Chicago State University in the city’s South Side on Thursday claimed fiscal exigency, equivalent to college bankruptcy, as Illinois goes into its eighth month without a budget.
The 5,200-student institution founded in 1867 warned last month that it would soon need to declare a fiscal crisis to stay afloat. Tom Wogan, a university spokesman, confirmed in an e-mail that the board of trustees claimed fiscal exigency during a meeting Thursday. The move allows the school to more easily adjust contracts.
The school is running out of cash as it covers the loss of state funds as Illinois remains without a budget for the year that began July 1. About 70 percent of Chicago State’s students relied on financial aid in 2013. It only had a $5 million endowment as of June 30.
Chicago State has about $12 million of municipal bonds outstanding. Wogan said last month that all options are on the table to get through the current semester, including missing interest payments. MBIA Inc.’s National Public Finance Guarantee Corp. insures the debt.