Colleges in Dire Financial Straits

[Hibush]

I don't see how 40 faculty can teach 1300 students. Pretty soon, half of that 1300 will realize that too and not return.

The AAUP is trying to make sure prospective students realize that ratio is not realistic.

[spork]

Wittenberg in Ohio is cutting 60% of the faculty for 2025-26. That sounds dire.

Deets:

• 1,288 undergraduate students and 45 graduate students
• 25 intercollegiate athletic teams in NCAA Division III.
• Finished $50 million athletic complex in 2019.
• $17 million operating deficit last year on $96 million budget.
• Only 25% of expenses are salaries
• Big cuts in political science, women's studies and sociology
• Faculty will be reduced from 97 to 40 after the coming academic year.
• Staff will be reduced during the coming year.
• AAUP says it is unethical to admit current matriculating class given the reduced offerings.

I'm going to assume that 97.5 is FTE. Fire 50 tenured faculty and you can hire 250 adjuncts and still save money. Not saying this will actually work, but given that the college blew $50 million on a gymnasium, I bet it's how Wittenberg's administration and board thinks.

[apl68]

I don't see how 40 faculty can teach 1300 students. Pretty soon, half of that 1300 will realize that too and not return.

You think?  Students and parents are paying mortgage-like tuition for the privilege of attending a SLAC with small face-to-face classes, and instead many majors will find themselves mostly taking canned online courses they could have gotten literally anywhere.  It starts sounding like a bait-and-switch on the level of the Fyre Festival.

Looks like awfully poor management to suddenly make cuts this extreme all at once, instead of coming up with a managed-decline plan for any necessary downsizing.

[BadWolf]

Forgot one on my post.

Eckerd (FL) is going through layoffs/reorganization.

[ciao_yall]

Forgot one on my post.

Eckerd (FL) is going through layoffs/reorganization.

My friend's daughter just graduated from there. Went on a sailing scholarship.

That tells you something right there.

[ciao_yall]

Wittenberg in Ohio is cutting 60% of the faculty for 2025-26. That sounds dire.

Deets:

• 1,288 undergraduate students and 45 graduate students
• 25 intercollegiate athletic teams in NCAA Division III.
• Finished $50 million athletic complex in 2019.
• $17 million operating deficit last year on $96 million budget.
• Only 25% of expenses are salaries
• Big cuts in political science, women's studies and sociology
• Faculty will be reduced from 97 to 40 after the coming academic year.
• Staff will be reduced during the coming year.
• AAUP says it is unethical to admit current matriculating class given the reduced offerings.

I'm going to assume that 97.5 is FTE. Fire 50 tenured faculty and you can hire 250 adjuncts and still save money. Not saying this will actually work, but given that the college blew $50 million on a gymnasium, I bet it's how Wittenberg's administration and board thinks.

Assuming you can find that many, particularly in high-demand areas like science and math.

[lightning]

Wittenberg in Ohio is cutting 60% of the faculty for 2025-26. That sounds dire.

Deets:

• 1,288 undergraduate students and 45 graduate students
• 25 intercollegiate athletic teams in NCAA Division III.
• Finished $50 million athletic complex in 2019.
• $17 million operating deficit last year on $96 million budget.
• Only 25% of expenses are salaries
• Big cuts in political science, women's studies and sociology
• Faculty will be reduced from 97 to 40 after the coming academic year.
• Staff will be reduced during the coming year.
• AAUP says it is unethical to admit current matriculating class given the reduced offerings.

I'm going to assume that 97.5 is FTE. Fire 50 tenured faculty and you can hire 250 adjuncts and still save money. Not saying this will actually work, but given that the college blew $50 million on a gymnasium, I bet it's how Wittenberg's administration and board thinks.

Assuming you can find that many, particularly in high-demand areas like science and math.

A sLAC can put the course online & allow adjunct faculty to teach remotely. At that point, they can draw many applicants from many disciplines, from a national pool. Lesley University and Waldorf College are examples of dying sLACs who are doing this. These remote adjunct faculty would rather teach online for an unknown sLAC that sounds reputable on a CV, instead of a big-box behemoth like Purdue Global or UoP, which can draw ire & ridicule if seen on a CV.

[apl68]

A sLAC can put the course online & allow adjunct faculty to teach remotely. At that point, they can draw many applicants from many disciplines, from a national pool. Lesley University and Waldorf College are examples of dying sLACs who are doing this. These remote adjunct faculty would rather teach online for an unknown sLAC that sounds reputable on a CV, instead of a big-box behemoth like Purdue Global or UoP, which can draw ire & ridicule if seen on a CV.

I can see that. 

Maybe in putting classes online these SLAC leaders hope that their name will carry some sort of cachet with potential students that the "big-box" online course mills don't.  I doubt it works in most cases, though.

[Ruralguy]

Our school would collapse if we switched to a significant number of online courses. Our brand is more or less "high touch" (starting to use the term less since some find it kind of creepy). In any case, if students don't get the benefit of in person relatively small classes, then there's no point to our existence.

I assume we aren't unique.

[TreadingLife]

Our school would collapse if we switched to a significant number of online courses. Our brand is more or less "high touch" (starting to use the term less since some find it kind of creepy). In any case, if students don't get the benefit of in person relatively small classes, then there's no point to our existence.

I assume we aren't unique.

Instead of being "high touch", we form deep, personal relationships with our students.  Oops, still creepy. 

While conjecturing which schools will be next to close is fun, I don't see how any SLAC outside of the top 100 makes it. 

Someone up thread mentioned Goucher. Most colleges in the Landmark or Centennial Conference don't have a chance. For the heck of it, I Googled Ursinus College + Endowment and found this gem https://ursinusgrizzly.com/ursinus-endowment-fund-tanks-feds-intervene/

This week, Federal regulators took over Ursinus College's endowment, causing the 171st largest bank failure in American history. Ursinus College's endowment, valued at around $128 million, tanked to a value of about $69 million, losing almost half of its assets in just a 24-hour period. The article is from March 2023

The net tuition revenue for Lycoming College was $6689 in 2021. You read that correctly.
https://www.highereddatastories.com/2024/04/private-college-discount-rates-for.html
They happen to have an endowment that is fairly unrestricted, but still. How are those discount rates sustainable? Especially given their location.

It looks like Juniata is burning through its endowment to cover operating expenses based on a publicly available Baker Tilly report. https://www.juniata.edu/offices/finance-administration/media/Juniata%20College%20AUD%20FS.pdf

Have you heard Allegheny College's new marketing slogan? Allegheny College: Just above Junk

One of the nation's leading credit rating companies downgraded Allegheny College's bond rating last week, but that isn't raising a concern for college officials.

Moody's Investors Service lowered its rating of Allegheny's bonds from Baa2 to Baa3, or just above what is commonly known as non-investment grade or "junk."

In issuing its downgrade, Moody's said "the outlook remains negative" and the move "was largely driven by Moody's expectations of continued weak financial operations as the college grapples with elevated student market challenges. Double-digit operating deficits are likely through fiscal 2024 and potentially beyond, leading to further declines in liquidity and erosion to the financial cushion."

https://www.meadvilletribune.com/news/bond-downgrade-doesnt-faze-allegheny-leadership/article_f5d29f1c-d042-11ee-8d98-0baced52f98b.html

You can't throw a rock in the DELMARVA and not hit a SLAC ranked 75 or below that isn't on a razor thin margin. It is actually shocking that many have made it this far. Hundreds are 2-3 bad years from exhausting any rainy day funds that the might have, and then it is lights out.

But I am sure they are all trying to start masters programs online, attract more transfer students, and are trying to boost their international student population. You know, just like everyone else is.

I can think of at least 5 more schools off the top of my head that I would add to the "death pool" if anyone is taking bets.

It will be interesting to watch this cookie crumble.

[kaysixteen]

Hmmmm... exactly how much oversight does the average state govt (or the federales) place over the financial affairs/ mgmt of chartered private colleges in it?

[Ruralguy]

Some states leave private colleges alone completely.

Others have various health guidelines, which became very important during covid but is usually perfunctory otherwise.

There are probably also some other state laws which all colleges must follow, but for the most part, its light interference, but gets heavier at times, depending on the state.

Similar with federal, though they can be a pain in the butt over grants and such. Also, Title IX is a thing.

However, all must follow the rules of accreditors and auditors (mostly independent organizations, though financial auditors obviously need to abide by state and federal tax law, etc.) .

[BadWolf]

Our school would collapse if we switched to a significant number of online courses. Our brand is more or less "high touch" (starting to use the term less since some find it kind of creepy). In any case, if students don't get the benefit of in person relatively small classes, then there's no point to our existence.

I assume we aren't unique.

Someone up thread mentioned Goucher. Most colleges in the Landmark or Centennial Conference don't have a chance. For the heck of it, I Googled Ursinus College + Endowment and found this gem https://ursinusgrizzly.com/ursinus-endowment-fund-tanks-feds-intervene/

This week, Federal regulators took over Ursinus College's endowment, causing the 171st largest bank failure in American history. Ursinus College's endowment, valued at around $128 million, tanked to a value of about $69 million, losing almost half of its assets in just a 24-hour period. The article is from March 2023

I went to read that link because I hadn't heard anything about problems at Ursinus. (I am well aware of Allegheny's.)

Did you read the article? Did you see the note at the very top that said it was part of their April 1st issue and satirical?

[BadWolf]

Hmmmm... exactly how much oversight does the average state govt (or the federales) place over the financial affairs/ mgmt of chartered private colleges in it?

My state is the only one in the country where the state education department has full control over what a private college can teach. Any time a private school wants to offer a new major, it has to be approved by the state, which includes a 30-day window in which any school, public or private, can object. The major proposal is a 50+ page document which has to go heavily into the financial need for a program, as well as the finances of the institution to support it. It takes anywhere from 4-6 months from submission to final approval.

It's HELL. They have tried to crack down in recent years on schools objecting out of spite, however, which has helped.

For other states, they may not have as heavy a burden but there still is a lot of reporting to state and federal authorities, as well as the annual fiscal audit which every institution must undergo. Make friends with your finance and IR offices if you want to know more about oversight - it's something many faculty don't understand and they love when people actually want to understand rather than just saying "bring in better and richer students".

[apl68]

Instead of being "high touch", we form deep, personal relationships with our students.  Oops, still creepy. 

Only if it comes from a literature prof who's always going on and on about "eros." 



Isn't the Ursinus College article a satirical April Fool's Day article from the campus humor publication?