ABC11 obtained a new document that reveals some of Saint Augustine's financial status.
According to paperwork, the HBCU entered a financial agreement in May with Gothic Ventures, LLP for a $7 million loan. The agreement states that the money must be used to pay off debts including to the U.S. Department of Education, student refund checks, past due payroll and taxes, audits, and property insurance. The loan has an interest rate of 24% with a 2% loan management fee and a $75,000 due diligence and documentation fee. It lists the university's main campus and off-campus properties as collateral.
Financial experts have concerns.
"I think Saint Augustine's signed this loan because they felt desperate trying to open their school for the fall of 2024," said Martin Eakes, Chief Executive Officer of Self-Help Credit Union.
Eakes told ABC11 that he approached Gothic Ventures' Managing Partner W.H. Kip Johnson III about lowering the 24% interest rate to no higher than 9%.
"That's the honorable thing to do at this point and they have said no to date," he said.
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Eakes estimated that this loan has already accrued nearly $500,000 of interest in almost three months. ABC11 asked whether Self-Help Credit Union would be willing to help the financially embattled university.
"If Gothic would just do what they should do, you won't need us. They could have a 9% loan from a lender already involved, but if they say no, then yes, Self-Help would be willing to step in and help," he said.
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As homecoming celebrations wrap up across the Triangle, alumni of Saint Augustine's said current students didn't have one. There have been a host of issues on campus as the university remains millions of dollars in debt.
ABC11 has also learned that staffers and faculty members are being asked to sign non-disclosure agreements. The document states they should not discuss audits, SACSCOC, and financial information with anyone employed by the university or not. The only exceptions are their direct supervisors, department employees and the university president.
"What would be so important that you would have employees signing a NDA?" questioned Alfreda Hicks, a member of the SAVE SAU Coalition.
ABC11 reached out to Gothic Ventures and Saint Augustine's University for comment but has not heard back.