The Advance-Titan

Financial crisis could harm scholarships

While the University of Wisconsin Oshkosh says student scholarship money is safe in the event of a UWO Foundation bankruptcy, a member of the Foundation board and an associate bankruptcy attorney say it is unclear how secure that money really is.

According to State Representative and Foundation board member Amanda Stuck, scholarships might be in jeopardy depending on the Foundation’s financial condition.
“If the Foundation goes under, scholarships could go away for a little while,” Stuck said.

According to the Foundation website, the purpose of the Foundation is to “promote, receive, invest and disburse gifts to meet the goals and needs of UW Oshkosh,” which includes student scholarships.

According to tax documents, the Foundation gave $267,500 to students via scholarships in 2014.

Nothing has been decided regarding the fate of Foundation, but Stuck said one possible path the Foundation might take to cover the organization’s debt is filing for bankruptcy. If the Foundation does end up filing for bankruptcy, it could impact the money stored within the Foundation, including scholarship funds.

UWO’s chief communication officer Jamie Ceman said funds reserved for student scholarships are not at risk even if the Foundation declares bankruptcy. She referred all other questions to Foundation officials.

Stuck said the Foundation is working to raise money in order to pay off the outstanding debt, but says it is hard to concentrate with everything that is going on between the Foundation and the University.

“The Foundation is kind of in limbo for what’s going to happen with the debt that it has,” Stuck said. “With the lawsuit going on, it is hard to focus on raising the funds.”

Stuck said the Foundation board is working with lenders who will raise money to help the Foundation climb out of debt.

“If the Foundation can’t reach deals with lenders, the Foundation may have to go into bankruptcy,” Stuck said. “It has been discussed as a possibility, but I don’t know the likelihood of it.”

Rachel Sandler, Bankruptcy and Foreclosure Associate Attorney at Gregory K. Stern, P.C. in Chicago, Illinois said if the Foundation does end up filing for bankruptcy, all assets become property of the estate.

“Depending on how the scholarship funds were directed, it is possible that the funds could lose the designation as scholarship funds and be used to pay back the Foundation’s creditors if commingled,” Sandler said.

UWO Professor Jennifer Mihalick, chairwoman of the chemistry department, said the University has not contacted her department to inform them how a potential bankruptcy could impact their scholarship accounts.

“It could be that they just don’t know yet, but so far they haven’t told us if anything will change,” Mihalick said.

Mihalick said chemistry alumni, faculty and staff donate money to three scholarship accounts in the Foundation in order to help students with their educational expenses.

According to Mihalick, these scholarships range from $100 to $1,000. She said the amount the department awards toward scholarships differ each year depending on how much the Foundation says their department has available to give out in scholarship money.

Most of the scholarships for the 2017-18 school year have already been awarded to students, Mihalick said.

“I think students would like to know the status of where their scholarship money is,” Mihalick said. “Students have been informed they are getting scholarships and we hope that won’t change. I think it would be nice to know if those scholarships are guaranteed for the next academic year.”

According to Mihalick, she is uneasy because she knows students are counting on the money, especially with how expensive college is.

“We are concerned because [students] have been promised this money off of their tuition and we hope that it won’t be affected by bankruptcy, but at this point nobody has said what’s going to happen,” Mihalick said.

Sandler said departments on campus should be nervous about the standing of scholarship money.

“All departments should be worried because they do not know if the Foundation was managed properly and what the documentation shows,” Sandler said.

According to Stuck, foundations are an essential part of universities today, and if the current Foundation did end up declaring bankruptcy, another Foundation would most likely come about soon after.

“If the UWO Foundation goes under, a new foundation would almost certainly show up,” Stuck said. “Foundations are needed by colleges with all the budget cuts that they face.”

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Independent Student Newspaper of the University of Wisconsin Oshkosh
Financial crisis could harm scholarships