ASU System outlines recovery plan for Henderson State University; enrollment, audits and finance steps underway

Chuck Welch, president of the Arkansas State University System, presented a detailed update on Henderson State University's recovery and integration into the ASU system.

Welch recounted the timeline: the Higher Learning Commission approved a change of control and the university joined the ASU system in February 2021. He said Moody's had changed its outlook for Henderson from negative to stable after the merger and that the system is pursuing multi-year measures to restore fiscal health.

Welch described operational changes including moving financial aid and admissions into student affairs, contracting outside assistance to clear backlogs, and adopting a new enterprise resource planning (ERP) system intended to reduce manual processing errors. He said the system has implemented debt-service and payroll reserves and made a modest payment on a $6 million liability as a signal of fiscal discipline.

On enrollment and revenues, Welch said Henderson's net tuition revenue had been unusually low in prior years and that the university's scholarship spending rate (the share of tuition spent on scholarships) had been high (23.6% versus a university average of about 9.4%), which he said is unsustainable. He described work with an admissions consultant and a planned academic evaluation to align programs with state needs. Welch said days cash on hand rose from 7.33 on June 30, 2019, to 38.21 on June 30, 2020, as an early improvement.

Welch also addressed enrollment and housing: he acknowledged enrollment declines—partly from prior concurrent-enrollment arrangements that yielded few matriculating students—and said pre-pandemic dorm occupancy ran in the high-80s but fell last fall; the system is exploring pricing and partnerships to improve occupancy.

Welch said Henderson received a grant from the Wingate Foundation for about $1,500,000 for student scholarships and that the system continues to pursue partnerships and efficiency measures to stabilize the institution. He described an ongoing search for a permanent chancellor and an academic planning process that could reshape or phase out programs that are not viable.

Committee members asked for follow-up numbers on dorm occupancy, program-level enrollments and geographic shortage areas; Welch agreed to provide requested data to members.