Federal agencies demand records on Saint Augustine’s $30 million grants

Federal agencies gave Saint Augustine’s University until noon Wednesday to turn over records showing how it spent more than $30 million in grant money and to provide a witness who could answer questions. The demand lands in Raleigh as the historically Black university tries to stabilize itself inside Chapter 11 bankruptcy, where every missed filing, unpaid bill and unanswered question threatens a school already fighting for survival.

The federal request covers 34 grants. The biggest share came from the U.S. Department of Education, including several awards totaling $13 million that were meant to strengthen management and fiscal operations. More than $2 million was also awarded to restore and preserve historic buildings, including the campus chapel, even as a company is now suing Saint Augustine’s over unpaid work on that same chapel. A separate U.S. Department of Commerce grant was intended to improve internet bandwidth and connectivity, but two IT companies say they are owed more than $2.5 million and have filed lawsuits in Wake County.

Those grant questions now sit on top of a deeper financial crisis. Saint Augustine’s filed for Chapter 11 bankruptcy on April 27, 2026, in the Eastern District of North Carolina under case number 5:26-bk-01864. The school has been operating under record-low enrollment, a shift to online-only classes, millions of dollars in debt and the loss of accreditation, pressures that pushed the campus into court protection.

Federal education data show undergraduate enrollment dropped to 173 students in 2024-25, down from 930 undergraduates in 2023-24. By fall 2024, the campus student body was about 200 students. For a Raleigh institution founded in 1867, that collapse in head count means less tuition revenue, fewer people living and learning on campus, and less cushion when vendors, lenders and federal regulators come calling.

The accreditation fight has only sharpened the strain. The Southern Association of Colleges and Schools Commission on Colleges voted on Dec. 8, 2024, to terminate Saint Augustine’s accreditation, and an appeals committee affirmed that decision on March 5, 2025. The university said it would pursue arbitration after losing the appeal, and it said December 2024 and May 2025 graduates would receive degrees from an accredited institution during that process.

Financial pressure also came from a Wake County courtroom in June 2025, when a judge ordered Saint Augustine’s to pay SBA Connect, LLC $20,234,785.30, plus interest and attorney’s fees. Another Raleigh company, Avaria, said it had provided services on an ongoing basis since at least 2020. With the board in transition and Sophie Gibson identified by the university as the first woman to chair it, the stakes now run beyond compliance paperwork: if the school cannot satisfy federal regulators, it risks more delay, more debt and another blow to its ability to keep operating in Raleigh.