This audio is auto-generated. Please let us know if you have feedback.

Dive Brief: 

  • The Middle States Commission on Higher Education said Monday it is yanking accreditation from Alliance University, a financially struggling Christian college in New York.
  • Accreditation will terminate at the end of December, according to MSCHE’s announcement. The decision comes a few months after MSCHE flagged multiple compliance concerns with the private nonprofit institution and asked for information to assess its financial viability. 
  • Alliance President Rajan Mathews said via email Tuesday that the college plans to appeal the decision. It can remain accredited while it appeals the decision, so long as it meets certain conditions, including not enrolling or marketing to new students, according to MSCHE’s policies. 

Dive Insight: 

Alliance, known as Nyack College until last fall, has operated in the red for about a decade, with annual deficits reaching as high as $12 million, according to tax documents. Those issues boiled over in 2022, when auditors again said they had “substantial doubt” that the university could stay in business. 

In recent years, Alliance has operated under a significant debt burden, surpassing $90 million in fiscal 2020. 

In late 2020, Alliance sold its campus in Nyack for $45.5 million and used the $28 million in gains from the transaction to pay down some of its debt, its latest audit shows. It also moved all academic programs to Manhattan, The Christian Post reported

In fiscal 2022, the college had $59.6 million in liabilities, most of which stemmed from its $51.6 million mortgage on its New York City campus. Despite the recent campus sale, its liabilities still exceeded its net assets, which totaled $54.9 million in fiscal 2022. 

Federal data shows the university’s enrollment has also plummeted in recent years. In fall 2021, the college had 1,863 students, down 42.9% from a decade earlier. 

However, the college’s most recent audit said new student enrollment had improved, rising 12% over the previous semester in fall 2022 — though it did not share exact figures. 

Mathews said Tuesday that the college has approximately 1,900 students and that it had been on track to increase year-over-year enrollment by more than 30% for the fall term. 

He also said the college estimated it would end this fiscal year with a deficit of about $3 million to $4 million. That more than halves last year’s deficit of $10 million, according to Mathews, who chalks the reductions up to closing unprofitable academic programs, cutting staff, increased fundraising and seeing more revenue due to higher enrollment levels. 

Mathews said MSCHE’s decision “came as quite a surprise” given the college’s progress after three years of the COVID-19 pandemic. He pointed to several improvements, including projections of positive cash flow for 2023-24. 

“This decision of MSCHE will be a telling blow to the communities we serve in New York City,” Mathews said, noting that the college has significant numbers of minority and disadvantaged students. “We were hoping that MSCHE would have given us a bit more time to prove our case of financial viability instead of withdrawing our accreditation.” 

Alliance’s financial woes have caught the attention of government officials. The U.S. Department of Education placed restrictions on Alliance’s federal student aid funding late last year over concerns about the university’s financial responsibility. 

It isn’t the only struggling Christian college in New York. MSCHE also recently announced it was withdrawing the accreditation of The King’s College over concerns the liberal arts institution is “in imminent danger of closing.” 

In an FAQ on its website, King’s College recently notified students that it’s exhausting potential options to stay open, but that it hasn’t yet secured an affiliation with another institution that will enable it to remain viable.