USIU Given More Time to Fix Its Finances : Education: Accreditation group extends deadline to allow United States International University time to find way to pay debts and improve academic standards.

Vital academic accreditation was continued Wednesday until at least July 15 for the beleaguered United States International University, allowing the institution more time to solve pressing financial troubles that hamper attempts to improve academically.

The Western Assn. of Schools and Colleges made the decision in its continuing effort to have USIU correct severe deficiencies in its academic and financial programs and meet association standards. WASC approval is needed in order for USIU to qualify for federal student loans for scholarships and for its academic degrees to have value to employers or other schools.

While the association found substantial progress made by USIU since first being placed on notice in June, 1989, it said that the university’s present bankruptcy status interferes strongly with efforts to improve academic and administrative components.

“The university has made encouraging progress on a number of issues but its financial condition remains precarious,” the WASC said.

USIU filed for bankruptcy in late December, obtaining time under federal law to draw up a reorganization plan to pay off an estimated $14 million in debts.

That plan must be submitted to federal bankruptcy officials by April 20. While the university has not yet formulated a final proposal, it already has trimmed its payroll substantially by eliminating intercollegiate athletic programs and its costly School of Creative and Performing Arts, and has signalled intentions to sell one or more of its overseas real estate holdings.

“The commission concluded that there has been an enormous mobilization of effort to address and remedy the serious deficiencies that underlay the 1989 sanction,” it announced Wednesday. “There has been a fundamental shift of attitude, attendant upon new administrative leadership, that invites and supports a frank appraisal of problems within the university and the creation of plans for improvement.”

Stephen Weiner, association executive director, praised in particular the appointment of Kenneth McLennan, a retired Marine Corps general, to replace USIU’s iconoclastic founder, William Rust, who was forcibly retired from control of the 38-year-old school last year.

“But its financial condition is a problem not only within itself but has impeded them putting into place a lot of good ideas and plans from faculty and others” to boost library programs, hire more full-time faculty--especially in the School of Human Behavior--and to attract new administrators experienced in higher education, Weiner said.

USIU officials were pleased Wednesday with the additional time given them, saying that they hope to show even more improvement when a new WASC review team visits the campus in early May.

The university has been encouraged that its enrollment dropped only 200 students, to 1,576, in the winter quarter after its announcement of bankruptcy reorganization was announced in December. Continued enrollment is critical since almost all of its $29 million budget is funded through tuition fees.

The university has remained financially current during the first two months of 1991 and its payrolls have been met on time, it said Wednesday. But the university still owes substantial back pay and pension payments to employees.