KY lawmakers seek to turn KSU into polytechnic school. How rare is intervention?
Under a bill moving through the General Assembly, Kentucky State University would transition to a polytechnic institution, offering four-year degrees with an emphasis on workforce needs, and hand financial oversight to state officials.
Senate Bill 185, passed last week by the Senate and now in the House for consideration, would prompt state intervention at KSU, as the university is in a state of “financial exigency,” according to the bill. Lawmakers said they considered closing the school, which has been plagued by financial and accreditation problems in recent years, but are instead proposing major changes.
It’s rare for Kentucky’s state legislature to intervene at a university to this extent — but not the first time KSU’s financial status has caused concern among legislators.
Under the bill, KSU would offer 10 areas of study (online programs, the College of Education and other programs deemed necessary would remain) for the next five years, enrollment could be capped and limited only to students who have an outstanding balance of less than $1,000 with the university, and any transactions over a certain amount would need to be approved by the Council on Postsecondary Education, the body that oversees higher education in Kentucky.
That spending limit was originally set at $5,000, but lawmakers changed it to $20,000. The original bill language also capped enrollment at 1,000 students, but that was changed to be at least 1,000 in-person students as an enrollment target.
The changes could also bring job cuts, as the bill says the university could retain only faculty and staff necessary to support that enrollment, and it outlines steps for KSU to pay any outstanding bills amounting to more than $1,000 that have been due for more than 60 days.
The bill was originally filed as a shell bill but was later changed to include the overhaul of KSU. KSU is the only school in recent history to see this level of proposed intervention from the state.
State universities and colleges appear generally before legislative committees to discuss their budgets and request money. New doctorate programs had to be approved by the legislature, although last year’s Senate Bill 77 changed that process.
Universities may also be questioned about social issues by legislators, as was the case this year with the University of Kentucky about diversity, equity and inclusion, which was previously banned on state campuses under House Bill 4.
KSU is the state’s only public historically Black university, a status it would retain with the proposed changes. It would also remain a land grant university, a federal designation under the Morrill Acts of 1862 and 1890 that set aside universities for education related to agriculture, science, engineering and military science.
CPE President Aaron Thompson said Monday at committee meetings that the transition “puts (KSU) in a great spot,” and would allow the university to continue offering in-demand four-year degrees.
Last month, the board of regents approved a balanced budget for the remainder of this fiscal year.
“An amended, balanced budget is currently in place for the remainder of the fiscal year, and the University’s focus is on executing that plan carefully and responsibly,” said Michael Strysick, spokesperson for the university.
KSU has just over 2,500 students enrolled in the fall 2025 semester, according to CPE data. The school offers more than 40 “areas of study,” according to the university’s website.
Legislature previously gave KSU $23M
The legislature previously intervened at KSU in 2021 as the school’s financial problems came to a head.
KSU was facing a multimillion-dollar budget shortfall, and in 2022, the legislature gave the university a $23 million loan. Conditions for receiving those funds included creating a management improvement plan with CPE and being placed under state oversight from 2021 to 2025.
At the same time, the university’s board of regents was overhauled via a Senate bill. In 2023, Koffi Akakpo was named the new KSU president.
A final report analyzing the progress of the management improvement plan was issued last year. It found significant progress in university policies and standard operating procedures across the institution.
However, “substantial gaps remain — particularly in the area of finance,” the report from CPE and accounting firm Baker Tilly found.
“This remains the single most critical area, carrying the highest risk rating,” the report read. “Many fundamental financial processes, such as month-end close procedures, reconciliations and timely completion of financial audits, have not yet been fully implemented.”
Budget management was listed as an ongoing weakness for KSU, including fiscal controls, lack of financial reserves and collection of student accounts receivable. The number of days of cash on hand — meaning how long the university could operate using only its cash reserves — at one time dipped to nine days in 2024. It rose to 89 days, but declined again in the fall.
The average number of days of cash on hand for universities is between 120 and 150 days, according to the report.
“At the heart of KSU’s financial challenges is a persistent lack of reliable and timely financial processes. Many foundational elements that are standard at peer institutions remain incomplete or inconsistently applied,” the report said.