Key Takeaways
- • AIC's audited FY2025 statements show unrestricted endowment funds fell to $841,244 at June 30 after a $9.2 million withdrawal during the year, following a $6.2 million withdrawal in the prior year.
- • Net assets without donor restrictions declined to roughly $32 million from a restated $39.99 million, and cash on hand fell from about $8.7 million to roughly $4.6 million.
- • NECHE has placed AIC on show-cause status, requiring the college to explain by January 2027 why its accreditation should not be revoked or placed on probation, citing projected operating losses of $17.1 million through FY2028.
- • The audit carried an unmodified opinion but flagged a material weakness in internal controls tied to net asset classification, and management restated prior figures.
- • Massachusetts is tightening oversight of private colleges, with financial issues to be made public by December 31 each year and the state planning to hire outside financial consultants.
Summary
American International College's audited financial statements for fiscal year 2025 show a sharp contraction in the Springfield school's finances. By June 30, the college held $841,244 in endowment funds without donor restrictions after withdrawing $9.2 million from that account during the year, according to Hoodline's review of the audit. The college had withdrawn $6.2 million from the same pool in the prior year. The Boston Globe has reported a different year-end balance, about $70,255, and a discrepancy with the audited figure that the available records do not reconcile. Both accounts, however, show a steep decline from balances in the millions.
The New England Commission of Higher Education (NECHE) has required AIC to show cause in January 2027 why its accreditation should not be revoked or placed on probation, according to MassLive. NECHE cited projected operating losses of $17.1 million through fiscal 2028 and said cash shortages had forced the college to fully draw its $8 million line of credit. According to AIC's audited statements, that credit line was repaid in full in September 2025. NECHE's published process allows an institution up to two years to show it meets standards or has plans and resources to do so. The Chronicle of Higher Education reported that NECHE previously invoked show-cause status for Bay State College in Boston in 2021, which later shuttered.
The audited net assets without donor restrictions fell to roughly $32 million at the end of fiscal 2025, down from a restated $39.99 million the prior year. Operating activities alone reduced net assets by more than $1 million, and cash on hand declined from about $8.7 million to roughly $4.6 million. The audit received an unmodified opinion, but the auditor flagged a material weakness in internal controls related to how the college classified net assets, and management restated prior figures after identifying misclassified endowment-disclosure balances.
AIC president Nicolle Cestero told MassLive that Fall 2026 enrollment grew year over year, retention approached record highs, net tuition rose by $4 million, and expenses were reduced. The college's website states that total Fall 2026 enrollment was up nearly 13 percent and total giving rose 25 percent. AIC says its accreditation remains in place until the January hearing and is weighing options including the potential sale of unused real estate or other assets. The college also says its federal financial aid eligibility remains intact.
The accreditation action comes amid closures across Massachusetts higher education. Hampshire College received a similar show-cause notice in March 2026 and announced it would close the following month. Anna Maria College announced its closure in April and filed for bankruptcy in June with less than $55,000 in available funds, according to the Boston Globe. In response, the state Board of Higher Education said it would identify and publicize colleges' financial issues earlier, with disclosures due by December 31 each year, and would hire accounting and financial consultants. Under the state's Financial Assessment and Risk Monitoring process, between 2014 and 2022, 24 Massachusetts colleges and universities closed, merged, or began winding down. The Department of Higher Education has also proposed rules requiring audited statements to be posted within six months of fiscal year-end, though it is unclear whether those provisions have been adopted.
The New England Commission of Higher Education (NECHE) has required AIC to show cause in January 2027 why its accreditation should not be revoked or placed on probation, according to MassLive. NECHE cited projected operating losses of $17.1 million through fiscal 2028 and said cash shortages had forced the college to fully draw its $8 million line of credit. According to AIC's audited statements, that credit line was repaid in full in September 2025. NECHE's published process allows an institution up to two years to show it meets standards or has plans and resources to do so. The Chronicle of Higher Education reported that NECHE previously invoked show-cause status for Bay State College in Boston in 2021, which later shuttered.
The audited net assets without donor restrictions fell to roughly $32 million at the end of fiscal 2025, down from a restated $39.99 million the prior year. Operating activities alone reduced net assets by more than $1 million, and cash on hand declined from about $8.7 million to roughly $4.6 million. The audit received an unmodified opinion, but the auditor flagged a material weakness in internal controls related to how the college classified net assets, and management restated prior figures after identifying misclassified endowment-disclosure balances.
AIC president Nicolle Cestero told MassLive that Fall 2026 enrollment grew year over year, retention approached record highs, net tuition rose by $4 million, and expenses were reduced. The college's website states that total Fall 2026 enrollment was up nearly 13 percent and total giving rose 25 percent. AIC says its accreditation remains in place until the January hearing and is weighing options including the potential sale of unused real estate or other assets. The college also says its federal financial aid eligibility remains intact.
The accreditation action comes amid closures across Massachusetts higher education. Hampshire College received a similar show-cause notice in March 2026 and announced it would close the following month. Anna Maria College announced its closure in April and filed for bankruptcy in June with less than $55,000 in available funds, according to the Boston Globe. In response, the state Board of Higher Education said it would identify and publicize colleges' financial issues earlier, with disclosures due by December 31 each year, and would hire accounting and financial consultants. Under the state's Financial Assessment and Risk Monitoring process, between 2014 and 2022, 24 Massachusetts colleges and universities closed, merged, or began winding down. The Department of Higher Education has also proposed rules requiring audited statements to be posted within six months of fiscal year-end, though it is unclear whether those provisions have been adopted.
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