It can’t be good when your school pops up at the top of a Google search of “military academies,” “enrollment” and “debt.” But the Georgia school whose notable alumni include Cee Lo Green, Jimmy Carter’s father, a co-founder of Arby’s and the inventor of the singing telegram is steeped in debt and operating in the red.
Riverside Military Academy, which overlooks Lake Lanier in Gainesville, borrowed almost $84 million through a 2007 bond issue from the Gainesville Redevelopment Authority. Most of the money went to reimburse Wachovia and SunTrust banks for draws used to pay for previous bond issues. Gainesville isn’t on the hook for repayment; only the non-profit academy is obligated. It is to repay the bonds by collecting enough tuition, rates and fees, according to the official bond statement.
But expenses at the academy, founded in 1907, have outstripped revenue, according a recent financial filing. In a recent bond rating, Fitch said the academy has a mixed outlook because of recurring operating deficits, and the very high debt burden. However, enrollment has been outstripping projections. The academy reported year-end total enrollment of 417 as of May, up from 301 in 2010/11. And the academy has a good endowment.
If enrollment continues to grow, it might be spared the fate of other U.S. military academies.
In New York, the 126-year-old New York Military Academy, whose alums include Donald Trump, suddenly closed this month after filing for bankruptcy protection in March.
Kentucky’s only military school defaulted on loans and is scheduled to be auctioned Oct. 1, the Lexington Herald-Leader reported.
In North Carolina, after more than 160 years, Oak Ridge Military Academy has struggled with low enrollment in recent years.
Even new military academies, like Francis Marion Military Academy in Ocala, Florida, have run into financial trouble, according to news reports. There, an audit was recently ordered following accusations of financial mismanagement and academic progress of the students.
Riverside, which serves boys in grades 7-12, has a storied history. James Earl Carter Sr. was in the class of 1911; George Oslin, the inventor of the singing telegram, in 1913; UCLA and Vanderbilt football coach Red Sanders graduated in 1923; and Leroy Raffel, a co-founder of Arby’s, in 1944.