Alliance University, known until a name change in 2022 as Nyack College, faces the loss of its accreditation due to financial troubles, after a 2022 audit cast doubt on the school as a “going concern.” Accreditors visited the Manhattan campus on Monday, and a June hearing will determine the school’s accreditation status.
The Middle States Commission on Higher Education (MSCHE) recently placed Alliance on “show cause” status, meaning the school must show why its accreditation should not be revoked. MSCHE also placed The King’s College in this status last month, threatening the only two historically evangelical colleges in Manhattan—and the only two Council for Christian Colleges & Universities (CCCU) members in New York City—with removal of accreditation at the same time. The schools’ troubles are part of a larger crisis in Christian higher education.
Alliance’s auditors in 2022 noted “recurring losses in net assets” and “recurring negative cash flows from operations” that caused them to doubt its ability to continue. MSCHE put Alliance on probation in June 2022 just before the school’s audit was released.
But an audit of the school in 2017 also warned of a failing institution, and Alliance has survived the years since of declining enrollment and a pandemic. It has been coming out of its financial free fall, especially with support from its parent denomination, the Christian and Missionary Alliance (C&MA).
Enrollment last year was up 12 percent, and the school expects to have a positive cash flow for the first time in a decade next year, Alliance’s president Rajan Mathews told CT. Applications for next year are up significantly, and the school cut $4 million from its budget, Mathews added. The school has about $33 million in operating expenses.
The escalation from the accreditor was a “surprise,” Mathews said, since retention is improving, fundraising is up, and the school has financial backing from its denomination.
“We have a cautiously optimistic forecast for next year,” Mathews said. “We felt that Middle States should have given us a little more time to prove the pudding. … We thought we had about two years. We were putting in place all the improvements.”
A historic C&MA school founded in 1882 to train missionaries, Alliance is one of the most ethnically diverse Christian colleges in the United States, with a student population that this year is 34 percent Latino, 30 percent Black, 11 percent international, and 9 percent Asian.
Most Alliance students come from New York City’s five boroughs, and 45 percent receive Pell grants, which means they have exceptional financial need. Almost half of the students are the first in their families to attend college.
Many churches in the New York area are led by Alliance graduates, including Pastor A. R. Bernard (an Alliance Theological Seminary alumnus) at the largest evangelical church in the city. Another alum, Pastor Gil Monrose, is the head of the New York mayor’s faith-based office.
Pastor A. B. Simpson started the C&MA denomination in New York in the 1880s after leaving his Presbyterian church that would not accept Italian immigrants. A century later, members of the denomination started a refugee resettlement effort that later fueled the launch of World Relief’s resettlement program. Afghan refugees now are students at Alliance University.
Alliance has had significant annual deficits for about a decade, at one point operating as much as $12 million in the red.
In 2019 tax filings, the school was creaking under $85 million in debt, mostly mortgages. It was trying to sell its historic Rockland County, New York, campus while moving classes to a new property in lower Manhattan. The school had decided a few years before that a campus based in Rockland was not “financially viable.”
Enrollment and retention were patchy in 2019 because the school went back and forth about when all classes would move to Manhattan instead of Rockland. Classes began in full in Manhattan in spring 2020, just when the pandemic hit.
The pandemic brought a significant drop in enrollment, which put the school in a “downward spiral,” said Mathews. Enrollment in undergraduate and graduate programs has fallen from a peak in 2010–2011 of 3,369 to 1,944 currently.
“The student population we focus on suffered the most during COVID[-19],” he said, because they are often economically disadvantaged.
In 2020, the school finally sold the Rockland campus, bringing $28 million in gains on the sale, which was used to pay down debt, the 2022 audit shows. That left the school with $51 million in debts, according to the audit, bringing it much closer to balancing with its assets.
The full mortgage on the school’s Manhattan property is due in 2026, but the property is appraised at $85 million now, according to the 2022 audit.
Mathews—a telecom executive who worked in India, Afghanistan, and the US—was named president in May 2021. Coming from a business background, he’s learned that with the “six-month sale cycle” in academia, he has to wait longer to see what works than he did in business.
“The lead time to correct everything is much longer in academia,” he said.
The King’s College, just around the corner from Alliance, faces threat of closure at the end of this school year. Alliance has a very different set of circumstances, and its leadership expects that the school will continue.
Alliance (1,944 students) is larger than King’s (384 students) and has a denomination backing it. King’s has instead had the backing of a for-profit online education company, Primacorp, as well as a board with four Primacorp appointees. But King’s recently announced it was cutting ties with Primacorp, removing the Primacorp board members, and bringing in eight new board members.
Both schools received federal Paycheck Protection Program loans that were forgiven—King’s received $1.8 million, and Alliance received $2.8 million.
Alliance has had a more stable board and has avoided the dramatic presidential turnovers that have characterized King’s, where one former president, Dinesh D’Souza, was convicted of federal corruption charges.
Alliance is discussing whether it could sell two floors of its lower Manhattan building, because it doesn’t need them all. Last year Alliance offered a floor and a half to King’s “on very attractive terms,” said Mathews, “and they refused.”
“It would have made all the sense in the world for us and King’s to play well together,” he said. “For some reason we did not get a lot of cooperation from King’s. … But their board makes their own decisions.”
King’s said in a statement that it was open to collaborations with other schools, “especially with good schools like Alliance University. In this case, it was not a fiscally prudent decision for the college to pursue at the time.”
King’s describes itself on its website as “the only Christian liberal arts college in New York City.”
King’s has been working to secure transfer agreements for students in the event of closure. As part of this “show cause” status with accreditors, Alliance is also required to have a “teach out” plan for students, in case they need to finish their education elsewhere. But the school does not think that will happen, projecting another increase in enrollment next year.
Mathews attributed the rise in enrollment to the school investing in a database to target its audience more effectively instead of relying on churches and word of mouth. The school offers online education, but it requires undergraduates to do most work in person.
The accrediting agency will have a hearing concerning Alliance on June 21, and Alliance leadership expects a decision soon after that.
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