Webster University has received a financial distress designation by the Higher Learning Commission (HLC). The audit, based on fiscal year 2023, determined there was a risk of “going concern” for the university due to its financial status.
Going concern indicates a “substantial doubt about an entity’s ability to continue operating in the foreseeable future,” according to the commission, who announced the designation in a public disclosure notice on Nov. 25.
In an email sent to faculty and staff today, Webster Chancellor Tim Keane stated the university continues to appeal the decision, noting that ”WU’s accreditation was reaffirmed with monitoring for enrollment and financial issues in 2018, and we have been working successfully to address those issues since that time.”
In the fiscal year 2024, Keane continued, “Webster increased enrollments by 27% resulting in a $17.1 million improvement in net assets. This year, fiscal year 2025, Webster has increased enrollments by 1,600 students and revenue by $16.3 million year to date.”
As part of Keane’s promise to maintain financial transparency, he reminded employees the Kairos Strategic Plan, “which will showcase the specific strategic and operational priorities, as well as the ongoing actions to be taken” will be presented on Dec. 19.
“Webster is on track to breakeven this year through the commitment to innovation and efficient operations from our faculty and staff, growth flowing from the equity built in our international brand, and the support of our many stakeholders across the globe,” Keane wrote.
Per the 2023 audit, “The Department of Education (DoE) changed Webster’s process for participating in Title IV funding, essentially making Webster provide additional assurances that the Title IV funds would be protected in case of further financial issues. Webster has appealed that process change because our research shows that the DoE’s calculation of our financials did not follow GAAP guidelines,” Keane stated in the email.
According to HLC’s website, it expects a written response from the chancellor within 14 days of the designation notice. Webster is now required to follow HLC’s special monitoring process required for a financial distress designation.
The process includes regularly submitted reports, and Webster will have an opportunity to host an advisory visit no later than March 2025 on various HLC requirements. Until the visit and decision from the HLC, the financial distress designation will continue, but the university will remain accredited.
According to the HLC, an institution is considered to be in financial distress if the commission has information from news reports, as well as from the accreditation process, from auditors and from the institution itself declaring a financial emergency. The designation is meant to inform the public about current conditions at an accredited college or university and its ability to support educational programs, per HLC requirements.
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