Colleges in Dire Financial Straits

[Golazo]

Concordia (Portland) will close https://www.oregonlive.com/education/2020/02/portlands-concordia-university-will-close-at-end-of-spring-semester.html

Probably due in part to the shenanigans in growing their online side https://www.oregonlive.com/portland/2016/10/concordia_gained_thousands_of_new_students_--_and_a_federal_inquiry.html

But still surprising, I would have though Warner Pacific or Corban more likely to close. No reason for any institution in Portland to close other than bad management.

[Wahoo Redux]

Concordia (Portland) will close https://www.oregonlive.com/education/2020/02/portlands-concordia-university-will-close-at-end-of-spring-semester.html

Probably due in part to the shenanigans in growing their online side https://www.oregonlive.com/portland/2016/10/concordia_gained_thousands_of_new_students_--_and_a_federal_inquiry.html

But still surprising, I would have though Warner Pacific or Corban more likely to close. No reason for any institution in Portland to close other than bad management.

Marylhurst closed a couple of years ago.  One would think with the influx of Californians to the PNW that there'd be a lot more students swimming around there, but one would think wrong.  Guess the PNW is getting all the retirees. 

[spork]

Concordia (Portland) will close https://www.oregonlive.com/education/2020/02/portlands-concordia-university-will-close-at-end-of-spring-semester.html

Probably due in part to the shenanigans in growing their online side https://www.oregonlive.com/portland/2016/10/concordia_gained_thousands_of_new_students_--_and_a_federal_inquiry.html

But still surprising, I would have though Warner Pacific or Corban more likely to close. No reason for any institution in Portland to close other than bad management.

To me this looks like total fiduciary irresponsibility on the part of admin and trustees. Concordia's total FTE went from 1,400 in FY 2007 to 8,200 in FY 2015, then declined to 4,750 in FY 2018. Total expenses ballooned from $27M in FY 2007 to $159M in FY 2016. Even though the university was almost always in the black (at least according to its IRS filings), it was immediately burning all the cash coming in on new, risky projects and not improving its margins.

[Hibush]

Concordia (Portland) will close https://www.oregonlive.com/education/2020/02/portlands-concordia-university-will-close-at-end-of-spring-semester.html

Probably due in part to the shenanigans in growing their online side https://www.oregonlive.com/portland/2016/10/concordia_gained_thousands_of_new_students_--_and_a_federal_inquiry.html

But still surprising, I would have though Warner Pacific or Corban more likely to close. No reason for any institution in Portland to close other than bad management.

To me this looks like total fiduciary irresponsibility on the part of admin and trustees. Concordia's total FTE went from 1,400 in FY 2007 to 8,200 in FY 2015, then declined to 4,750 in FY 2018. Total expenses ballooned from $27M in FY 2007 to $159M in FY 2016. Even though the university was almost always in the black (at least according to its IRS filings), it was immediately burning all the cash coming in on new, risky projects and not improving its margins.

Did they hire trustees from burned out Silicon Valley startups?  The growth model is familiar.

[apl68]

New campus, new apartments, etc.--looks like they decided to gamble big in a declining market.

Note how neighboring institutions are losing no time trying to recruit Concordia's soon-to-be-orphaned students.

[Wahoo Redux]

Also from the article:

"Concordia hired HotChalk, Inc., a technology company, to help it grow enrollment and revenue. HotChalk attempted to do that in part by building a new online education operation.

Online instruction was the pivotal force that propelled Concordia's rise to one of the nation's largest providers of Master of Education degrees. But it was a spendy relationship, both financially and otherwise. Concordia paid HotChalk more than $59 million in 2016 and another $30 million in 2017, according to its tax returns.

In 2015, the U.S. Department of Education alleged Concordia illegally outsourced some of its online programs to HotChalk. A $1 million agreement was reached to settle the claim while denying wrongdoing.

Nevertheless, the Concordia-Hotchalk partnership remains intact, Ries said, despite the university's plummeting enrollment.

Online does not seem to be the panacea that so many people think it is.  And mein gott, the amount of money!?!? 

[spork]

Concordia (Portland) will close https://www.oregonlive.com/education/2020/02/portlands-concordia-university-will-close-at-end-of-spring-semester.html

Probably due in part to the shenanigans in growing their online side https://www.oregonlive.com/portland/2016/10/concordia_gained_thousands_of_new_students_--_and_a_federal_inquiry.html

But still surprising, I would have though Warner Pacific or Corban more likely to close. No reason for any institution in Portland to close other than bad management.

To me this looks like total fiduciary irresponsibility on the part of admin and trustees. Concordia's total FTE went from 1,400 in FY 2007 to 8,200 in FY 2015, then declined to 4,750 in FY 2018. Total expenses ballooned from $27M in FY 2007 to $159M in FY 2016. Even though the university was almost always in the black (at least according to its IRS filings), it was immediately burning all the cash coming in on new, risky projects and not improving its margins.

Did they hire trustees from burned out Silicon Valley startups?  The growth model is familiar.

I would not be surprised if backdoor connections existed between a high-ranking administrator or trustee and HotChalk, given the $160 million in play. It looks like Concordia got snookered into buying the higher ed equivalent of a pump and dump boiler room operation.

[TreadingLife]

Has anyone read "The College Stress Test"?  https://jhupbooks.press.jhu.edu/title/college-stress-test
Is it being discussed on your campuses or in certain administrative circles?

I'm terrified curious to see the results for my institution. If I had a cost of living increase, I might be able to afford the new book.

[Hibush]

Has anyone read "The College Stress Test"?  https://jhupbooks.press.jhu.edu/title/college-stress-test
Is it being discussed on your campuses or in certain administrative circles?

I'm terrified curious to see the results for my institution. If I had a cost of living increase, I might be able to afford the new book.

See my comment from Feb 2 on this thread. A fairly small proportion of schools are in dire financial straits. But they straits for them are very dire.

[apostrophe]

Concordia (Portland) will close https://www.oregonlive.com/education/2020/02/portlands-concordia-university-will-close-at-end-of-spring-semester.html

Probably due in part to the shenanigans in growing their online side https://www.oregonlive.com/portland/2016/10/concordia_gained_thousands_of_new_students_--_and_a_federal_inquiry.html

But still surprising, I would have though Warner Pacific or Corban more likely to close. No reason for any institution in Portland to close other than bad management.

To me this looks like total fiduciary irresponsibility on the part of admin and trustees. Concordia's total FTE went from 1,400 in FY 2007 to 8,200 in FY 2015, then declined to 4,750 in FY 2018. Total expenses ballooned from $27M in FY 2007 to $159M in FY 2016. Even though the university was almost always in the black (at least according to its IRS filings), it was immediately burning all the cash coming in on new, risky projects and not improving its margins.

Did they hire trustees from burned out Silicon Valley startups?  The growth model is familiar.

I would not be surprised if backdoor connections existed between a high-ranking administrator or trustee and HotChalk, given the $160 million in play. It looks like Concordia got snookered into buying the higher ed equivalent of a pump and dump boiler room operation.

Yes, something seems off.

[Wahoo Redux]

On Concordia from IHE.

[apostrophe]

On Concordia from IHE.

Thanks for posting. The article barely mentions HotChalk, but someone in the comments says:

". . . HotChalk has disclosed that it is a main beneficiary of tuition revenue. (It's been trying to sell this model to others.) So, anyone wanting to help Concordia people would have to get around the fact that the main beneficiary would be HotChalk."

!

[tuxthepenguin]

Hardin-Simmons Cuts 22 Academic Programs

IHE article

cutting 22 academic programs -- eliminating 17 faculty and 14 staff positions -- building on a previous round of program closures and layoffs

In a previous round of cuts, the university eliminated undergraduate programs in environmental science, geology, medical illustration, philosophy, physics, political science, sociology, Spanish and music in performance, as well as graduate programs in English, history, math and environmental management.

[apl68]

Hardin-Simmons Cuts 22 Academic Programs

IHE article

cutting 22 academic programs -- eliminating 17 faculty and 14 staff positions -- building on a previous round of program closures and layoffs

In a previous round of cuts, the university eliminated undergraduate programs in environmental science, geology, medical illustration, philosophy, physics, political science, sociology, Spanish and music in performance, as well as graduate programs in English, history, math and environmental management.

They're cutting the religious programs that are distinctive to a religiously-affiliated school's mission--but also their business and education offerings.  Wonder what they have left?

[Hibush]

On Concordia from IHE.

Thanks for posting. The article barely mentions HotChalk, but someone in the comments says:

". . . HotChalk has disclosed that it is a main beneficiary of tuition revenue. (It's been trying to sell this model to others.) So, anyone wanting to help Concordia people would have to get around the fact that the main beneficiary would be HotChalk."

!

Instead of the traditional vulture capital/debt model for extracting value from an institution (i.e.monetizing the equity) they used outsourcing to divert the revenue stream. That's an alternative to keep a close eye on.