Colleges in Dire Financial Straits

[polly_mer]

I have some math from Super Dinky that directly answers Lightning's question.  I don't know about Baker or the lacrosse team. 

I do know that Super Dinky could have survived for many more years if they had gone all in on beefing up their successful athletics programs instead of being half-assed about that effort, half-assed about reviving a liberal arts program, and half-assed about moving into new majors that would draw students.

Super Dinky had a pretty good niche market in people who just wanted to play sports and would play sports every season.  These students were not picking college based on major.  Indeed, most of these students probably shouldn't have been in college anywhere because they were not about learning.  Interestingly, the coaches were about preparing for life after college and therefore students were steered towards majors with which they could get jobs after they return to their small towns (basic business that claimed to be sport management, psychology that focused on social work and the court system, criminal justice, and a coaching minor).

SD had a total annual budget between $10M and $15M every year.  The endowment is about the same size, so the main sources of funding were tuition, fees, room and board, rental facilities, and state grants for capital projects.

The head football coach made $35k + benefits.  His assistant coaches made $5k + room and board valued at $10k.  Students were mostly required to live on campus unless they were still living with family.  Thus, each full-pay student was $20k tuition/fees + $10k room and board.

The football team then is:
$70k head coach
$150k 10 assistant coaches

total salary cost: $220k

$4.5 M in player income if all 150 players are full pay and living on campus.

Because of the costs with football, three-sport thing, and a few people being good enough students they received merit scholarships, the take for football alone is more like $2M.  However, $2M on a $15M budget means we all love the football coach and his assistants who recruit from all over the country, not just the 2h drive radius.  This particular coach was also an incredible mentor to his guys and we were incredibly lucky to have him.

Men's basketball is similarly:

$70k (total) for the head coach
$45k for the assistant coaches

total: $115k in salary expenses

$1.5M for 50 players that is more like $750k after expenses and reallocation.  Again, the coaching team recruits from all over the country, not just the local region.

All told with 70% of the students being athletes and the coaches recruiting nationally instead of just within the two hour drive in a dying region,

600 students * 0.7 athlete/student * ($20k tuition and fees + $10k room and board) = $12.6M

Even with a discount rate of 40% on tuition, the fact that some of the student athletes were from the region, and expenses in running the programs, SD was much better off by having athletics than not.  The alumni donated to athletics at high rates, much higher than any other identifiable program and with far fewer restrictions on what athletics could do with the donations.

With pretty good athletic facilities for the region, we made a lot of money renting the facilities for K-12 tournaments, summer camps, and similar endeavors.  A good million dollars a year came from renting the facilities and then doing concessions during rentals.

For perspective on salaries in other parts of the institution, the admissions counselors earned $25k + benefits (about $50k total per individual).  Having the assistant coaches recruiting like crazy on only $15k outlay and doing so much more successfully meant we at the administrative level often discussed whether we should just cut the admissions counselors and pay the assistant coaches a little bit more. 

We also often had assistant coaches making extra money through adjuncting and tutoring center activities.  The student retention rates went up substantially when the students saw the coaches engaged in the formal education side.  All the head coaches taught credit-bearing classes as adjuncts.  Unlike the stories from the DI schools about athletes getting special treatment to be let out of academic endeavors, one contact with a head coach about a student falling behind and that student was in my office asking to help make a plan to do better.

Thus, starting a football team from scratch is probably a terrible idea to save the tiny school.  However, adding a few more teams that need minimal equipment in sports where the national demand exists and isn't being met (e.g., women's wrestling, lacrosse) may be a good investment for $70k for the coach, $1m in equipment that is mostly paid through fundraising, and a new set of students at $30k each.

[apl68]

Super Dinky had a pretty good niche market in people who just wanted to play sports and would play sports every season.  These students were not picking college based on major.  Indeed, most of these students probably shouldn't have been in college anywhere because they were not about learning.  Interestingly, the coaches were about preparing for life after college and therefore students were steered towards majors with which they could get jobs after they return to their small towns (basic business that claimed to be sport management, psychology that focused on social work and the court system, criminal justice, and a coaching minor).

We also often had assistant coaches making extra money through adjuncting and tutoring center activities.  The student retention rates went up substantially when the students saw the coaches engaged in the formal education side.  All the head coaches taught credit-bearing classes as adjuncts.  Unlike the stories from the DI schools about athletes getting special treatment to be let out of academic endeavors, one contact with a head coach about a student falling behind and that student was in my office asking to help make a plan to do better.

Sounds like maybe SD's coaches were managing to get some student athletes whose main goal was to prolong their adolescence for a few more years to learn something in spite of themselves.  If you've got the right staff, a college like that might be filling a worthwhile niche after all. 

[Ruralguy]

Many colleges are doing this. Mine is, and we're bigger than Polly's Super Dinky. Also, people take their intramurals pretty seriously too!

Some of our best students in sciences are very good players of various sports who are extremely dedicated to practice, studying, etc.  Its not all just lunkheads who don't care.

Anyway, its a big part of our model, but is has its limits because you can only put so many people on the team, even if they are second string, and if you fill all the teams up with freshfolks in one year, you may have zero open spots the next year.

In other words, I guess there's no cure-all for not getting enough students who want to come there to learn and are willing to pay for it. Schools like that are always pedaling uphill.

[TreadingLife]

Many colleges are doing this. Mine is, and we're bigger than Polly's Super Dinky. Also, people take their intramurals pretty seriously too!

Some of our best students in sciences are very good players of various sports who are extremely dedicated to practice, studying, etc.  Its not all just lunkheads who don't care.

Anyway, its a big part of our model, but is has its limits because you can only put so many people on the team, even if they are second string, and if you fill all the teams up with freshfolks in one year, you may have zero open spots the next year.

In other words, I guess there's no cure-all for not getting enough students who want to come there to learn and are willing to pay for it. Schools like that are always pedaling uphill.

I work at a place very similar to Ruralguy and our yield, retention, and graduation rates for our DIV III athletes are higher than the general student population, so it literally pays to recruit these students. Also, we have some "rich kid" sports (golf, equestrian) which tend to attract students from a higher socioeconomic status. This is not always true of course, but there is a clear correlation between our full pay students and certain sports on campus.

And then you have the college students who might not be college students otherwise, who can be essentially bribed to go to college to play a sport they love and don't want to give up. So parents get what they want, students get what they want, and we get a boost to net tuition revenue.

[Hibush]

Over at CHE (remember them?) there is a wrapup of predictions of institutional mortality versus the current status. The conclusion is that colleges are changing, not closing, and only those in the Direst Financial Straits are closing. But the year is young.

• Zemsky told The Wall Street Journal in April that the toll could be as high as 200 closures in a year.
• 
  In Forbes, Richard Vedder wrote that more colleges were vulnerable to closure now "than at any other time in American history" in an article headlined "Why The Coronavirus Will Kill 500-1,000 Colleges."
• 
  Last January, John Kroger, a former president of Reed College, predicted 100 small-college closures over the course of a decade. By May, he had revised that estimate upward: "More than 750 to 1,000" such schools would now "go under."

How many colleges have shuttered?

Ten — at least that's the number of permanent closures or consolidations between the beginning of March 2020 and the end of January 2021 according to Higher Ed Dive. These 10 have been small, private institutions, and were often in deep financial trouble before the pandemic.

The academy is becoming a more frugal employer, a more virtual entity, and less of a home to the traditional liberal arts — again, extending trends that were already present before the arrival of Covid.

This, it seems, is change enough for now. If history is a guide, the vast majority of colleges will survive the current crisis, as they have survived many other difficult periods in the past. It will be up to us to ensure that higher-education institutions — in their post-pandemic, altered forms — remain true to the important missions of centering student learning, producing valuable research, and adeptly serving their communities.

[apl68]

Over at CHE (remember them?) there is a wrapup of predictions of institutional mortality versus the current status. The conclusion is that colleges are changing, not closing, and only those in the Direst Financial Straits are closing. But the year is young.

• Zemsky told The Wall Street Journal in April that the toll could be as high as 200 closures in a year.
• 
  In Forbes, Richard Vedder wrote that more colleges were vulnerable to closure now "than at any other time in American history" in an article headlined "Why The Coronavirus Will Kill 500-1,000 Colleges."
• 
  Last January, John Kroger, a former president of Reed College, predicted 100 small-college closures over the course of a decade. By May, he had revised that estimate upward: "More than 750 to 1,000" such schools would now "go under."

How many colleges have shuttered?

Ten — at least that's the number of permanent closures or consolidations between the beginning of March 2020 and the end of January 2021 according to Higher Ed Dive. These 10 have been small, private institutions, and were often in deep financial trouble before the pandemic.

The academy is becoming a more frugal employer, a more virtual entity, and less of a home to the traditional liberal arts — again, extending trends that were already present before the arrival of Covid.

This, it seems, is change enough for now. If history is a guide, the vast majority of colleges will survive the current crisis, as they have survived many other difficult periods in the past. It will be up to us to ensure that higher-education institutions — in their post-pandemic, altered forms — remain true to the important missions of centering student learning, producing valuable research, and adeptly serving their communities.

Wonder how Zemsky, Vedder, and Kroger made their estimates?  Were they just making up numbers off the top of their heads, or was there at least a vague methodology involved?

[TreadingLife]

Wonder how Zemsky, Vedder, and Kroger made their estimates?  Were they just making up numbers off the top of their heads, or was there at least a vague methodology involved?

To be fair, many schools, even good ones like Duke, have frozen TIAA CREF contributions and have frozen salary increases for the year. Any model starts with assumptions and I would venture that Zemsky, Vedder, and Kroger assumed some degree of "business as usual" instead of the substantial shift to right-sizing/prioritizing of programs seen at many institutions. "Untouchable" majors like math, philosophy, music, etc, have been cut at a number of schools. Schools are now running leaner with cuts to adjuncts, programs, and benefits, all of which have been made easier to implement under the banner of COVID-related reasons for sharp financial changes.  Were it not for COVID, would we see as many schools implement or accelerate changes to their bottom lines? I doubt it. COVID gave schools the reason/excuse/courage to make the cuts they probably needed to make all along.

[FishProf]

Becker College - Worcester MA

[polly_mer]

When I was doing institutional research for Super Dinky, there were about a thousand undergrad-only institutions with enrollment of under 1000 students.  Some of those places have a unique mission and significant resources that mean they are not dependent on current enrollment and won't be chasing any warm body to pay this week's bills.

The wave of closures isn't this year because one can often fundraise and borrow for a while to avoid closure today.  The looming problems involve demographic changes that aren't yet at the cliff stage.  The pandemic makes money tight but the case for fundraising is very good.  Thus, the ten closures this year are the same ten who were already going to close.

The pandemic may move up the closures that were going to happen after 2025, but the big wave of closures wasn't going to happen this year. 

From 2018, https://econofact.org/demographic-changes-pose-challenges-for-higher-education

WICHE released an updated report in Dec2020: https://knocking.wiche.edu/executive-summary

The big open questions are rates of going to college and how much people are willing to pay for non-elite colleges for majors that don't directly connect to jobs.  The elite institutions will just reach deeper into qualified pools.  The desirable majors at less prestigious institutions will remain desirable with modernizing adjustments, but the big change of integrating coops and internships has already happened.

The big winner in terms of changing to meet different student demand might be certificate programs at CC as part of stackable credentials.  Recent discussions:

https://www.insidehighered.com/blogs/confessions-community-college-dean/modular-degrees

https://www.insidehighered.com/blogs/confessions-community-college-dean/job-focused-or-cheaper

https://www.insidehighered.com/blogs/confessions-community-college-dean/jobs-and-jobs

[marshwiggle]

The big winner in terms of changing to meet different student demand might be certificate programs at CC as part of stackable credentials.  Recent discussions:

https://www.insidehighered.com/blogs/confessions-community-college-dean/modular-degrees

Interesting comment from the article:

For the associate to stand on its own, rather than simply amount to a consolation prize, it needed to have enough technical content in its field to be employable. That meant frontloading the technical classes in the program, and backloading the gen eds. A student who stuck around for the bachelor's took more gen eds in the second half than in the first. The unintended side effect was that some of the technical content atrophied a bit while the student tried to complete a degree. When I got the telecom or CIS students in late-sequence electives in political science, I thought of it as a version of a finishing school.

That's the reverse of the usual relationship between gen eds and major courses. Typically, the gen eds are frontloaded, during which time students are supposed to explore. Then, when they commit to a major, they're supposed to jump in with both feet.

The key in any stack of credentials is that each credential has to be able to stand on its own. In this case, that may require the bachelor's to rejigger its own sequence. That's not necessarily a bad thing; I've long suspected that one reason DeVry had better associate degree completion rates than most community colleges was that it frontloaded the courses the students saw as the reason they were there. Once they got over the resistance to being "in school," the gen eds went down more easily.

Since the whole "gen-ed" thing is literally foreign to me, I'm curious. If one of the main reasons for gen-eds was to allow students to explore before they choose a major, what is the justification for having them at the end, i.e. after students have chosen and essentially completed a major?
 

[apl68]

Becker College - Worcester MA

Looks like they have an interesting history.  Two tiny schools--one with a very old pedigree--merged in the 1970s. 

They are supposed to have one of the best game design schools in the country.  That's not good news for colleges looking to e-sports for their survival.

That article has a link to an article about a New York University marketing professor named Scott Galloway who predicts that six Massachusetts institutions--Clark, Mount Holyoke, Simmons, Brandeis, UMass Boston, and UMass Dartmouth--are "likely to perish."  I had the impression that Brandeis was supposed to be one of those elite schools that would be around as long as there were still universities.

[apl68]

When I was doing institutional research for Super Dinky, there were about a thousand undergrad-only institutions with enrollment of under 1000 students.  Some of those places have a unique mission and significant resources that mean they are not dependent on current enrollment and won't be chasing any warm body to pay this week's bills.

The wave of closures isn't this year because one can often fundraise and borrow for a while to avoid closure today.  The looming problems involve demographic changes that aren't yet at the cliff stage.  The pandemic makes money tight but the case for fundraising is very good.  Thus, the ten closures this year are the same ten who were already going to close.

Fair point.  There will undoubtedly be schools fatally damaged by the pandemic that manage to stave off closing for another year or three.  A bit like the die-offs of trees that occur after the drought is technically over.

[Ruralguy]

For people who believe in such things, a core or a simple distribution requirement usually have two or three primary purposes:

1. Building an essential skill base (frosh comp is best example, though obviously some majors need various math).

2. Exposure to some topic or mode of thinking that "someone" thinks is essential to being a -take your pick-  person in society, human on Earth, American, Christian, Westerner.  Examples of this are Western Civ type courses or Great Books courses. Mostly these ideas are rooted in cores that formed in early 20th century, but some have evolved with time to be more broad.

3. Sampling across curriculum to help someone decide on what they might wish to major in, etc.


Obviously "1" should happen fairly early. Its best if 3 happens before end of sophomore year, but some can happen later if you already decided on major anyway.  I think "2" can more or less happen at any time unless its supposed to be some sort of common frosh or soph "experience."

[apl68]

The big winner in terms of changing to meet different student demand might be certificate programs at CC as part of stackable credentials.  Recent discussions:

https://www.insidehighered.com/blogs/confessions-community-college-dean/modular-degrees

Interesting comment from the article:

For the associate to stand on its own, rather than simply amount to a consolation prize, it needed to have enough technical content in its field to be employable. That meant frontloading the technical classes in the program, and backloading the gen eds. A student who stuck around for the bachelor's took more gen eds in the second half than in the first. The unintended side effect was that some of the technical content atrophied a bit while the student tried to complete a degree. When I got the telecom or CIS students in late-sequence electives in political science, I thought of it as a version of a finishing school.

That's the reverse of the usual relationship between gen eds and major courses. Typically, the gen eds are frontloaded, during which time students are supposed to explore. Then, when they commit to a major, they're supposed to jump in with both feet.

The key in any stack of credentials is that each credential has to be able to stand on its own. In this case, that may require the bachelor's to rejigger its own sequence. That's not necessarily a bad thing; I've long suspected that one reason DeVry had better associate degree completion rates than most community colleges was that it frontloaded the courses the students saw as the reason they were there. Once they got over the resistance to being "in school," the gen eds went down more easily.

Since the whole "gen-ed" thing is literally foreign to me, I'm curious. If one of the main reasons for gen-eds was to allow students to explore before they choose a major, what is the justification for having them at the end, i.e. after students have chosen and essentially completed a major?

A big part of gen-ed requirements in the U.S. is an effort to get students to learn things that a couple of generations ago would have been considered part of a normal high school education.  It really is hard to exaggerate how very little large numbers of American students learn in their K-12 education.  That's why you see references to "K-16," with college serving as grades 13-16.  It's reached the point where a high school that graduates a solid majority of students with functional literacy, and a substantial minority with functional numeracy, is considered something of a success.  Jobs that require more than the most basic levels of literacy and numeracy increasingly require college degrees because it takes four years of college, in addition to K-12, to have much assurance of having these qualifications.

[mythbuster]

     Ugh! For science majors, the phenomenon of entirely frontloading Gen Eds into the first 2 years is horrible for students. For science majors, it's best to scatter them throughout the entire college experience to allow for more balance in the per semester workload.
    We see the effect of this push to "complete the AA" at our institution. Junior Bio majors with a schedule of Physics 2, Biochemistry, Genetics, AND Physiology all in one semester.  Or even worse, an entering 1st year with a schedule of Chem 1, Bio 1, Physics 1 and Calculus because they have dual credit that covers all their humanities electives, so they have no other options of what to take. It's a literal recipe for student failure as they are in all weed-out classes at the same time

In terms of the purpose of Gen Eds, in addition to what Rural Guy said, it's about being a "well rounded" individual. This is an idea that was at it's height in popularity in the late 1980s, and now is anathema in these days of college as job training centers.
   I loved many of my Gen Ed courses, as they let me engage a different part of my brain than my science courses. But only those students who enjoy school as a whole will see it that way.