Colleges in Dire Financial Straits

[Ruralguy]

Hibush is right. Its not mystical. If a high enrollment, but tuition driven, school now has much less enrollment, then the income needed to sustain the budget decreases, and probably not just from tuition. I imagine endowment and giving are also down (though that doesn't necessarily have to be the case). The schools that can forge on for decades are the ones with huge endowments and pretty good giving even when enrollments are down. Its unsustainable at some point, and I am sure that can be calculated, but the confounding variables probably make this imprecise.

[selecter]

Its unsustainable at some point, and I am sure that can be calculated, but the confounding variables probably make this imprecise.

Yep. This is what I'm trying to say: a big sack of schools are seriously at risk, and I'm guessing 5% of them are closing in the next five years. But picking out that 5% vs. the rest isn't the piece of cake some are suggesting. Obviously, *anyone* in the sack would be wise to be on the market, but a good chunk of those options are also in the sack.

[Ruralguy]

Yes, but if you are in the sack, but have a high endowment per student ratio and steady giving, you are probably better off than the cross town school that has similar enrollment difficulties, but small endowment and/or troubled giving.

So, I realize it sounds like we are both saying its easy and that its hard to predict, but I guess what we really mean its probably not hard to go from "troubled" to 'highly unlikely to succeed with these numbers for more than a decade." To then go from that to a precise list with rankings is maybe doable, but I think would have some mighty large error bars.

Anyone with decreasing enrollment is probably in trouble. Reductio ad absurdum: You can stay open indefinitely with one student and one professor (and maybe one custodian and one admin) if you have a huge endowment. But it does obviously mean making gigantic cuts and keeping buildings open that probably shouldn't be. On the opposite end, you probably have to close immediately if you have no savings, little collateral, and decreasing enrollments and decreasing reputation.

So, a study would be kind of cool, but looking up a handful of critical numbers that are generally available could tell most of the story if you wanted to know about a particular school.

[apl68]

Unfortunately there have been enough closures in recent years for a researcher to have plenty of cases to study for patterns.

There isn't really a need to do that. The pathology is well known and there are many resources for administrators and trustees to assess their institution. https://cic.edu/insights/benchmarking-services/
https://www.bain.com/insights/financially-resilient-university/

There are many ratings of institutional financial condition, such as https://www.forbes.com/sites/emmawhitford/2023/04/26/forbes-2023-college-financial-grades-the-strongest-and-weakest-colleges/

It is not that difficult to find out if a schools is at risk for oblivion. What is difficult is accepting that it is at risk and acting rationally to that information.

In that case, maybe what's needed is a closer look at schools that have reversed or arrested their slides in time, to see what sorts of strategies really work.  If they're implemented in time.

[Wahoo Redux]

These [Mahnattan college professors] are some pretty accomplished faculty if you read their bios.  In an "ordinary" year they would stand pretty well on the job market, I would think.  I suspect most of them will have to look for non-academic work or retire early now.

Given the number of higher-ed jobs in that city and environs, the faculty should have a better-than-usual chance of finding a faculty position within commuting distance.

The students are in engineering, and in marketing, communication and finance. NYC has a lot of high-paying private-sector jobs in those fields.

The impact on the faculty is likely to be lower than when comparably sized schools close in rural areas.

I sure hope so. 

[Vkw10]

In that case, maybe what's needed is a closer look at schools that have reversed or arrested their slides in time, to see what sorts of strategies really work.  If they're implemented in time.

Just checked out a book: Colleges on the brink: the case for financial exigency by Ambrose and Nietzel, Rodman & Littlefield, 2023. Looks relevant.

[apl68]

In that case, maybe what's needed is a closer look at schools that have reversed or arrested their slides in time, to see what sorts of strategies really work.  If they're implemented in time.

Just checked out a book: Colleges on the brink: the case for financial exigency by Ambrose and Nietzel, Rodman & Littlefield, 2023. Looks relevant.

Now we're talking!  Since I'm no longer in an academic environment, I wouldn't have ready access to something that specialized.  Maybe I could ILL it....

[secundem_artem]

Artem Uni seems to score fairly well. Forbes gives it a B+. 

That said, all the tall foreheads and deep thinkers in the C suite seem to realize that without some serious attention, the future is not bright.  To give them some credit, we are about to go through some serious pain before the situation becomes unsalvageable. 

They could have done this 5 years ago, but at least they are making us face reality before the ship sinks.  We're taking on water, but there is an " all hands to the pumps" program in place.

Here's hoping it works.

[selecter]

The University of Selecter was seemingly on the brink, and *may* be in the middle of a turnaround story, but until enrollment sustainably grows, maybe not. That book sounds quuite relevant, indeed, and I do think turnaround stories could tell us a lot, too. But you don't know if things have turned for about eight to ten years.

[Ruralguy]

Rural College got an A+  !!!

I sorta see why. Though enrollment is down, and is a threat, we had  good giving including some historically large gifts. Though the endowment isn't a record for our size, it is reasonably large.

Probably get almost 10% of budget from giving and similar from endowment. Probably only 1% from grants.
I guess the rest is from tuition and fees.

It seems more B-ish to me, considering the sensitivity to enrollment, which is a bit off from our low, but is not anywhere near the highs.

[Hibush]

New School in NYC is unique, so its situation doesn't have implications for anyone else. It has, by some measures, been in dire financial straits for a century. They are raising money by selling their presidents house, a five-story brownstone in Manhattans' West Village. $20 million seems cheap considering that the neighborhood may be the most expensive in the country. I suppose the money needs to be used to pay off the new $300 million administration building (ok, that is not unique to struggling schools.)

Interesting to note that their president, and current resident of the house, is Donna Shalala, previously president of Hunter, Wisconsin and Miami. Getting someone like her to step in to a difficult role is one of the things that makes New School unique.

[apl68]

The University of Selecter was seemingly on the brink, and *may* be in the middle of a turnaround story, but until enrollment sustainably grows, maybe not. That book sounds quuite relevant, indeed, and I do think turnaround stories could tell us a lot, too. But you don't know if things have turned for about eight to ten years.

What's shocking is those stories about schools that bet everything on some big transformative plan and lost.  Looking at one of spork's links above reminded me of Burlington College's "turnaround president" (Somebody with a known affinity for utopian politics--not mentioning any names) who talked the tiny school into trying to spend $10 million for choice lakefront property on which to build a new campus.  The whole idea being to attract hundreds of new students in a region that already had one of the nation's most egregious surpluses of college capacity.  Not so much a case of turning things around as pointing it straight at a precipice and flooring the gas, Thelma and Louise style.  It's amazing how many struggling colleges' leadership have pulled spectacular cliff dives like this.

[apl68]

Rural College got an A+  !!!

I sorta see why. Though enrollment is down, and is a threat, we had  good giving including some historically large gifts. Though the endowment isn't a record for our size, it is reasonably large.

Probably get almost 10% of budget from giving and similar from endowment. Probably only 1% from grants.
I guess the rest is from tuition and fees.

It seems more B-ish to me, considering the sensitivity to enrollment, which is a bit off from our low, but is not anywhere near the highs.

I was relieved to see that Alma Mater scored a solid B+.  Not bad for a SLAC that's never been rich and is located in a never-rich rural region.  Like most SLACs they spent a lot of money some years back trying to attract more students.  Evidently they didn't get themselves too badly in debt, and they've held onto the same number of students they used to have.

[spork]

St. Augustine's University is no longer making payroll.

The Forbes index is garbage.

[lightning]

St. Augustine's University is no longer making payroll.

The Forbes index is garbage.

Yeah. I looked up College of St. Rose, and their grade is still C-. St. Rose should be earning an F. Grade inflation is rampant and everywhere!!!!