Colleges in Dire Financial Straits

[polly_mer]

An article which profiles four SLACs: St Johns (MD), Hiram (OH), Hampshire, and Mills College and their strategies to reinvent themselves amid the challenging enrollment and financial pictures affecting many small liberal arts colleges nowadays"

https://www.educationdive.com/news/how-4-small-liberal-arts-colleges-are-changing-with-the-times/566424

Three of these things belong together
Three of these things are kinda the same
But one of these things is not like the other
Now it's time to play our game

St. Johns has a good shot at succeeding.  St. Johns has a steady enrollment and was not heavily reliant on tuition (only 31% and that's going down).  They have had a clearly defined, unique enough mission and a solid body of alumni/friends/well wishers that St. Johns likely can raise the money to offset tuition increases.  St. Johns was in a not-good financial situation, but the linked article and what I know as a regular reader of Inside Higher Ed, Chronicle of Higher Education, and relevant regional newspapers support the idea that St. Johns made purposeful long-term changes to protect their mission instead of a series of annual trade-offs that each individually made sense to weather one year, but collectively add up to a decade or more of neglect, disinvestment, and undermining the mission.

In contrast, while Hampshire has a unique mission, it's not clear that enough people (students, alumni, friends, well wishers) want that mission at either the high cost or the high price.  https://www.hampshire.edu/sites/default/files/businessoffice/HampshireFiscalReality1.31.2019updated.pdf pages 31 and 32 indicate projected $48M in operating budget for projected 1100 students ($44k/student for those following along with the elite/superelite discussion).  Hampshire's current enrollment is 750 students, which is about half of what it had just 10 years ago.  Also alarming is Hampshire only has a $52M endowment that is 97% restricted. For comparison, Grinnell has a billion dollar endowment that is mostly unrestricted and they are discussing current challenges in the changing landscape.


One very hard part of fundraising for small schools is a lack of an alumni army and Hampshire has that problem as well with a mere 14k alumni since 1970.  For perspective, Grinnell College in FY18 raised $17M ($26M total philanthropic commitments) from 10k individuals.

108 full-time faculty for a student body under 750 screams "expensive and way, way overfacultied".  For perspective, Super Dinky had about 30 full-time faculty, about 10 professional fellows, and about 5 adjuncts every term for 600 students.  Since I've been comparing to Grinnell, I'll mention that Grinnell has 200 full-time faculty and 30 part-time faculty for 1800 students.

Even with all those faculty members at Hampshire, the student outcomes aren't all that good.  The 67% six-year graduation rate is about national average (i.e., not good for an expensive private school) and 80% first-to-second year retention rate when nearly everyone starts as a first-year student.  The inputs are harder to judge because this is a specialty college, but a greater than 60% acceptance rate seems really high.  For perspective, Grinnell has an 87% graduation rate with a 95% first-to-second year retention rate and a 30% acceptance rate.

Personal income isn't everything, and yet Hampshire's average of $35k 10 years after graduation makes me wonder how many people make a purposeful trade-off for creativity/satisfaction/flexibility and how many of the 60% of people with an average of $25k in student loans would make the same choice a second time.  Again, for perspective, Grinnell graduates have an average salary of $49k for the 40% of people who took out an average of $16k in loans.

Hampshire's curriculum plan to have year-long projects/discussions is interesting, but it's not clear to me that Hampshire, despite having many faculty for a small school, has a critical mass of faculty with the appropriate expertise to jump right on the current buzzwords along with the facilities to do the kind of project-based learning or undergraduate research that appeals to people wanting the buzzwords. 

Were I advising someone who is really interested in, say, artificial intelligence, I can think of several dozen institutions that have well-established programs for the same out-of-pocket cost or less.  On Hampshire's website, I see a couple computer science faculty listed in the category of cognitive science including one VAP in games.  Programs in AI, natural language processing, or game design along with a commitment to project-based learning from day one of freshman year are not rare any more.  This very much looks like coming very late to the bus that already left.

I've never even heard of Hiram, which is a bad sign if they are attempting to appeal to a national audience or even just the Midwest audience.  One thing that stands out to me in their article is having a $30M budget for 1200 students when Super Dinky had $12M for 600 students.  A second thing that jumps out is starting a new computer science program when so many good ones already exist and faculty are hard to come by on the national scene. After much poking around on the website, I found two faculty members listed as being in computer science along with one emerita, while chemistry has 7 entries that look like faculty (at least at emeritus level).  Potentially a whopping 3 people for two programs (traditional CS and applied CS) that will have trouble getting adjuncts seems very much like wishing instead of planning. 

Visiting Hiram's website makes me roll my eyes; claiming one is different while using the same words and appeal as dozens of others making the same claim is not convincing.  The user experience is also not great since I had to work pretty hard to find a faculty list or any other information.  That screams to me "underresourced and hoping for the best".  As part of my travels through the website, I learned Hiram has a 3+2 engineering program.  Again, I have to wonder why someone who does a little research on the options in the world would do that in today's environment.  People who really want to be engineers should go straight to Case Western Reserve/Wash U (or comparable school) instead of starting at the resource-strapped place and then extending the time to degree.  People who are place-bound may wish to carefully consider how having an engineering degree will work if they cannot move.  If people just want that small school experience, then go to an engineering school with the small classes and the resources.


I've reviewed Mills College at length in the recent past so I'm going to do something else with my next hour instead of rehashing the details of a women's-only college in a huge metropolitan area with many excellent education opportunities for a variety of price ranges, many of which are very welcoming to the social justice mission.

[onthefringe]

polly makes some interesting points, but I think it's kind of disingenuous to use Grinnell for "perspective " considering they are easily the best funded liberal arts college in the Midwest, and usually in the top 10 or so in the nation (depending in your definition of liberal arts college).

You could make all the same points using a more modestly funded Midwest school for perspective, and I would argue that the perspective woukd be more relevant.

For example, Kenyon, Macalaster, Denison are all kind of bog-standard SLACs, with no clear mission the separates them from other SLACs. Each of them has their own financial concerns (ie, Kenyon's endowment is notoriously low in relation to comparable schools), but none of them are in any danger of closing any time soon, and all would provide a better set of numbers to provide perspective for a small college that may need to continue to pay attention in order to stay relevant, but doesn't have wolves at the door right this instant.

[hazelshade]

polly makes some interesting points, but I think it's kind of disingenuous to use Grinnell for "perspective " considering they are easily the best funded liberal arts college in the Midwest, and usually in the top 10 or so in the nation (depending in your definition of liberal arts college).

You could make all the same points using a more modestly funded Midwest school for perspective, and I would argue that the perspective woukd be more relevant.

For example, Kenyon, Macalaster, Denison are all kind of bog-standard SLACs, with no clear mission the separates them from other SLACs. Each of them has their own financial concerns (ie, Kenyon's endowment is notoriously low in relation to comparable schools), but none of them are in any danger of closing any time soon, and all would provide a better set of numbers to provide perspective for a small college that may need to continue to pay attention in order to stay relevant, but doesn't have wolves at the door right this instant.

Agreed--Grinnell is an outlier for a number of reasons (higher endowment--Polly actually understated by about half, I believe--unusually unrestricted endowment, lower net student revenue, fewer full-pay students, more modest philanthropic support) compared to the schools onthefringe mentions, which are more representative of other stable Midwestern LACs. Some of those outlier factors probably balance each other out, though.

One caveat is that I don't know if Kenyon is quite a "bog-standard LAC"--it graduates remarkably high numbers of students in humanistic fields, and its humanities enrollments have remained remarkably stable over the past 10 years (in sharp contrast to national trends and other LACs). I assume the Kenyon Review is a factor there, but I'm curious about how this is working (and whether it means they have a unique identity that students are responding to).

[onthefringe]

One caveat is that I don't know if Kenyon is quite a "bog-standard LAC"--it graduates remarkably high numbers of students in humanistic fields, and its humanities enrollments have remained remarkably stable over the past 10 years (in sharp contrast to national trends and other LACs). I assume the Kenyon Review is a factor there, but I'm curious about how this is working (and whether it means they have a unique identity that students are responding to).

I have no idea how entrenched that identity is. I will say that the fringelet has been to information sessions and tours at Kenyon, and they did not overemphasize a focus in the humanities (in contrast to Reed which is, admittedly, and outlier LAC in a variety of ways).

[hazelshade]

One caveat is that I don't know if Kenyon is quite a "bog-standard LAC"--it graduates remarkably high numbers of students in humanistic fields, and its humanities enrollments have remained remarkably stable over the past 10 years (in sharp contrast to national trends and other LACs). I assume the Kenyon Review is a factor there, but I'm curious about how this is working (and whether it means they have a unique identity that students are responding to).

Whoops, I meant its percentage of humanities grads has remained stable--I don't have direct info about enrollments, and the relationship between enrollments and majors can be surprisingly complex.

[spork]

[. . . ]

Are you suggesting that Cal would buy the campus

[. . . ]

I bet there are many potential buyers of the property.

If the property is to continue as some kind of facility for legitimate post-secondary education, then Cal is the obvious and probably only potential buyer. Why would any other non-profit college or university want to purchase it at market price? And I doubt whatever company that owns Patten University has the money or interest in getting the real estate.

Of course a condo developer could always make an attractive offer.

[polly_mer]

The point of comparing with Grinnell is to really emphasize how far from elite Hampshire College is, despite needing elite-aspiring students to make a go of their unique mission.

[Hibush]

[. . . ]

Are you suggesting that Cal would buy the campus

[. . . ]

I bet there are many potential buyers of the property.

If the property is to continue as some kind of facility for legitimate post-secondary education, then Cal is the obvious and probably only potential buyer. Why would any other non-profit college or university want to purchase it at market price? And I doubt whatever company that owns Patten University has the money or interest in getting the real estate.

Of course a condo developer could always make an attractive offer.

With the housing demand in the immediate area, condo developer may be the highest bidder.

But Stanford just had their expansion permit denied so they are looking for somewhere to put their new enterprises (2 million square feet of academic space, >3000 housing units.) The Mills campus is 135 ac and already has some housing and academic space.

Despite being the area's largest landowner, the university has show a willingness to have non-contiguous centers. They just developed a 35-acre satellite campus in Redwood City. (Thirty five acres on the Peninsula is quite a bit. A <1/6 acre lot with a tear-down house is over $1 million.)  Who knows?

[spork]

I think Mills will cease to exist in any event. For a Stanford or Berkeley, there is no sound reason to continue to operate it as a stand-alone entity (e.g., "Mills School of Urban Education") and Mills employees will lose their jobs.

[picard]

The sudden enrollment decline at Beloit College and how it impacted the Wisconsin-based SLAC is the subject of this Chronicle of Higher Ed article (ungated from this Twitter link for now):

https://www.chronicle.com/article/Then-Enrollment-Fell-Off-a/247556?key=j_DIeWIUtJsVs9ToXQRavkodE0DZGgTXPyVR6NTBdS26okvuD0TOSeilYzaLfamNTnA4cVBCVDZ0akJqUmtSelV6dGYwR1YyUndQQlRHYkpuWmZ6cVk2eVFKTQ

But when the numbers fell into the 200s, the college also saw "a significant decline in net tuition revenue per student, so we got a double whammy."

"We were floored by this, as you might imagine," he says. Obviously, there would have to be budget cuts to match the decline in revenue: Some faculty and staff positions were cut, and salaries were reduced in a manner that protected anyone making less than $45,000 a year, with the biggest cuts assigned to those making the most. Bierman [the college's president] hopes that the reductions were all but undetectable to students, although Moody's Investors Service noticed and downgraded the college's debt, saying that "Beloit's student market remains highly pressured."

Bierman says the college now has a budget model "that allows us to be healthy — not quite as healthy as you might want to be, but healthy — at 310 students per year." And Beloit has used endowment money to pay off some of its loans, he says, because he doesn't want "a bank dictating to me what programs to cut."

How will it attract 310-student classes? Bierman says that Beloit, like many other liberal-arts colleges, has failed at describing what it does — to its own students and faculty members, as well as to off-campus audiences. "We have not done a sufficient job of explaining our value proposition. It's as simple as that," he says. Now the college needs to double down on demonstrating "the humanity of Beloit College" to prospective students.

The president and others at Beloit know, of course, what's been happening at other colleges in the Midwest. In fact, Bierman is a good friend and former Carleton College colleague of Nathan D. Grawe, a Carleton economics professor who is the author of Demographics and the Demand for Higher Education. "We have been well in tune with a sophisticated view of the demographics," says Bierman, "way beyond, What's the aggregate number of high-school graduates?"

In his book, Grawe says there is a distinction between small liberal-arts colleges in the top 50 and the rest of the liberal-arts pack. "Within the Midwest, the experience at Carleton and Colorado College is not what the rest of us are experiencing," says Bierman. "Virtually everybody outside of maybe those two would say it's increasingly difficult to get a class that is close to or hits the goals that you've set."

[Hibush]

The sudden enrollment decline at Beloit College and how it impacted the Wisconsin-based SLAC is the subject of this Chronicle of Higher Ed article (ungated from this Twitter link for now):

https://www.chronicle.com/article/Then-Enrollment-Fell-Off-a/247556?key=j_DIeWIUtJsVs9ToXQRavkodE0DZGgTXPyVR6NTBdS26okvuD0TOSeilYzaLfamNTnA4cVBCVDZ0akJqUmtSelV6dGYwR1YyUndQQlRHYkpuWmZ6cVk2eVFKTQ

The president and others at Beloit know, of course, what's been happening at other colleges in the Midwest. In fact, Bierman is a good friend and former Carleton College colleague of Nathan D. Grawe, a Carleton economics professor who is the author of Demographics and the Demand for Higher Education. "We have been well in tune with a sophisticated view of the demographics," says Bierman, "way beyond, What's the aggregate number of high-school graduates?"

A bit later in the article, Bierman says "3 percent of college students ever seriously consider a liberal-arts college. "Just imagine: What do the economics of the sector look like at 4 percent? We would have more than undone any of the demographic changes that are coming down the road."  He is noting that they are losing prospects to the regional U of Wisconsin campuses, which are bigger and cheaper.

The loud message here is that the crisis for private small LACs is not a crisis for higher education at large. The crisis is in a little sliver of higher education.

Bierman's main effort strikes me as reasonable: state the value proposition of LACs repeatedly to faculty, students, policy makers and prospects. That gets everyone on message, aligns expectations and lets those who find value in LACs find that value.

That same concept applies to the even tinier sliver if higher ed(<10 LACs) that is places designed for the brilliant misfit (Hampshire, St Johns...). They enroll so few students that demographics don't matter much; finding the prospects and delivering for them. Polly described earlier how St Johns is succeeding and Hampshire did not. Beloit's new VP for enrollment spent 20 years at one such place (Bard at Simon's Rock), so we'll see what she comes up with to deliver on the president's initiative.

[picard]

The sudden enrollment decline at Beloit College and how it impacted the Wisconsin-based SLAC is the subject of this Chronicle of Higher Ed article (ungated from this Twitter link for now):

https://www.chronicle.com/article/Then-Enrollment-Fell-Off-a/247556?key=j_DIeWIUtJsVs9ToXQRavkodE0DZGgTXPyVR6NTBdS26okvuD0TOSeilYzaLfamNTnA4cVBCVDZ0akJqUmtSelV6dGYwR1YyUndQQlRHYkpuWmZ6cVk2eVFKTQ

The president and others at Beloit know, of course, what's been happening at other colleges in the Midwest. In fact, Bierman is a good friend and former Carleton College colleague of Nathan D. Grawe, a Carleton economics professor who is the author of Demographics and the Demand for Higher Education. "We have been well in tune with a sophisticated view of the demographics," says Bierman, "way beyond, What's the aggregate number of high-school graduates?"

Bierman's main effort strikes me as reasonable: state the value proposition of LACs repeatedly to faculty, students, policy makers and prospects. That gets everyone on message, aligns expectations and lets those who find value in LACs find that value.

That same concept applies to the even tinier sliver if higher ed(<10 LACs) that is places designed for the brilliant misfit (Hampshire, St Johns...). They enroll so few students that demographics don't matter much; finding the prospects and delivering for them. Polly described earlier how St Johns is succeeding and Hampshire did not. Beloit's new VP for enrollment spent 20 years at one such place (Bard at Simon's Rock), so we'll see what she comes up with to deliver on the president's initiative.

Fully agreed w/you Hibush. Unlike some other college admins who'd rather bury their heads in the sands when confronted with a similar problem, Beloit president seems to know the problem his institution is facing, realizes the need to engage with his constituencies and stakeholders on the values of liberal arts education, and is now hiring senior executives with experience on how to market his SLAC under a much more challenging market environment these days. I wish him and Beloit College well.

[polly_mer]

I, too, wish Beloit College well, but I don't see them making it unless several of their similar competitors go out of business first and Beloit snaps up the students before the cheaper publics do.

College Score Card lets me compare Beloit to UW-Platteville.  When I was making the choice way back when the math came out a little differently, but Platteville is a pretty good choice for a regionally constrained student.  The two are similar on costs on most measures, while Beloit has a slightly higher average debt on slightly lower average earnings.  Platteville has a much wider array of majors and more activities (associated with many more students), which can be appealing for those who are in favor of college as an intellectual place, but don't know exactly what the specifics mean.

When I was a kid, I spent a lot of time on the UW-Platteville campus.  It was not at all overwhelming for small town me, unlike UW-Madison or University of Chicago.

Thus, although it is clear to me why someone might want a (Small and Selective Enough)LAC, it's not clear to me why anyone would choose Beloit over any of the very good similarly-priced-after-discounts-are-applied choices in the region.  It's also not clear why someone who is looking for a good college education in the same region, but not totally in love with the SLAC version would choose Beloit over Platteville.

[Hibush]

  It's also not clear why someone who is looking for a good college education in the same region, but not totally in love with the SLAC version would choose Beloit over Platteville.

The plan seems to be that the student or parent will have heard Beloit's story a lot more than Platteville's, even if the student would be happy at either.

[polly_mer]

  It's also not clear why someone who is looking for a good college education in the same region, but not totally in love with the SLAC version would choose Beloit over Platteville.

The plan seems to be that the student or parent will have heard Beloit's story a lot more than Platteville's, even if the student would be happy at either.

So the story is supposed to win over data?  Interesting for a place selling critical thinking.