The Nelson College Board has decided to repay its historical debt to consolidate its financial position and focus more clearly on its core business of "providing a world-class education to the young men of Nelson".
Nelson College is currently in debt of $2.9 million (as at June 30) and expects its financial situation to deteriorate if no action is taken.
The debt comes from the college's decision to renovate two of its boarding houses between 2015 and 2018.
The school's board of trustees says it has developed a strategy to address its debt which has been independently reviewed and is now working with the Ministry of Education to resolve its financial situation.
The ministry recently confirmed that the college is a going concern and that current payments associated with the debt are within its guidelines.
"Our priority is our ākonga (students). The board is committed to consolidating the college's financial position so that we can deliver our kaupapa of providing a world-class education for the young men of Nelson," said board of trustees chair Deleece Hall.
The original business plan had an expectation that the renovations would result in 190 boarders per annum but it didn't eventuate.
A loan of $2m was taken out from Westpac in 2019, along with an overdraft facility of $1.5m.
The Covid-19 pandemic exacerbated the situation by diminishing the college's international student income since 2020.
And the school doesn't expect international income to fully resume until 2023 at the earliest, and its revised financial plans don't depend on international student income. The majority of Nelson College's boarders have always been from New Zealand rural families.
The board and college say they have developed "three exciting strategic goals" for junior curriculum, student behaviour and academic excellence; and are implementing these as part of a larger five-year strategic plan.
"We're excited about the college's vision," Hall said.
"The headmaster and college staff are working hard to provide quality academic and co-curricular opportunities to our rangatahi."
They are also working closely with whānau, old boys, the Ministry of Education, and other stakeholders to "deliver a world-class education" in Nelson.
"We're confident that we can retire our historic debt and put the college on a sound financial footing for the future," said headmaster Richard Dykes.
"Repaying this debt will reduce the financial pressure on the college especially as interest rates are likely to rise, and allow us to focus positively on our academic, cocurricular and pastoral programmes for our students/ākonga."