Colleges in Dire Financial Straits

[ciao_yall]

Sure, but we owe them some honesty about their chances when they're offered admission. If, based on incoming grades, etc. we can predict a given student has a less than 50% chance of completing, they should know that when it's still easy to choose something else where their chance of success would be greater.

Do you work somewhere where you don't tell students that?

Where I work, we do tell them.  Most don't listen.  Then what?

It's worse than that.  We lie to students and tell them they are succeeding when they actually aren't.  A significant fraction of our CS graduates cannot write code on their own.  (They find and copy vaguely relevant code off the Internet and make basically random changes until it passes the tests.)  By the time they get a job and get fired after a few months because they can't do it, we've collected the tuition and (more importantly) counted another successful student in the statistics we report to the public.  Most of the time, the student doesn't even blame us; they blame the employer firing them for having unfair expectations.

But, doesn't your university's CS degree get de-valued in the eyes of the employer, so then that employer avoids hiring your future graduates, which de-values your university's CS degree even further?

There are a few reasons why this isn't a problem:

First - it's not a problem for the students who graduate with a decent GPA.  Employers who care can easily find that number.

Second - the employers who are hiring our graduates with 2.5 GPAs are not big companies with data about how employees with various backgrounds end up performing.  They are smaller outfits desperate to get any warm body who might be able to code.  There are so many of these outfits, and so many universities, that there is not much reputation effects in this marketplace.

Third - many of the folks who graduate with poor grades are capable slackers.  They get in a situation where their performance actually matters and shape up.  So some smaller outfits will have good impressions of our graduates, and anyone looking for a job just needs one.

Many larger companies have their own training program so students can learn how their current systems work and how to manage within them. Students aren't coding from scratch to write the next Google. They are updating processes and features within an existing architecture.

[BadWolf]

Read today that Colgate University served notice to Middle States...not that they are closing but they are opting to switch accreditors. Anyone know more to this story? I don't think it's fiscally motivated, they've always been pretty flush with money.

[Scout]

They're switching to NECHE? Did I read that correctly?

[Ruralguy]

Very not fiscal. they have 1.5 billion in endowment (approx).
Probably the precise opposite: They feel they can dictate the terms, so they are. I don't know why though.

[Hibush]

Alderson Broaddus in West Virginia. An urgent shut down by the end of the year. Their accredditor will only allow them to bring in seniors for the fall semester. The tipoff? "Alderson Broaddus has been asking for donations from alumni to meet payroll, both their last payroll and their next payroll that is due this Friday."

The school has had about 750 students, $37 million in liabilities and an annulal operating deficit of $1 million. The city was about to shut off their utilities because they are about $60k in arrears.

This school was founded as a Baptist college, so it hits the dire-straits trifecta of formerly church-supported, small and rural. Renaming itself a University in 2013 did not help.

Nearby West Virginia Wesleyan College is offering express transfer applications to students who need to find another school by the beginning of this semester.

[Puget]

Alderson Broaddus in West Virginia. An urgent shut down by the end of the year. Their accredditor will only allow them to bring in seniors for the fall semester. The tipoff? "Alderson Broaddus has been asking for donations from alumni to meet payroll, both their last payroll and their next payroll that is due this Friday."

The school has had about 750 students, $37 million in liabilities and an annulal operating deficit of $1 million. The city was about to shut off their utilities because they are about $60k in arrears.

This school was founded as a Baptist college, so it hits the dire-straits trifecta of formerly church-supported, small and rural. Renaming itself a University in 2013 did not help.

Nearby West Virginia Wesleyan College is offering express transfer applications to students who need to find another school by the beginning of this semester.

Honest question-- why do institutions like this try to hold on long past what should be pretty obviously the point of no return? Surely it would have been better for them to make a decision to close long before they couldn't make payroll, establish a teach-out plan, and give students and staff time to deal with the transition. Do they delude themselves into thinking they can turn things around? Or is it just a grift for the admin to keep pulling their salaries until the money is really all gone?

[apl68]

Alderson Broaddus in West Virginia. An urgent shut down by the end of the year. Their accredditor will only allow them to bring in seniors for the fall semester. The tipoff? "Alderson Broaddus has been asking for donations from alumni to meet payroll, both their last payroll and their next payroll that is due this Friday."

The school has had about 750 students, $37 million in liabilities and an annulal operating deficit of $1 million. The city was about to shut off their utilities because they are about $60k in arrears.

This school was founded as a Baptist college, so it hits the dire-straits trifecta of formerly church-supported, small and rural. Renaming itself a University in 2013 did not help.

Nearby West Virginia Wesleyan College is offering express transfer applications to students who need to find another school by the beginning of this semester.

Honest question-- why do institutions like this try to hold on long past what should be pretty obviously the point of no return? Surely it would have been better for them to make a decision to close long before they couldn't make payroll, establish a teach-out plan, and give students and staff time to deal with the transition. Do they delude themselves into thinking they can turn things around? Or is it just a grift for the admin to keep pulling their salaries until the money is really all gone?

As polly said years ago about her Super Dinky College, these schools generally have a long history of operating on very thin margins.  They've usually had more than one close call with closing at some point in their history.  Somehow or other they managed to make it then, so faculty and admins and alumni who really love their school want very badly to believe that they can manage to pull it off again.  And so they become vulnerable to falling down the slippery slope between persisting bravely in the face of trouble and falling into self-delusion regarding their chances.  Or to put it another way, they're just too close to the situation to look at it objectively.

[Wahoo Redux]

Honest question-- why do institutions like this try to hold on long past what should be pretty obviously the point of no return?

Who wants to be the president who let the college sink after hitting the COVID iceberg?  That would be a terrible legacy.

[Puget]

Honest question-- why do institutions like this try to hold on long past what should be pretty obviously the point of no return?

Who wants to be the president who let the college sink after hitting the COVID iceberg?  That would be a terrible legacy.

Sure, but isn't it worse to be the president who couldn't make payroll and had their accreditor pull the plug for them? At least with a planned closure they could say they brought it in for as gentle a landing as they could and helped the students and staff have the best outcome they could. 

[Puget]

As polly said years ago about her Super Dinky College, these schools generally have a long history of operating on very thin margins.  They've usually had more than one close call with closing at some point in their history.  Somehow or other they managed to make it then, so faculty and admins and alumni who really love their school want very badly to believe that they can manage to pull it off again.  And so they become vulnerable to falling down the slippery slope between persisting bravely in the face of trouble and falling into self-delusion regarding their chances.  Or to put it another way, they're just too close to the situation to look at it objectively.

That makes psychological sense, but doesn't paint the competence of the admin and board in a very good light. Anyone in those positions really needs to be able to keep their objectivity, as much as they may wish things were otherwise.

[Stockmann]

As polly said years ago about her Super Dinky College, these schools generally have a long history of operating on very thin margins.  They've usually had more than one close call with closing at some point in their history.  Somehow or other they managed to make it then, so faculty and admins and alumni who really love their school want very badly to believe that they can manage to pull it off again.  And so they become vulnerable to falling down the slippery slope between persisting bravely in the face of trouble and falling into self-delusion regarding their chances.  Or to put it another way, they're just too close to the situation to look at it objectively.

That makes psychological sense, but doesn't paint the competence of the admin and board in a very good light. Anyone in those positions really needs to be able to keep their objectivity, as much as they may wish things were otherwise.

If the board and admin were competent, they probably wouldn't have closed outright in the first place, they would've probably managed to at least merge with or get taken over by another institution. It's not just things like small or rural that are likely to describe institutions that went under - leadership surely matters.

[dismalist]

Alderson Broaddus in West Virginia. An urgent shut down by the end of the year. Their accredditor will only allow them to bring in seniors for the fall semester. The tipoff? "Alderson Broaddus has been asking for donations from alumni to meet payroll, both their last payroll and their next payroll that is due this Friday."

The school has had about 750 students, $37 million in liabilities and an annulal operating deficit of $1 million. The city was about to shut off their utilities because they are about $60k in arrears.

This school was founded as a Baptist college, so it hits the dire-straits trifecta of formerly church-supported, small and rural. Renaming itself a University in 2013 did not help.

Nearby West Virginia Wesleyan College is offering express transfer applications to students who need to find another school by the beginning of this semester.

Honest question-- why do institutions like this try to hold on long past what should be pretty obviously the point of no return? Surely it would have been better for them to make a decision to close long before they couldn't make payroll, establish a teach-out plan, and give students and staff time to deal with the transition. Do they delude themselves into thinking they can turn things around? Or is it just a grift for the admin to keep pulling their salaries until the money is really all gone?

Because they can!

"The university has struggled to pay its bills before. It defaulted on a roughly $36 million bond in 2015, which had been issued to pay for new student housing and an athletic stadium." That's a free gift. Only non-profits can pull off tricks like this and survive in their old form. A for-profit would get taken over by new management and get restructured or be liquidated.

Then, in 2018 the college gets a loan from the US Dept of Agriculture of $27,755,000 through the Community Facilities Direct Loan Program. Why would anybody lend $27.8 million to an entity that had defaulted three years earlier? I don't know that the most misguided hedge fund would do something like that.

So, they been through $54 million of free money and can't pay their utility bills. Now there's no more free money. Shoulda' ended eight years ago at the latest.

[Wahoo Redux]

Honest question-- why do institutions like this try to hold on long past what should be pretty obviously the point of no return?

Who wants to be the president who let the college sink after hitting the COVID iceberg?  That would be a terrible legacy.

Sure, but isn't it worse to be the president who couldn't make payroll and had their accreditor pull the plug for them? At least with a planned closure they could say they brought it in for as gentle a landing as they could and helped the students and staff have the best outcome they could. 

Well, partly I'm talking out my wahoo (who knows why crazy people do crazy things?), but people are not always rational, and there must be intense psychological pressure from the board, alumni, news media, current students, and faculty who, in today's market, may very well be looking at the death of their careers (One faculty at Akron is quoted as saying "I feel like my career has been assassinated").  And who wants to leave a shattered college as one's legacy?  Conversely, who wouldn't want to pilot a college through the socioeconomic shrapnel and be a war hero/heroine?

Our former prez left very abruptly----actually in December, well before the date he suddenly set for himself the preceding August----and we all took that as a bad sign.  Our own hope is that the uni can attract a really dynamic new leader.  The rat who jumped ship clearly saw it sinking and decided he didn't want to be remember as the dude who guided our mediocre R2 to the seafloor. 

[Hibush]

Then, in 2018 the college gets a loan from the US Dept of Agriculture of $27,755,000 through the Community Facilities Direct Loan Program. Why would anybody lend $27.8 million to an entity that had defaulted three years earlier? I don't know that the most misguided hedge fund would do something like that.

That loan stands out as bizzare to me as well. Perhaps the primary goal was to inject $27 million into that part of West Virgnia to keep the local economy afloat. As long as it was paid out to people, and they spent in on other stuff, maybe the real goal was met. I'm speculating--you know whether that makes any economic sense (disregarding the school, it just provided cover for the schem.)

[dismalist]

Then, in 2018 the college gets a loan from the US Dept of Agriculture of $27,755,000 through the Community Facilities Direct Loan Program. Why would anybody lend $27.8 million to an entity that had defaulted three years earlier? I don't know that the most misguided hedge fund would do something like that.

That loan stands out as bizzare to me as well. Perhaps the primary goal was to inject $27 million into that part of West Virgnia to keep the local economy afloat. As long as it was paid out to people, and they spent in on other stuff, maybe the real goal was met. I'm speculating--you know whether that makes any economic sense (disregarding the school, it just provided cover for the scheme.)

I'm sure that the goal was to promote or preserve economic development. Whatever one may think about how to do this, it's surely not a good way to give it to a proven derelict educational institution.

Hell, give the money away directly!