National Hispanic University in San Jose, Calif., has stopped enrolling new students due to financial problems, The San Jose Mercury News reported.

The struggling campus stunned students, faculty and community leaders who hoped the private college would become a powerhouse in Latino education, The San Jose Mercury News reported.

"The reality is we're in a very difficult financial situation," the university's president Gladys Ato told The San Jose Mercury News.

Ato added that the admissions moratorium was implemented to give university officials times to ponder the next move for the school.  She said the college will focus on serving the 600 currently enrolled students.

Ato and Laureate Education Inc., a private college chain that purchased the university four years ago, declined to immediately discuss with reporters the next step for National Hispanic University.

Shortly after purchasing National Hispanic University, Laureate Education announced plans for introducing Internet classes at the school for up to 8,000 students. However, the plan did not mesh well with the school's ambition.

"That goal was never met," Ato said. "We were very, very far from reaching it."

In spring 2013, the school suffered another setback in 2013 when the U.S. Department of Education withdrew financial aid students enrolled in the university's liberal art program. The San Jose Mercury News reported that at the time, the federal government was "pulling back such support for degree programs that did not offer good prospects for employment."

The reluctance of university officials to publicly speak about their options "has opened a floodgate of fears that the East Side institution will close its doors for good or become just an online diploma mill," The San Jose Mercury News reported.

Latino community leader Victor Garza expressed his concern to The San Jose Mercury News about the future of National Hispanic University.

"What's next?" he asked. "They are talking like the patient who has body pains but won't tell you where it hurts."

Ato said she expects the university's board and Laureate to announce their plans within two months. According to The San Jose Mercury News, town hall meetings have been held with students and parents; another one is expected to be held Saturday morning.