Japanese University Bails Out Broke USIU

Beleaguered United States International University will join forces with a Japanese university group, and in the process will change its name and get an infusion of Japanese money and students, officials announced Friday.

Acting USIU President Kenneth McLennan termed the pact “an affiliation” and said the level of Japanese investment in the campus had not been negotiated. But Stephen Weiner, executive director of the Western Assn. of Schools and Colleges, said it was his sense that the Japanese group wants majority control of the university’s board of directors.

While the financial details of the arrangement won’t be publicly released by the private university for about two weeks, McLennan said the $18 million in USIU debts--liabilities that have put the university’s accreditation on the line--essentially will be wiped clean by the influx of Japanese cash.

USIU’s new partner is the Tokyo-based Teikyo University Group, which owns several universities and other schools in Japan, two universities in England, and one in the Netherlands. San Diego-based USIU becomes the fifth American university in the past two years to affiliate with Teikyo (pronounced TAKE-yo); the others are in Salem, W. Va.; Le Mars, Iowa; Denver, Colo.; and Waterbury, Conn.

USIU, which has its main campus in Scripps Ranch, also has campuses in Irvine, Glendale and abroad in London, Mexico City and Nairobi, as well as two smaller centers in Japan, will be renamed as United States Teikyo University when the deal is finalized.

With the new pact, USIU’s 4,000 students will have access to Teikyo’s universities in the United States and elsewhere, while Teikyo’s 30,000 students in Japan will now be able to enroll for classes in San Diego or USIU’s other campuses, both domestic and foreign.

Teikyo’s university system is described by educators as popular among some Japanese students who cannot qualify for the country’s most prestigious schools, and who want to capitalize on the opportunity to go to school abroad, especially in the United States so they can learn English.

“I’m a happy camper,” said McLennan, who took over as president of USIU in January when founding president William C. Rust was removed by trustees because of financial and academic problems that have hamstrung the university.

“This is a very good thing for our university,” he said. “I strongly support it and look forward to a new era of growth and prosperity.”

Persons familiar with the pending agreement say it calls on McLennan to stay aboard as president at least through the end of the current academic year.

Word of Teikyo’s rescue was given to faculty and staff in a series of meetings on campus Thursday, followed by a public announcement on Friday.

“My reaction was one of relief, primarily because this is an opportunity for us,” said Al Zolynas, and English professor and chairman of USIU’s recently established faculty senate.

“There’s always a certain amount of anxiety, of what might happen down the line, and we can’t predict that,” he said. “But the general feeling I pick up on campus is that this is like being saved at the last moment. Things were getting pretty critical around here.”

Zolynas said he was particularly pleased that Teikyo embraces the same sort of educational philosophy as USIU, of providing a broad-based international perspective to college students, especially those in the upper divisions or pursuing graduate work.

“We like students from all over the world, and there’s the sense that Teikyo will only help us continue that mission and that goal. I have a very positive sense about this.”

Whether USIU’s affiliation with Teikyo will help the San Diego university’s ongoing accreditation problems remains to be seen, said Weiner. Fifteen months ago, the Western Assn. of Schools and Colleges ordered USIU to show cause why its accreditation should not be terminated next March because of a series of academic and fiscal problems. The order is a public sanction reflecting the commission’s judgment that an institution has “deviated substantially” from standards to which accredited universities must hold.

In a two-sentence indictment of USIU, the accrediting association found that “. . . the morale of faculty and staff is alarmingly low; the university has serious financial problems; the university’s financial information does not describe its financial condition with clarity or candor; the university lacks prudent financial management policies; fundamental elements of sound institutional planning, leadership, administration and governance are not in evidence, and the prospects for improvement in the institution are bleak. As a result, the quality of education provided to students at USIU is in jeopardy.”

In the wake of that report, Rust was stripped of his presidency in January and named, instead, as the figurehead chancellor emeritus with no control over the university’s operations.

And in February, the university sold its 74% interest in KUSI-TV (Channel 51) to minority owner Michael McKinnon, for $9 million up front, a $7-million loan and forgiveness of about $7 million in debts.

Still, the university was casting about for additional financial help, said McLennan.

“We made it known throughout various markets that we were interested in discussions relating to investments or financial support for our university,” he said. “That knowledge brought a group to us who was aware of Teikyo’s interest, and that led us to the direct meetings we’ve had.”

The negotiations started in August, he said.

McLennan said the infusion of money from Teikyo was “substantial,” although the final amount was still to be determined. Also still up in the air, he said, is “control of the corporate activities.”

Asked if Teikyo will have majority ownership of the university, he said, “We’re not prepared to say that now.”

He said he assumed that the Western Assn. of Schools and Colleges would give its requisite blessing to the merger. An accreditation team previously was scheduled to arrive on campus next week--the same time as Teikyo officials will be in town--and the two groups will have a chance to meet, he said.

Weiner said the accrediting agency will have to approve Teikyo’s affiliation with USIU.

“Under our standards, substantive changes in the control and purpose of an institution is subject to prior commission approval,” he said. “I spoke to Ken McLennan on Thursday, when he called to inform me of this, and I reminded him at the time that this would fall under our substantive change procedures. In other words, they are not free to unilaterally change the fundamental governance of the institution.”

Weiner said USIU already had made some progress in addressing its multitude of problems, partly by removing the former president, but that the new merger “raises a whole new set of questions. This can be a traumatic change for them.”

He said he had no personal knowledge of Teikyo’s educational soundness, and would talk with his counterparts in other regions of the country to assess Teikyo’s impact and role on the other four campuses it affiliated with in 1989 and 1990.

Teikyo paid more than $4 million for a merger with Westmar College in Le Mars, Iowa, creating Teikyo Westmar College.

Teikyo paid $28 million for the bankrupt Loretto Heights College, one of six branch campuses of Denver’s Regis College.

And Teikyo bought the Salem, W. Va., campus for $12 million, rescuing the 101-year-old liberal arts school--the poorest college in Appalachia--from imminent financial death.

Details on Teikyo’s similar deal with struggling Post University in Waterbury, Conn., were not available.

In a prepared statement, Shoichi Okinaga, president of Taikyo University in Japan, said: “After speaking with many American students, I felt it was very important to give American students an opportunity to study at campuses all across the United States, in Europe and in other parts of the world they might not otherwise get a chance to visit.

“This will continue our commitment to provide all young people, in the United States and elsewhere, with opportunities to open their minds, and to understand the attitudes, perspectives and cultures of other nations.”

McLennan said he knew of no other university system that offered its students the opportunity to attend classes on campuses in six nations on four continents.

“One of the objectives of education at USIU is to expose students to different cultures in different locations with a diversity in ethnic backgrounds. This will broaden that horizon for them,” he said.

Not only will the number of Japanese students coming to San Diego increase in the years to come--from 100 to 200 now attend USIU--but some classes in San Diego will be taught in Japanese--either for English-speaking students wanting to improve their Japanese in a daily classroom environment before they transfer to Japan, or to ease the transition of Japanese students coming here.