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A student and an employee at Alderson Broaddus University, which is set to close, have each sued the private West Virginia institution, alleging its leaders didn't disclose the extent of its financial problems and that closure was imminent.
Twin lawsuits against the Baptist-affiliated institution were filed in a state circuit court this month. They seek to be class action, so any student enrolled for the coming term and a large contingent of Alderson Broaddus employees could benefit.
The complaints escalate myriad troubles at Alderson Broaddus, which recently lost its accreditation and degree-granting power.
Alderson Broaddus serves as a case study of sorts amid this year’s spate of college closures — specifically pitfalls to avoid when winding down institutional operations. Other shuttering colleges cited some of the same financial difficulties as Alderson Broaddus but had lined up transfer plans for their students and closed down months ahead of the academic year.
In contrast, Alderson Broaddus’ students learned of the college’s downfall a little less than three weeks before they were expected back on campus.
What do the lawsuits say?
The college’s long-standing financial troubles prompted rumors ahead of the 2022-23 academic year that it could close, according to a law firm representing its employees and students.
So widespread was the gossip that administrators contacted employees in November, promising them 90 days’ notice before shutting down or terminating employees, the lawsuit states.
However, early this month, staff read a news article that suggested Alderson Broaddus would close, blindsiding them, according to the lawsuit. They were not provided any notice, according to D. Adrian Hoosier II, one of the lawyers representing the plaintiffs.
Many employees turned down or didn’t seek other employment, according to his law firm’s announcement. Some had moved from out of state to work at the institution. And many of them wanted to take advantage of a program for employees’ children that offered free tuition and other perks.
Hoosier provided the complaints to Higher Ed Dive on Tuesday but did not offer additional comments.Alderson Broaddus spokesperson Cary Sponaugle said in an email Tuesday the university does not comment on pending litigation.
The employee-led lawsuit alleges the communication in November pledging a 90-day notice of closure constituted a contract that the university’s leaders didn’t uphold. And even though university officials were aware the institution was perilously close to closure, they directed staff to continue to recruit students, employees contend.
The lawsuit states that because of the administration's actions, employees lost job opportunities and wages and suffered emotional pain.
Students similarly learned around Aug. 1 that the university would close — in a news article,according to the student-centered lawsuit.
Alderson Broaddus sent an email to students Aug. 3 confirming it would shut down about 18 days before classes were due to begin, the complaint says.
The university knew, or should have known, that it wouldn’t be able to keep operating before the beginning of the month but still recruited and enrolled students, charged them tuition and assisted with financial aid, the lawsuit states.
Both the students and employees want compensatory and punitive damages.
A troubled history
While Alderson Broaddus has struggled financially in the past, public hints it could close came more recently.
In July, state policymakers allowed it to continue operating — but only provisionally.
West Virginia’s Higher Education Policy Commission that month authorized the university’s degree-granting authority through June 2024 but remained skeptical of its financial condition. The commission required it to develop plans to help students transfer to other institutions and secure their financial aid and academic records through a third party.
However, news headlines continued to suggest Alderson Broaddus was teetering on the edge of collapse.
Later that month, it came to light that local government authorities threatened to cut off its utilities after it failed to pay a roughly $776,000 bill.
West Virginia Gov. Jim Justice had publicly urged to try to save the institution, and the university struck a deal with the city of Philippi to pay off its debt. But during an emergency meeting on the last day of July, the state’s policy commission voted to rescind operating approval, effective at the end of the year.
Shortly thereafter, Alderson Broaddus voluntarily surrendered its accreditation with the Higher Learning Commission, or HLC.
It’s in the midst of working with other institutions, including West Virginia Wesleyan College and Davis & Elkins College, to help students transfer there.
Alderson Broaddus, located in northeast West Virginia, had been bleeding enrollment for years, falling to 767 students in fall 2022 from 1,108 in fall 2014, according to federal data.
News reports suggest its enrollment would have been even smaller for the coming term.
HLC had put it on probation in 2017, in part because it defaulted on bond repayments totaling $36 million a couple of years prior. The probation ended in 2019.
At the same time, HLC notified Alderson Broaddus that it could fall out of compliance with the accreditor’s standards because of its financial shakiness. HLC lifted that sanction in June 2021.
