. President Mark Tew wrote a one-page letter outlining the school’s dire financial situation. He said the school must obtain $500,000 in donations by Dec. 31 and another $1 million in unrestricted pledges to be fulfilled between Jan. 1 and May 31, 2021.

By the start of 2021, that appeal appeared to have been successful. The college reported that donors gave $27,665 more than the $500,000 required by year-end and made $584,065 in pledges toward the $1 million needed by May 31. Plans were laid for a full academic year beginning in fall 2021.

Inside Higher Education reported that the college raised more than $2.53 million in the academic year just ended.

However, not all the pledges and not all the additional funds needed to reach the full goal materialized. And only 80 students were committed to return in the fall, in addition to the 12 new enrollees. Operating a college for fewer than 100 students is not financially viable.

Not all the pledges and not all the additional funds needed to reach the full goal materialized.

The school’s news release said administrators had explored a range of ideas, including potential mergers. Judson filled a unique space in today’s higher education market, being the last all-female college in Alabama and being a small Christian college in a rural location.

The news site Alabama.com reported comments from Roger Willmore, a former Alabama Baptist Convention president who serves on the Judson board of trustees.

“The administration, the president and the board of trustees made every effort to bring viability back,” he said. “Circumstances backed us into a corner. Finances in general were an issue. I feel we tried every possible way to keep this from happening. It was a heart-wrenching decision for everyone. The members of the board of trustees agonized over this. No one wanted to see this happen. There’s a spirit of grieving taking place.”

The college news release quoted President Tew saying, “We know this was the right decision, but there is not a person here whose heart isn’t broken over this. I share the heartbreak of this decision that is felt by generations of Judson students, faculty and friends.”

Board chairperson Joan Newman said: “Today’s vote is the outcome of months of research, fundraising, and yes, prayer. Acknowledging the incredible legacy of Judson, acknowledging the thousands of lives that were changed through a Judson experience and grateful for my own personal journey at Judson, it is with broken hearts that the board votes to suspend instruction.”

The school said it will suspend academic operation after a summer term ending July 31. Residence halls will close after a May 2021 summer term.

The corporate transition required to close a college is governed by the Southern Association of Colleges and Schools and the U.S. Department of Education. In Judson’s case, a bankruptcy court also will be involved. Trustees said they will create a five-member committee to work with administration and bankruptcy counsel.

“Financial challenges like these are not unique to Judson and did not happen overnight.”

Inside Higher Education reported that Fuller Higher Ed Solutions was engaged to help the college chart possible paths forward, which included either closing or investing up to $40 million in a turnaround plan.

“Financial challenges like these are not unique to Judson and did not happen overnight; they are the result of sliding enrollment, accumulated deferred maintenance, decisions by the previous administration, and gaps in data shared with the board about the college’s condition,” the report said. “The pandemic contributed by increasing the pace of the impact, but the college was already in a difficult financial condition prior to March 2020.”

The Judson campus sits on a 118-acre site in Marion, a small town located about 75 miles southwest of Birmingham. The school has been affiliated with the Alabama Baptist Convention throughout its history and currently receives $1 million annually from the convention.

According to its 2018 IRS filing, the college reported total assets of $32 million.

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Tags:Higher educationJudson CollegeMark NewRoger WillmoreJoan NewmanbankruptcyMarion AL
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