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OPINION | REX NELSON: The new Henderson


Chuck Ambrose, chancellor of Henderson State University at Arkadelphia, is impressed by the resilience of his students.

"They went through a pandemic and fiscal crisis at this school," Ambrose says. "Those are things no student should face. What struck me when the current school year began was just how hungry they were to get back to normal."

Henderson came closer than most Arkansans realize to closing for good. As pointed out in Saturday's column, the grim reaper isn't as near as he once was. Ambrose notes that "history will record that there was a group of people who love Henderson and exemplify the Reddie spirit. These people stepped forward and did what had to be done."

Henderson has received national attention for implementing one of the largest cost containments in the shortest time frame in higher education history. In January 2022, the school faced a $12.5 million shortfall for the fiscal year ending in June 2022. It also had long-term debt of $78 million that required annual debt service payments of $6.9 million.

Its financial reserves were depleted, even after receiving a $6 million advance from the state in July 2019 and $12 million in pandemic relief funds from the federal government.

"The budget progress we've made is ahead of my expectations," Ambrose says as we visit in his office on the Henderson campus.

Ambrose became the school's first full-time chancellor in November 2021. In July 2019, Henderson had entered into an agreement for the Arkansas State University System to provide operational support. The ASU board approved a merger agreement in November 2019. With approval from the Higher Learning Commission and Arkansas Legislature, Henderson became part of the ASU System in February 2021.

No longer would Henderson have its own president or board. ASU president Chuck Welch is a former Henderson president. It seems clear now that Henderson would have closed had Welch and the ASU board not stepped in.

According to a Henderson document: "The support of the ASU System brought governance and policy support that was critical to the ongoing sustainability of Henderson. Resources include direct support for financial, legal, institutional research and governmental relations functions. Additionally, shared services have created significant savings in health-care costs, payroll and benefits, procurement, purchasing, travel and human resources."

Henderson's operating expenses were reduced by $7.4 million between 2019 and 2021. It wasn't enough. Ambrose, a nationally known innovator in higher education, left his job as president of a foundation known as KnowledgeWorks to make systemic changes that might restore long-term stability.

"Schools can go through tremendous crises and students will still enroll if you give them reasons to enroll," Ambrose says. "We have a lot of students who come from Henderson families. They wouldn't go anywhere else. We also have a lot of students in this state looking for an affordable education. We didn't increase tuition last year for that very reason."

In January 2022, Ambrose began instituting furloughs and administrative salary rollbacks. His actions created temporary liquidity so the university could meet payroll and its debt service payments. Those were short-term fixes. The systemic changes began in March 2022 when the ASU board voted to certify Henderson's recommendation of financial exigency.

"The financial exigency process pushed Henderson to think holistically about organizational size and shape, to align the academic portfolio to available resources and workforce needs, and to forge community partnerships and instructional capacity with ASU System institutions and others," the Henderson document states.

In 2020-21, the school's academic offerings lost $13.7 million on an operating basis (overall instructional dollars compared to net tuition and fees generated). Something had to give. In 2021, instructional salaries and benefits were 70 percent of total academic costs. Total credit hours at Henderson had fallen by about 9 percent each year since 2019.

"Henderson was teaching fewer students with an instructor cost base that was substantially misaligned," the university document states. "Given the size and structural nature of the operating losses, Henderson's only choice was to reduce instructional costs to better reflect actual revenues and reposition the university to offer academic programs that best fit student and community workforce needs."

Fiscal year 2022 saw accounts payable decrease from $6.93 million to $1.38 million while personnel services and benefits decreased from $30.77 million to $23.5 million. There were 25 academic programs eliminated. Henderson went from 25 department chairs to four program directors. It went from four deans to one dean of the faculty.

The number of full-time employees dropped from 330 in January 2022 to 230 by September of last year. The estimated payroll savings in fiscal year 2024 is expected to be $8.94 million. Additional cost-containment strategies from vendor negotiations yielded almost $1.6 million in savings.

"Ongoing structural challenges, long-term debt and a competitive enrollment environment require that Henderson maintain its modified cash budget approach into fiscal year 2024," the Henderson document states. "The fiscal and instructional allocation deficits must be continually monitored for optimal financial health and operational integrity. Henderson also must focus and align resources to address student completion rates, which have had a direct impact on net tuition revenue."

Will students be attracted to a downsized, more tightly focused Henderson? Ambrose believes they will. Degree programs now fall under four academic learning communities--health, education and social sustainability; applied professional science and technology; arts and humanities; and business innovation and entrepreneurship.

Ambrose is optimistic about partnerships that will attract students. Partners include:

New York Institute of Technology's College of Osteopathic Medicine, which operates on the Jonesboro campus. The dean of that school is Shane Speights, an Arkadelphia native and Henderson graduate. He might just prove to be Ambrose's ace in the hole due to his deep love for Arkadelphia. NYIT is partnering with Henderson to offer degrees that will lead to improved access to health care in south Arkansas. Perhaps Henderson will one day be home to its own NYIT medical college, producing osteopaths to serve the south half of the state.

ASU's Jonesboro campus. The past year has seen the expansion of Henderson programs such as aviation to Jonesboro as well as graduate offerings across both campuses.

ASU Three Rivers in Malvern. The community college partners with Henderson to provide workforce training and associate degrees in Clark County.

The Saline County Career and Technical Campus, which partners with Henderson to provide concurrent enrollment and expanded degree opportunities for high school students.

Ambrose notes that 70 Henderson students are taking some courses across the street at Ouachita Baptist University. He hints that there are other big announcements coming.

"We can do a better job partnering with two-year institutions in our part of the state since they do certain things better than we do," Ambrose days. "Three Rivers is doing workforce training on our campus right now. We don't want anyone to assume that what we've gone through the past few years is normal. Things are going to be more serene going forward.

"In many ways, we've already done what other four-year colleges and universities will have to do in the years ahead. With a falling number of college-age students, a school can no longer just grow its way out of problems. You must change your model. We have to provide the type of education that the south half of Arkansas needs and wants. I've learned this much: the intangibles that make Henderson unique are stronger than any financial crisis."


Rex Nelson is a senior editor at the Arkansas Democrat-Gazette.


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