According to the Triangle Business Journal, WRAL, and a press release from Saint Augustine’s University on Aug. 28, the university, one of the oldest Historically Black Colleges and Universities (HBCUs) in the U.S., has filed for bankruptcy protection. According to WRAL, the Raleigh-based HBCU filed on April 27 in the U.S. Bankruptcy Court for the Eastern District of North Carolina. Chapter 11 bankruptcy is designed to allow organizations to reorganize their debt and continue operating.
“This structured, court-supervised process will enable SAU to organize its financial affairs in an orderly and transparent manner. The decision, made by the University’s Board of Trustees, reflects a deliberate and strategic step to advance the University’s long-term sustainability while addressing current financial realities,” the university stated in a press release on Tuesday.
Despite the bankruptcy filing, university officials assured that Saint Augustine’s will continue to operate throughout the process. A reorganization plan is being developed and will be submitted to the court, outlining the university’s path forward. The university has the support of its primary lender, Self-Help Ventures Fund, in managing the debt, reflecting confidence in the institution’s future.
“Chapter 11 provides a comprehensive path to address our financial challenges and move forward with a stronger foundation,” the university added.
How much does Saint Augustine’s University owe?
Court documents indicate that Saint Augustine’s University’s assets range from $100 million to $500 million, while liabilities are between $50 million and $100 million. The filing includes more than 200 creditors. According to Triangle Business Journal, government agencies represent a significant portion of these obligations, with the largest creditor being the Internal Revenue Service, owed approximately $14.4 million. Other major creditors include the U.S. Department of Commerce ($2.1 million), the U.S. Department of Education ($1.9 million), and the North Carolina Department of Revenue ($1.7 million). Private creditors also appear on the list, including American Trust Company, which is owed about $3.3 million, and reportedly linked to retirement accounts, noted WRAL, along with higher education software provider Ellucian, with a claim of nearly $1.9 million.
The university has disputed these claims and noted that unsecured creditors may not receive payments after covering administrative costs.
The HBCU will no longer continue litigation on its accreditation status.
Saint Augustine’s also confirmed it will not continue litigation related to its accreditation status, which is expected to conclude on May 15. It was temporarily restored in 2024. After careful evaluation, the university’s Board determined that further litigation would not be a good use of “resources,” the press release stated. Instead, Saint Augustine’s will focus on supporting students through teach-out agreements, developing non-degree certificates and apprenticeship programs, and working toward reaccreditation. This decision was made in cooperation with its accrediting body, SACSCOC, to ensure that impacted students can still graduate from an accredited institution.
According to the U.S. Department of Education, a school must maintain accreditation from a nationally recognized accrediting agency like SACSCOC in order to participate in federal student aid programs. Without accreditation, students would no longer be eligible for federal financial aid.
Saint Augustine’s commencement is scheduled for May 9, and the university spokesperson confirmed that students who graduate this spring will receive accredited degrees. However, students who do not graduate this semester will need to transfer to accredited institutions.
Saint Augustine’s leadership sees this moment as an opportunity for a reset. The university is focused on stabilizing its operations, improving governance, and protecting its legacy. Whether these goals will be realized depends on the successful execution of the reorganization plan.
What’s next in the Saint Augustine’s University bankruptcy case?
For now, the university is in recovery mode. The coming months will be crucial in determining whether Saint Augustine’s can transition from mere survival to long-term sustainability.
The co-founder and CEO of Self-Help told WRAL in January that they were looking forward to helping Saint Augustine’s University persevere.
“We believed in the mission and potential of Saint Augustine’s University when we provided the lifeline financing on Dec. 30, 2025. We still believe in the mission and potential of Saint Augustine’s…We feel this is a good and responsible path forward.”
As of the spring 2026 semester, Saint Augustine’s University is operational and accredited.
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