Kentucky State University will drop a quarter of its students from enrollment for unpaid bills, some of which are as high as $40,000 and have lasted two years, the university announced Wednesday.
It's a dramatic first step to what interim President Raymond Burse said will be sweeping changes, including possible furloughs, administrative restructuring and an examination of class offerings.
"We have a lot of broken processes in a lot of places," Burse said in a phone interview Wednesday afternoon. "They were not broken overnight, and it will take a while to fix them, but we will get it done."
Kentucky State faces a $7 million shortfall because 645 students had not paid their bills, but Burse said future cost savings may fill the gap.
Kentucky State's total enrollment in the fall of 2013 was 2,533. In-state tuition and fees run about $7,000 a year.
Burse started on July 1, replacing former President Mary Evans Sias . Had Burse been the president last spring, he said, he might have acted sooner to make sure students paid their bills before registering for fall classes, as many other universities require.
"I didn't expect for 600 students to show up and not expect to have to pay," Burse said. "They moved into dorms, and were going to classes, but had not fulfilled their financial obligations."
In future, students will have to pay outstanding bills before registration, "as opposed to allowing folks to come and then we have to chase them for our money."
Burse said he took the action after months of warnings and financial counseling with students at the Frankfort university.
The process started in August 2013, when students with late bills were informed 22 times about payment plans, he said. Those students were also counseled 13 times.
Last month, Kentucky State paid the debts of 111 students whose account balances were less than $1,000, a total of about $97,000. Burse also ordered $65,000 in scholarships and book vouchers to be given to 42 students who were poised to graduate this year, or who were first-time students.
Burse said he thinks about 200 of the affected students will pay their bills and return to school.
Most universities in Kentucky don't allow students to register for an upcoming semester without first paying their outstanding bills. At Morehead State University, for example, officials contact students who are behind with their bills to help them with possible financial aid and other resources.
"We don't want them to get a bill that's so large they can't graduate," said Morehead Treasurer Beth Patrick.
This fall, Morehead dropped 450 students, or about 4 percent of its 11,000 enrollees, Patrick said. About 200 have already returned to school with bills paid.
Jackie Dudley, vice president for finance at Murray State University, said Murray purged a large number of students about five years ago because it had stopped making students pay bills in full before registration.
At the time, the school dropped 440 students out of about 10,000, but 312 re-enrolled, Dudley said.
"The students had been in a habit of paying late," Dudley said. "The first few semesters you have a higher number until students get used to the academic calendar."
Kentucky State, which has a high number of students with financial need, tried to be altruistic when it probably should have dealt with the issue earlier, said Aaron Thompson, chief academic officer of the Kentucky Council on Postsecondary Education.
"They're going to have to get to a place where they have a baseline of students to work from," Thompson said. "If you never get to that point, it's going to be hard to build back."
Burse made national headlines last month after he donated $90,000 of his salary to help raise wages of Kentucky State's lowest-paid workers . He was Kentucky State's president from 1982 to 1989, and later became a vice president and general counsel at GE.
"The board gave me the charge to come and fix the institution," Burse said. "As we're finding problems we're addressing them. It's all designed to make Kentucky State a stronger and better institution."