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Morris Brown, Feds Prepping Debt Deal

ATLANTA – Morris Brown College is expected to settle nearly $10 million in debt for pennies on the dollar in an agreement pending with the U.S. Education Department, according to a letter obtained by The Associated Press.

In the April 7 letter, the Education Department said it will forgive more than $9.4 million in debt, provided Morris Brown pays the remaining $500,000. The deal would help the historically Black institution overcome a major hurdle in its efforts to regain accreditation.

“We have been working on getting this debt addressed for a year,” said Morris Brown College President Stanley Pritchett. “This is a game-changer for the college. There are other financial challenges, but this will help to open the door … to resolving our other issues.”

Department of Education spokesman Justin Hamilton told The Associated Press that the agency could not comment on the agreement directly.

“We’re aware of the situation,” Hamilton said. “We do recognize the important role of historically Black colleges and the need to help preserve their important legacy.”

Pritchett said the settlement agreement could be finalized as soon as May 1 and that the payment would be due within 90 days of the signed deal. The letter, signed by Department of Education counsel Russell B. Wolff, says the agreement must also be approved by the Department of Justice.

Known for producing many of Georgia’s Black educators, Morris Brown College was founded by former slaves in 1881 and has roots in the African Methodist Episcopal Church.

Audits done by the Education Department of the college’s finances for the years between 1999 and 2004 uncovered the debt.

The debt represents years’ worth of unused federal aid that the school was supposed to return to the government. Typically, the government gives schools money at the beginning of the academic year for student aid and other purposes. When any of that federal money is left over at the end of the year—sometimes because fewer students than expected need assistance—a school is required to give money back to the government.

Morris Brown lost its accreditation in 2003, after President Dolores Cross was forced to resign from the college. In 2006, she pleaded guilty to allegations of financial mismanagement but has since denied any wrongdoing, saying she took a plea deal to spare her family a public trial in an effort to move on with her life.

The scheme contributed to Morris Brown’s massive debt, which currently totals around $30 million. The school owes money to vendors and other creditors. Pritchett, who came in as interim president in 2008, says most of the debt is about a decade old.

With the loss of accreditation, the school has been ineligible for federal student aid and is struggling to survive with a skeleton campus and enrollment. Today, the college has three majors—down from 48—and 85 students, a shadow of the 3,000 students Morris Brown boasted at the height of its enrollment.

Meanwhile, the school has teetered on the brink of extinction but has found a way to survive. The campus was nearly shuttered two years ago after the city demanded a $380,000 overdue water bill, but Morris Brown held two rallies to raise the money to settle the debt. Alumni have contributed hundreds of thousands of dollars to keep the school afloat.

Jerry Howard, a 1970 graduate of Morris Brown, donated $50,000 after learning of the school’s efforts to dig itself out of debt. The Social Circle, Ga., native retired last year as senior vice president of corporate affairs for Marathon Oil Corporation after 35 years with the company and has since turned his attention to helping to save his alma mater.

“I haven’t contributed as much as I probably could have over the years,” Howard told The Associated Press in a telephone interview on Monday, estimating that he may have given the school a total of $1,000 in the years since graduation and prior to last month’s large donation. “I’m looking to make up for that. I hope it serves as a catalyst for other alumni. I really believe we have a great window of opportunity here to eliminate a substantial amount of debt here. We’re going to give it our best shot.”

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