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GREENSBORO — Greensboro College, $19 million in debt, has put up its campus and the lion’s share of its endowment as collateral to Bank of America, school officials said Friday.

And a month before classes start, the small liberal arts college is offering four years of free tuition to freshmen honors recruits in an aggressive effort to boost enrollment.

College trustees, seeking to name an interim replacement following the July 7 retirement of longtime President Craven Williams, face a fiscal challenge that threatens the survival of the Methodist-affiliated school.

County land records show the college renegotiated a $16 million loan with Bank of America in December by pledging parts of the circa-1871 campus on West Market Street, along with the president’s

$1.2 million house on Sunset Drive and the as-yet undeveloped J.C. Price Sports Park, formerly GTCC.

But the school’s credit crisis worsened in June, forcing further talks with the bank. In an agreement crafted by lawyers from the bank and the college, according to restructuring officer Edward Sanz, the college moved a $12 million endowment from Wachovia to Bank of America as collateral.

The school also put up its remaining real estate as a loan guarantee — including all of the historic main campus — school controller Marci Peace confirmed Friday.

“Currently, they have all of our real property, and our endowment as collateral,” Peace said. “They definitely have more collateral value than we have debt.”

Board of Trustees Chairman Robert Stout, who announced Williams’ abrupt retirement, did not return phone messages Friday, and fellow board members declined to speak publicly.

However, a former trustee’s reaction to the news that the college owes $19 million in long-term debt was typical of other trustees and faculty members reached this week.

“It is shocking. It is great cause for concern,” said Greensboro businessman Richard Levy, a former trustee who, like some current trustees, said he was unaware that the college was so deep in debt.

“We knew that the debts would come due at some point,” said Levy, whose term ended last fall. “I do remember thinking, 'Is the college generating the kind of revenue that could pay that off?’ One certainly would have expected that the number would have gone down instead of up.”

Part of the debt stems from a growth spurt that began about 2002, raising Greensboro College’s profile and doubling its physical size. Toward that end, the college bought:

* the YMCA at West Market and Mendenhall streets for a student union and gym, at a cost of $5 million;

* University Inn across the street for a dorm, $3.5 million;

*  GTCC property on Freeman Mill Road for a sports park and football field, $2 million;

*  several acres near the Inn for a future outdoor amphitheater, for an undisclosed price.

At a time when nearby campuses such as Elon and High Point universities were growing in programs and recognition, Williams’ vision for these improvements was to help the college market itself and recruit student athletes, for example with the Division III football program.

Yet a look at the college’s full-time enrollment suggests the plan did not work. The school Web site puts enrollment at 1,300 students. But in terms of full-time undergraduate students, who generate the bulk of tuition and fees, the college gave its full-time undergrad entering enrollment to the National Association of Independent Colleges and Universities U-CAN Website database last year as 946; current internal campus estimates put that number as low as 700 for fall.

The pressure the school is under to fill beds for the fall, even with the 2009-10 semester only weeks away, was evident in a recruitment letter dated June 25 and received by some rising freshmen last week.

The letter, sent to prospective students who had not applied to Greensboro College, offers four years of free tuition to the honors program for those who maintain a 3.2 average and pay the yearly $8,990 room, board and fees.

“Time is of the essence,” the letter says. “Our next Campus Connection program occurs on July 25th. Your admission and commitment is necessary prior to this date for us to register you for fall classes.”

Tim Jackson, the Dean of Enrollment who signed the letter, said the college has never tried such a campaign before.

“We had some room in the residence halls and we decided we would do an additional search,” Jackson said Friday. “You’d be surprised how many kids haven’t made a decision. We’ll deal with students right up until the first week of school.”

Even in a time of economic uncertainty for many households, parents and guidance counselors of students who received the letter were struck by the late date.

“It seems rare and quite strange,” said Jackie Upton of Greensboro Day School, a guidance counselor shown the letter a week ago by a graduating senior bound for Duke.

“Why would they think, in July, that students do not have college plans? The national deposit deadline was May 1.

It tells me they may be hungry.”

In an economic storm that left a number of small colleges on the rocks, the tuition-dependent Greensboro College saw Bank of America clamp down on its credit, according to controller Peace.

In October 2008, the college borrowed $2.5 million from the endowment, on top of $1 million it had already borrowed from the fund in the previous six months, Peace said.

Meanwhile, the market had battered the investment fund, as at other colleges and universities. For Greensboro College, the endowment fund dropped from a high of about $25.5 million in late 2007, subtracting trust liabilities, to the current $12 million to $15 million.

Forced to slash salaries by 20 percent in April, and now laboring under an annual

$1.8 million in debt service, according to information filed with the IRS, the college by last month was past due on almost $1 million owed to vendors.

In order for the college to make payroll, according to a memo from Stout to faculty and staff, Bank of

America raised the college’s credit line after the college put up the remaining real estate and moved its account from Wachovia.

Contact Lorraine Ahearn at 373-7334 or lorraine.ahearn@news-record.com