Cheyney University, which has been running a deficit and experienced a 30 percent enrollment drop this year, has been placed on probation by the body that accredits colleges and universities.
The historically black university, on the boundary between Chester and Delaware Counties, has two years to correct financial concerns raised by the Middle States Commission on Higher Education or face losing accreditation.
That loss would mean that the university's students no longer would be eligible for state or federal financial aid.
Frank G. Pogue, interim president of Cheyney, and Frank T. Brogan, chancellor of the Pennsylvania State System of Higher Education, of which Cheyney is part, said they were committed to fixing the problems.
"The action taken by Middle States confirms the serious issues facing Cheyney University, of which we are well aware," Brogan said in a statement. "We have been working with the leadership of the institution to begin to address these issues, and to develop and implement a long-range sustainability plan. Those efforts must and will continue."
In a document published on its website, the commission said Cheyney must take steps to improve finances, develop a long-term financial strategy, implement a technology plan, and provide updated cash and financial projections for the next five years.
Pogue said administrators had begun meeting to answer commission concerns by a Sept. 1 deadline.
Probation means the commission has "a serious concern" about Cheyney. Based on steps the school takes, the commission could remove the probation, extend it, or take more serious action, such as requiring the university to show that it deserves to keep its accreditation.
Students should not panic, said Richard Pokrass, spokesman for the commission. Most universities that are placed on probation remedy problems within a year to 18 months.
"Probation does not mean loss of accreditation is imminent," he said. "They're still eligible for financial aid, and the school is still accredited."
Cheyney and state system officials "seem to be committed to doing whatever they have to do to come back into compliance," Pokrass added.
Of the 529 accredited institutions in the Middle States region, only two others are on probation: the Harrisburg University of Science and Technology and Unification Theological Seminary in New York, Pokrass said.
Three schools in the region have lost accreditation over the last seven years, Pokrass said: Baltimore International College; Southeastern University in Washington, and Sojourner-Douglass College in Baltimore.
Cheyney's financial struggles are not new. In the last five years, the university has lost half its enrollment. This fall, enrollment dropped to 711 students from 1,022 last year. The university, which operates on a $30.4 million budget, was running a $15 million deficit earlier this year. Cheyney continues to operate through a line of credit from the state higher education system.
In August, the university came under scrutiny for mismanagement of student financial aid, which could mean the school will have to repay $29 million to the U.S. Department of Education. The university, one of 14 in the system, could not provide high school transcripts for 45 percent of the students who received aid from 2011 to 2014, the system said. The university could not document that some students receiving aid were making the required progress toward a degree.
Cheyney officials this fall said they were making an all-out effort to increase the student body, and were considering launching an inaugural capital campaign.
Cheyney's history is rich. Among its storied alumni are CBS reporter and longtime 60 Minutes correspondent Ed Bradley; civil rights leader Bayard Rustin, a key aide to the Rev. Dr. Martin Luther King Jr.; and educator-activist Octavius V. Catto, who helped lead the school in the late 19th century, when it was known as the Institute for Colored Youth and was revered as a training ground for African American teachers.