Colleges in Dire Financial Straits

[SLAC_Prof]

^{Linfield College's main campus undergraduate FTE enrollment fell from 1800 in 2006-07 to 1660 in 2016-17.}

Note that more recent reports (2019) suggest enrollments have fallen further, to around 1,250. That's a 25% drop in just two years.

I wonder how/if their major distribution changed though. Even in the 1980s Linfield was perceived as a business/nursing/pre-law sort of school, not really a liberal arts focus like some of the other Oregon privates. If enrollments shifted even more toward those (and other) pre-professional majors, that could have resulted in a reclassification by Carnegie and a change in perception within the market. The hints from the AAUP article on the cuts suggest they are aiming at languages, journalism, and humanities faculty rather than business. If Linfield followed the general trend after 2009 in terms of declining majors in those areas, that could be the path they are now on.

The closing dorms are another issue. Losing residents is a major blow to the bottom line, as revenue from auxiliary operations (room and board esp) would either be going to debt service (if the buildings were bonded) or into general operating funds. If they are closing that many dorms it sounds like their residence life program is in trouble, which would not only impact revenues but would hurt recruiting among the types of students you'd want at a "residential" liberal arts college.

[polly_mer]

Anyone else see the Inside Higher Ed article on early warning signs of financial trouble and almost hurt themselves nodding along?

https://www.insidehighered.com/views/2019/05/23/early-warning-signs-financial-trouble-institutions-often-miss-opinion

[mamselle]

Very insightful.

Thanks for flagging it.

M.

[spork]

In my last comment about Linfield College, I wasn't entirely clear. Assuming Linfield's survival strategy rests on eliminating liberal arts offerings, preserving its nursing program in Portland (where enrollment has been flat), and building up its on-campus and online business programs (where, given IPEDS data, enrollment has probably declined), it's not going to work.

Why enroll in a business studies major at a small, struggling, largely-unknown college when one can get the same degree online from a better-known university for less money? These small institutions can't rely on MBA programs as cash cows anymore, because the big schools with national reputations are moving them online. For example, U of Illinois: https://www.insidehighered.com/quicktakes/2019/05/25/illinois-will-end-residential-mba-favor-online-program. And it seems like the whole idea of the two-year post-bac MBA is in decline. In a similar vein, look how Iowa Wesleyan (previously discussed on this thread) is trying to survive -- three years at a local community college with one year of online courses for a bachelor's in business studies: https://rochellenews-leader.com/article/3-1-articulation-announced-between-kishwaukee-college-and-iowa-wesleyan-university. The chances of this kind of articulation agreement pulling a place like Iowa Wesleyan back from the brink are slim to none.

[Tenured_Feminist]

They've been hanging on in part by having some very strong D3 sports programs, but you can't populate an entire college with D3 athletes who are willing to pay full freight.

[Hibush]

They've been hanging on in part by having some very strong D3 sports programs, but you can't populate an entire college with D3 athletes who are willing to pay full freight.

How big is that market? There must be enough to have it be 10% of the class at nearly a league's worth of D3 colleges. Or would it be one college per league, á la St. Thomas?

[polly_mer]

They've been hanging on in part by having some very strong D3 sports programs, but you can't populate an entire college with D3 athletes who are willing to pay full freight.

How big is that market? There must be enough to have it be 10% of the class at nearly a league's worth of D3 colleges. Or would it be one college per league, á la St. Thomas?

My last institution had about 70% of the student body as D3 athletes at some point during the students' time at the college.  More of them than I expected were paying full freight, but it still wasn't anything like a quarter of the student body paying full freight.

[dr_codex]

They've been hanging on in part by having some very strong D3 sports programs, but you can't populate an entire college with D3 athletes who are willing to pay full freight.

How big is that market? There must be enough to have it be 10% of the class at nearly a league's worth of D3 colleges. Or would it be one college per league, á la St. Thomas?

My last institution had about 70% of the student body as D3 athletes at some point during the students' time at the college.  More of them than I expected were paying full freight, but it still wasn't anything like a quarter of the student body paying full freight.

My current (D3) place has about 60% per year; so, maybe 80% at some point over 4 years. Almost nobody is paying full freight, but that's because summer scholarships are routine, and most of the students are required to do summer courses. Maybe 10% of the freshman class would not come if there were no sports.

[Hibush]

They've been hanging on in part by having some very strong D3 sports programs, but you can't populate an entire college with D3 athletes who are willing to pay full freight.

How big is that market? There must be enough to have it be 10% of the class at nearly a league's worth of D3 colleges. Or would it be one college per league, á la St. Thomas?

My last institution had about 70% of the student body as D3 athletes at some point during the students' time at the college.  More of them than I expected were paying full freight, but it still wasn't anything like a quarter of the student body paying full freight.

My current (D3) place has about 60% per year; so, maybe 80% at some point over 4 years. Almost nobody is paying full freight, but that's because summer scholarships are routine, and most of the students are required to do summer courses. Maybe 10% of the freshman class would not come if there were no sports.

If those 10% are there for the sports and paying full tuition, that's a good deal for the college. If they weren't there, they would be replaced by students at the maximum discount, or minimum academics.

[Hibush]

There is a CHE article (and elsewhere too) about a rural school in Virginia that is not in dire enrollment straits. That would be Virginia Tech. They ended up with 1000 more students accepting admission than they have space. This school is clearly an example of what works, despite having many of the characteristics that are predictors of dire financial straits.

One amazing claim is that students were drawn by the prospect of a computer-science based satellite campus in Alexandria, near Amazon HQ2. While that opportunity sounds good, these students will be long graduated before that campus opens.  Computer science is of course the juggernaut at many schools. "Blacksburg will make 100 to 120 new computer-science faculty hires in the next five years and expand by 2,000 students in that discipline over the next eight years."

That is a lot of hiring! Consider that there are 40 or 50 other universities that are as good as or better than Tech in CS, things must be looking good for new PhDs who have that thousands of faculty openings as well as competing industry offers.

Most struggling schools don't have a vibrant computer-science major as an alternative. What else is Tech doing that is brining in so many applicants, and getting a superior yield? They are still far from the big city, still dependent on an unpredictable legislature, and in a region with lots of competition.

[polly_mer]

Hibush, what predictors of dire financial straits do you think Virginia Tech has?

1) Virginia Tech is rural, but not tiny, with a planned incoming class of 7000 and a total enrollment of more than 25k.  The predictor I associate with dire financial straits is having an enrollment of less than 2000.

2) Virginia Tech has a billion dollars in their endowment.  The predictor I associate with dire financial straits is having an endowment of a few million.  It's true, though, that a billion dollars is less than VT's annual budget of $1.6 billion, so that is a concern, but the $34k endowment value/student that exceeds the annual tuition per student is less concerning. (https://vt.edu/about/facts-about-virginia-tech.html)

3) Virginia Tech may have many institutions within a two-hour drive, but Virginia Tech is known for being an excellent engineering school that does high level research.  The predictor I associate with dire financial straits is having the same mission as nearly all the other institutions in the region and thus having nothing that stands out.

3a) Virginia Tech is ranked by US News and World Report as a National University (i.e., pulls from more than just locally) with similar entries on the list being Florida State University, Fordham University, Stevens Institution of Technology, University of California--Santa Cruz, University of Massachusetts-Amherst, University of Pittsburgh, University of Minnesota--Twin Cities, American University, Baylor University, Binghampton University SUNY, Colorado School of Mines and North Carolina State University-Raleigh. 

University of Virginia does rank much higher in that same category, but is smaller, slightly more expensive, and bills itself as fostering an undergrad life more like a S(mall) LAC.

3b) Virginia Tech has a Carnegie classification of Doctoral University with high graduate coexistence.  Similar institutions include Clemson, Georgia Tech, LSU, New Jersey Institute of Technology, Ohio State, Rensselaer, and Texas Tech.

For comparison, I worry about institutions like Quincy University.

From College Scorecard

Category	VT	Quincy University
Average Annual Cost	$20k	$17k
Graduation Rate	84%	48%
10-year median salary	$63k	$40k
Undergrad enrollment	27k	900
Pell	16%	32%
ACT	25-30	19-24
SAT reading	590-670	410-610
SAT math	590-690	460-540

What is Virginia Tech doing that is working?  They admit highly prepared students who are engaged with their education where faculty do world-class research alongside their large undergrad offerings in some of the most popular subjects for bachelor's degrees in an appealing geographic location that is non-urban, but isn't blink-and-you'll-miss-it-tiny.

Why are so many other rural colleges struggling?  Because they are tiny, serve only the local region that is declining in overall population and college age, have an ever-growing academically underprepared population who struggle financially, and are generally indistinguishable in major offerings from other institutions and usually without the investment in engineering and business degrees that are nationally the most popular entering majors.

[Hibush]

Thanks for laying out the contrast so clearly. I see schools like Tech and, especially, other big land grants getting a huge number of the students that the struggling schools are missing. By the numbers, Tech could swallow Quincy whole with nary a burp. (The students would probably struggle, but that's a different story.)

We hear about the crisis of schools with tiny numbers getting even tinier numbers of students, and the opposite crisis of students unable to get in to the few fancy places that have tiny admissions percentages. The vast middle is getting enrollment growth.

[picard]

I don't think this news about enrollment problems and planned academic restructuring at Millsaps College has been posted yet:

https://www.clarionledger.com/story/news/politics/2019/05/22/millsaps-college-jackson-mississippi-cuts-majors-programs/3692545002/

Millsaps is one of the finest SLAC in the South and was featured in outlets such as "Colleges That Change Lives" as late as early 2010s (haven't checked it recently). Very sorry to hear that it is also facing financial troubles, but it is certainly not unique as many SLACs located in small-town/rural setting are experiencing this problem nationwide.

[rth253]

What do you all think of Vermont's strategy to combine Johnson State College (enrollment=~1400) with Lyndon State College (enrollment=~1100) into Northern Vermont University while maintaining the two separate campuses?

[mamselle]

At first (when referred to on this thread's ancestral predecessor) I thought it was a joke about 1960s-70s political figures.

If they merged with Brattleboro, they could all keep their names and go by the moniker "LBJ"....

M.