Guilford College Debates How ‘Quakerly’ It Should Be

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Guilford College had a mysterious money problem.

Each year, the board of trustees would pass a budget, and each year revenue would fall significantly short of projections. “We’re like, ‘What is going on?’” said Jean Parvin Bordewich, who joined the board in 2023.

It was only this year—after the provost, chief financial officer, and president left their positions and Bordewich became the fifth president in five years—that she said the board discovered the issue: The school hadn’t been collecting payments from all of its students.

“We were admitting students, and then not requiring people to pay before they started classes,” Bordewich said. “Don’t ask me why. Every college I’ve ever heard of requires you to pay your bills before you start the semester.”

The policy, which stemmed from a COVID-era decision meant to keep students enrolled, left Guilford with $2 million in uncollected tuition and fees for the 2024-2025 fiscal year.

That shortfall is far from Guilford’s only money problem. An independent audit showed a $2.4 million operating loss over the 2023-2024 fiscal year with a budget of about $50 million. The school is so short on cash that Bordewich said it’s rationing which bills it can pay. In a May 14 meeting, she told faculty and staff to expect more cuts. 

Two people in attendance interpreted her remarks as predicting layoffs, and one remembered Bordewich saying, “We have to make cuts to salaries and benefits.” 

“Adjustments will be determined over the summer for the new academic year, and we do not yet know what specific actions will be taken. All options will be considered,” a Guilford College spokesman said in a statement.

The crisis brings an unwelcome sense of déjà vu. Guilford just barely survived five years ago when an emergency fundraising push during the pandemic staved off layoffs and saved the school.

It’s a point of pride for those involved that that effort was based on the school’s democratic Quaker traditions and community, rather than the business-oriented austerity troubled colleges often adopt. But some alumni worry Guilford’s new leaders haven’t reckoned with the gravity of the situation and are shying away from making difficult choices. 

Guilford is on the verge of losing its accreditation unless Bordewich and her team meet their accreditor’s requirement to balance the budget by June 30. Though it hasn’t missed a payment, the school failed some requirements of its bond agreements two years ago, which finance experts say was technically a default on its obligations. School officials say they have raised $3.3 million since March but have not met their goals for cutting costs and raising other revenues.

If Guilford survives all that, the school is debating dramatically different plans for its longterm revival. One, backed by faculty and, to some degree, by Bordewich’s team, calls for blowing up the higher education administrative model, replacing most of the school’s hierarchy with a Quaker-style deliberative council. The other, endorsed by some powerful alumni, calls for selling land, cutting costs, and investing in majors like business that are popular with students. 

Ultimately, Guilford is trying to resolve fundamental questions about what makes a small liberal arts college meaningful—and whether it can be economically feasible.

Cultural Bonds

Guilford College began when Greensboro members of the Religious Society of Friends, better known as Quakers, founded the New Garden Boarding School in 1837. Originally, all faculty, staff, and students were required to be part of the movement. But within a decade, Quakers made up only half of the student body.

“They needed to recruit outside of Quakers to keep it financially viable,” said Wess Daniels, the director of Guilford’s Friends Center, which nurtures the spiritual lives of students and staff. He estimates that only 30 or 40 of its 1,200 students are Quakers today. (The 2020 U.S. Census of Religion counted just 50,000 Quakers in the country and fewer than 5,000 in North Carolina.)

But Quakers were dominant among the faculty and staff in the early years, even as the boarding school transformed into a small, tight-knit liberal arts college in the late 1800s. 

Guilford’s practices have historically been guided by Quakers’ radically simple, democratic theology. The group believes all people have a direct connection with the divine. Some meetings, as their congregations are called, have no religious leader and they make decisions by consensus. Though Guilford didn’t go quite so far, faculty and staff grew to expect a great deal of input and transparency.

The school became more traditional in the 2000s. It hired its first non-Quaker president, Kent Chabotar, in 2002, hoping he could boost sagging enrollment. He and the subsequent president, Jane Fernandes, were less open with faculty and staff, former professor Richie Zweigenhaft wrote in a 2021 memoir, saying they were “shocked and dismayed” to learn the school issued $73 million in bonds between 2016 and 2018 “without the kind of broad community discussion that once would have been expected.”

The debt paid for various construction projects and renovations to the aging campus, which administrators hoped would attract more students. It didn’t work. 

Over the past eight years, Guilford’s enrollment has fallen nearly 40 percent. The biggest drop came from its adult education program. A college spokesperson blamed decreased demand on the end of North Carolina’s legislative tuition grant program in 2012, as well as the Department of Justice eliminating some of its funding for criminal justice programs. From a high of 1,300 continuing education students in 2009, that number dropped to 45 in 2024.

“We don’t need an army of consultants shipping in best practices from somewhere.”

Mark Dixon, art professor

But the college’s expenses didn’t change, falling just 1 percent over the last decade. And they were already high compared to similar colleges, said college consultants Gary Stocker and Matt Hendricks, driven by a relatively large staff, some outsized contracts on things like food service, and large building maintenance costs.

By 2020, the school was spending more than 10 percent of its annual budget on debt service, drawing heavily from its endowment in the process.

“They’re robbing the piggy bank to keep the lights on,” Stocker said.

When the COVID-19 pandemic began, Guilford’s budgetary woes turned into a full-blown crisis. Fernandes furloughed a third of the college’s faculty and staff in April 2020. Faculty protest led to her resignation in June 2020, but not before she laid off dozens of staff. 

Fernandes’ replacement, Carol Moore, proposed eliminating 19 majors and laying off a third of the faculty that November.

Faculty conducted the first votes of no confidence in Guilford’s history for both Moore and the board. Both passed with more than 90 percent support. Their organizing spurred alumni to launch an emergency fundraising campaign that raised $3.3 million by January 2021, promising the money “if the college evolves in a direction we as donors feel we can support.” 

Moore left, and the college canceled the second round of layoffs. Guilford also worked with alumni to raise an additional $4 million by the end of May 2021, and $6.7 in total by the end of the year.

Financial Bonds

But Guilford’s underlying financial problems remained, and its accreditor, the Southern Association of Colleges and Schools (SACS), began circling. 

COVID-era stimulus money balanced Guilford’s budget for a few years, but those programs ended. The school had begun allowing students to start classes without paying their bills during the pandemic in the hopes of avoiding COVID-related enrollment declines, but that led to the missing $2 million in student payments. Guilford’s premier annual event, the Bryan Series of lectures, is ending due to competition with other local events.

SACS placed the school on probation in December 2023 for failing to meet financial requirements. Last December, SACS extended Guilford’s probation for another year, adding an additional demerit for inadequate financial resources.

Under SACS rules, colleges can only be on probation for two years, so Guilford must address its issues this year or it will lose accreditation. In practice, that means Guilford must balance this fiscal year’s budget. Bordewich’s team, which took over this year, is aiming to raise $5 million in gifts, cut $3 million in expenses, and generate $3 million in other revenue by June 30.

The goals also could be important for appeasing Guilford’s bondholders, who have an equally powerful role in determining the college’s survival.

Under its two bond agreements, Guilford is obligated to maintain net operating revenues at least 1.25 times higher than its annual debt service payments. If it doesn’t, the school has to commission and follow an independent consultant’s recommendations to improve its balance sheet.

Guilford dropped below the required ratio in fiscal year 2023, though administrators say they didn’t know it. 

A college spokesperson said in a statement they weren’t aware until spring 2025. Acting Chief Operating Officer Keith Millner said he learned about the issue in March, when Guilford received a consultant’s report after failing to meet the debt service coverage ratio again in fiscal year 2024. But S&P Global Ratings noted the violation in October 2024 when the agency downgraded Guilford’s credit outlook. 

Guilford didn’t produce the required report for 2023. “Your guess is as good as mine,” Bordewich said when asked about it. 

The failure carries the same legal consequences as if Guilford hadn’t been making its payments, according to the bond agreements. 

The primary bondholder, Bank of New York Mellon, could have demanded immediate repayment of the bonds’ outstanding principal and interest—which totaled $60 million in June 2024—or it could have placed Guilford in receivership. BNY didn’t respond to requests from The Assembly; a school official said the bank declined to comment.

The 2024 report, produced by First Tryon Advisors, is damning. 

It documents a months-long effort to obtain recent budgets and financial statements from Guilford. During that process, Guilford’s then-chief financial officer informed the advisors that his position had been eliminated. 

The budget Guilford eventually provided didn’t match the one approved by the board of trustees, First Tryon wrote, and Guilford’s calculations of its debt service coverage ratio didn’t match calculations from an independent audit. Guilford also provided different debt service amounts than its auditor, and First Tryon couldn’t determine how either reached their numbers.

“A successful marketing strategy that guarantees a bigger profit margin…is when you can be in a niche market that people find valuable.”

Jean Parvin Bordewich, Guilford’s acting president

First Tryon also noted that Guilford overspent its board-approved budget in 2024 by $10 million. One of the explanations the school provided for the expenditures leading to the overage was, “Departments misunderstanding how to read the new budget reports.”

A college spokesperson said in a statement that, because Guilford had already engaged First Tryon by the time it discovered the earlier debt service coverage ratio issue, BNY agreed not to exercise its rights under a default.

That outcome is typical in a case like this, said Wake Forest University law professor Steve Nickles. The bonds aren’t backed by land or other collateral, just Guilford’s future revenues, so anything that harms the school’s business outlook is not in the bank’s interest. However, in a case where the school may lose accreditation and go under, bondholders could decide that drastic actions are necessary.

“One could argue that their best hope is if they could get a receivership, get new management, and make the college profitable within a reasonable time,” Nickles said after The Assembly explained Guilford’s situation.

So far, Guilford has not been on track with First Tryon’s recommendations, as required. The consultants’ report recommends developing a budget that meets debt service coverage ratio requirements. It also says Guilford is projected to fail the requirement again this year—and they project the shortfall to be worse than ever. In an alumni Zoom call in early May, Millner said early projections showed a $10 million deficit for 2026, according to two people who attended.

“We are currently building an FY26 budget,” the school said in a statement when asked about the projections.

Chop From the Top

In Quaker worship, the meeting’s members sit in collective silence, sometimes for an hour or more, until someone feels moved to speak. 

“There’s times where you’re given a message that you need to share with the group, and you know it because your palms are sweaty, your stomach has butterflies, and you’re just like, ‘Oh my gosh,’” said Daniels, the Friends Center director.

He had a similar feeling in March 2020 while he and the rest of Guilford’s presidential cabinet were meeting to decide which staff to furlough. “I felt just sick to my stomach,” Daniels said. 

Eventually, he spoke up, telling the group that he couldn’t continue in good conscience until they discussed taking pay cuts themselves. Two others backed him, but the conversation was quickly shut down, Daniels said.

In the team led by Bordewich, many faculty and alumni say they see their values in action. She was raised in a Quaker family, attended Guilford for two years before transferring to Brown University, and helped with the COVID-era fundraising campaign. Now, Bordewich and four other trustees are volunteering full-time to help the school through its current crisis. Faculty say the team is approaching the work in an open way, hosting frequent community meetings and sending weekly updates.

“We don’t need an army of consultants shipping in best practices from somewhere,” art professor Mark Dixon said. “They don’t work on us. We’re too specific. We’re a custom shop.”

Daniels had already been thinking about ways to make the college even more “Quakerly,” and he eventually diagrammed an idea on a sheet of paper. It would create a college council to govern the school alongside the president’s cabinet. The thing he couldn’t quite work out was how to make the two bodies work alongside each other.

Last September, Daniels was sitting with a group of faculty, staff, and alumni when he pulled out his sketch and folded it to remove the presidential cabinet from the picture. “I think we need something like this,” he said. In essence, his idea was to get rid of most top administrators.

Since then, Daniels has been fleshing out the idea. The current version would create a college council composed of the president, provost, student body president, faculty and staff leaders, and representatives from five new “affinity groups” of departments and offices across campus.

The plan would lean into Quaker values, with a flattened hierarchy and emphasis on a deliberative approach. The experience of the past five years, with all of its upheavals and crises, only adds to proponents’ belief that this model would be better than a more traditional, top-down approach.

“Those of us who’ve been told to sit down and shut up have been proved to be correct about how bad things are,” said Jill Peterfeso, one of the professors who was laid off then brought back in 2021.

Bordewich said she hasn’t adopted that plan—“We just don’t have the bandwidth to fully implement it right now,” she said—but Guilford has been taking steps she said were “consistent with the direction” of it. First and foremost, they already eliminated all vice president roles.

While small colleges have been hit with financial blows across the country, Bordewich argued that it helps Guilford that it doesn’t have to attract a large student body. Instead, they can focus on the students who want a unique experience. For them, a communally run college could be a selling point.

“A successful marketing strategy that guarantees a bigger profit margin, if you want to say that—I do have an MBA—is when you can be in a niche market that people find valuable and they want to be part of,” she said. 

Long-term, her vision is a Guilford that better nurtures its alumni community and invests in full-time faculty who build enduring relationships with students, rather than increasingly relying on part-time adjunct instructors. They would teach in a way that brings a Quaker inflection to the classroom, as in Guilford’s MBA program, which launched in 2022 and emphasizes ethical, socially responsible leadership.

Out of the Woods

Mark Cubberly is unconvinced.

Though he agrees that Guilford’s “community feeling” is what sets it apart, the alumnus believes the time has passed for such radical thinking. In its current economic climate, he says, Guilford has no choice but to do what Dixon, Daniels, and others are desperately trying to avoid: Think like a business.

“The trustees waited too long,” he said. “What they’re currently doing is admirable. But it is, in my view and in many other alums’ views, way too late in the game. They should have been doing this two years ago. The data was there to show that we needed the change.”

A former municipal consultant whose daughter also attended Guilford, Cubberly has been involved in the alumni community since he graduated in 1979. But he’s become a fixture since he retired to Greensboro two years ago. And he’s deeply frustrated.

“This kumbaya stuff is for the birds now.”

Lucia Safran Messina, Guilford College alum

Recently, Cubberly said, he helped facilitate a meeting between Guilford’s then-CFO and a real estate broker to discuss selling part of the Guilford Woods, an undeveloped, 240-acre section of campus.

Faculty and staff have been opposed to their sale for years because of what Bordewich called their “historic value and environmental value,” largely due to their connection with the Underground Railroad, which area Quakers were part of. In his memoir, Zweigenhaft complained that the school had considered using the woods as collateral around the time it issued its bonds.

Guilford owns 349 acres in total, but its buildings are contained to about 90 of them, and some developable tracts are at least an hour’s walk from the main campus buildings, Cubberly said. SACS has encouraged the school to explore the option.

But no deal has come to pass.

Bordewich said selling land is “something we would only do in extremis,” and that her team is looking for ways to monetize it instead. One option is a conservation easement with the Piedmont Land Conservancy, though no deal has been reached.

“What we have is some stodgy faculty and, even before that, board members and provosts who didn’t want to sell any land, and I say to them: Whose job are you giving up here?” said Lucia Safran Messina, an alum and descendant of the Doaks, a Quaker family that was among Guilford’s founders. “Because Guilford won’t be here. It’s just like talking to a gravestone, because they just don’t want to hear it. They don’t do the necessary things to save Guilford. And that would be Jean and the board.”

The Bottom Line

If land is the short-term issue, the long-term one is—once again—laying off faculty and cutting small majors. 

Though he admits it’s not a popular view in the Guilford community, Cubberly believes the college’s finances required the school to downsize long before now—though previous leaders “took an ax to the situation when it really only needed a scalpel,” he said.

“It’s as if they forgot that they needed to right-size” after the COVID crisis, he added. “Because the enrollment decline has been pretty consistent since 2014, with some minor exceptions.”

Stocker, the consultant, agrees and encourages Guilford to explore a “course-sharing, major-sharing arrangement” with other colleges. And one of First Tryon’s recommendations—which Guilford’s bond agreements say it must follow—is identifying low-demand programs and “right-sizing” them. 

Bordewich seems to have acknowledged as much when she announced more budget cuts would be coming on May 14. Details are still unclear, but she told faculty and staff the college had no choice, given its financial situation, according to the two participants.

Cubberly argues Guilford must reduce its faculty and staff to avoid trouble with its accreditor and bondholders.

“I think Guilford does not need to reinvent the wheel on how colleges can succeed,” Cubberly said of the plan to run Guilford by council. “I have great reservations about how SACS is going to view a college that has just eliminated its top management, right in the middle of this battle to get off of probation.”

Cubberly and Messina both say they hoped to avoid publicly criticizing the school. But they worry Guilford will meet the same fate as St. Andrews and Limestone universities, two small liberal arts colleges that announced their closures in recent weeks.

“My objective is to get the facts out there and get the right people in play and save this damn school if possible,” Cubberly said.

While others have praised Bordewich’s team for their transparency and community-oriented approach, Messina, who helped lead the fundraising campaign that saved Guilford a few years ago, believes they aren’t taking the thorniest issues seriously enough.

“This kumbaya stuff is for the birds now,” she added.

For all their differences, though, they have the same hope as Daniels, Dixon, Bordewich, and everyone else involved: that Guilford can somehow do for itself what it does for those who enter its classrooms.

Every spring, Dixon teaches an intro to college class for first-year students who failed it in their first semester. 

To teach them how to learn from failure, he gives students four feet of aluminum foil and asks them to make a five-inch tall structure that holds as many books as possible. They do it over and over again throughout the semester, until the last day, when they do a final test.

This year, one student’s attempt was so strong Dixon ran out of books and had to run to his office for more. In the end, her structure held 62 books.

“I love a student who knows how to hit a wall flat and then dust off and keep going,” he said.

Correction: Kent Chabotar became president of Guilford College in 2002.