In 1993, with 82% of enrolled students receiving financial aid, there was a high default rate on student loans and enrollment was dropping well below projections. An auditor's report had shown the college was "essentially bankrupt" and at the time was at least $3 million in debt. By the Fall of 1994, another enrollment drop forced them to borrow $2 million to get through the 94-95 school year; a violation of North American Division working policy to borrow money for operating purposes. In May 1995, the AUC had $6.2 million in debt. Approximately $3 million was owed to the Atlantic Union Revolving Fund and $2.4 million owed to the General Conference. By August 1995, AUC met their first cash crunch and were forced to dip into the endowment funds to meet payroll. This process was repeated in November and December of the same year until the endowment funds were exhausted.