Colleges in Dire Financial Straits

[Wahoo Redux]

I've often wondered about the economic impact of a school closing.  Even in a fairly robust area a college closing will not only put a lot of people out of work, but vendors, landlords, and local small business owners would be hit.

Both where we taught in Smallville at Toxic U and where we teach now in the middle of SubUrbanGhettoville would be devastated if their schools closed.

Does anyone know if someone's done a study on this?

What happens to the abandoned campuses?  I know of one in my home state which is simply a home for the raccoons now. 

[ciao_yall]

I've often wondered about the economic impact of a school closing.  Even in a fairly robust area a college closing will not only put a lot of people out of work, but vendors, landlords, and local small business owners would be hit.

Both where we taught in Smallville at Toxic U and where we teach now in the middle of SubUrbanGhettoville would be devastated if their schools closed.

Does anyone know if someone's done a study on this?

What happens to the abandoned campuses?  I know of one in my home state which is simply a home for the raccoons now.

Our local public community college brings in ~ $200 million per year in State funding. It is paid mostly in salaries and benefits to faculty and staff.

Then there is the multiplier effect of all those people paying mortgages/rent, buying groceries and clothing, going to restaurants, that sort of thing. All the cafes around the college are packed in the morning, and the lunch spots are busy as well. There are a few bars that are frequented by both employees and students. Those employees turn around and spend their wages on rent, groceries, whatever.

There is value in having a college in town. Many of our nurses and health workers in our world-class health system trained at our college, and people come from around the state and country to be treated here. We are a tourist town, and many restaurant and other hospitality workers were trained in our culinary department. Tourists and locals shop in our boutiques started by graduates of our fashion program, or stores staffed by the same graduates. Our galleries are filled with art created by our students, nightclubs enjoy performances by our music students.

Neighbors meet one another by taking a class in a language or philosophy or political science. Employees get promotion opportunities by taking a class in computer science or business. Entrepreneurs take small business classes to write their plans.

So if the college closed, I suppose all those faculty and staff would be unemployed, and the cluster of businesses supported by the college would close. Not sure where the hospitals and hotels would get their employees, or whether tourists would come visit empty galleries and eat chain food.

Where would ambitious employees build their skills if they weren't seeing opportunities at their jobs? How would bright people who enjoy learning get together?

[spork]

Check out the situation in Pennsylvania. This is an analysis of the Public system, not private schools. Sobering graphs.

https://www.inquirer.com/business/student-debt-pennsylvania-colleges-penn-state-20191127.html

The article makes no mention of the fact that the tuition at PASSHE campuses is so high because these universities need to pay off debt from a really stupid borrowing spree a few years ago:

https://ragingchickenpress.org/2013/10/21/wall-street-on-the-susquehanna-passhe-bond-scheme-bleeds-education-budget-for-beautiful-buildings/ .

[apl68]

If Henderson State University, discussed some above, were to close, it would be a heavy blow to the economy of the town of Arkadelphia.  It's not the ONLY thing they have there, but it's a big chunk.  There's also a similarly-sized religiously-affiliated private college across the street from it that would be a great loss were it to close.  The two schools have several thousand students between them in a town of not quite eleven thousand. 

That's a big part of why I don't expect Henderson to be closed, despite its recent distress.  It's a regional economic driver, it's the only public school in reasonable commuting distance, and, as Tux notes, it supplies teachers and such for the region.

[Wahoo Redux]

What Colleges Do For Local Economies

2015

[Wahoo Redux]

Profile of 340 lost colleges

[Hibush]

Check out the situation in Pennsylvania. This is an analysis of the Public system, not private schools. Sobering graphs.

https://www.inquirer.com/business/student-debt-pennsylvania-colleges-penn-state-20191127.html

The article makes no mention of the fact that the tuition at PASSHE campuses is so high because these universities need to pay off debt from a really stupid borrowing spree a few years ago:

https://ragingchickenpress.org/2013/10/21/wall-street-on-the-susquehanna-passhe-bond-scheme-bleeds-education-budget-for-beautiful-buildings/ .

And if they close one campus, the other campuses take on both the debt and the maintenance cost of the empty physical plant. That's quite a poison pill.
Somebody should do the game theory modeling of PASSHE chancellors' motivations .

[picard]

How many colleges does that make so far that have thrown in the towel since the pandemic started?

To my knowledge, Urbana Univ was the second SLAC which closed down after the pandemic started.

MacMurray College in IL was the first. It was covered in this thread awhile back:
https://www.sj-r.com/news/20200327/macmurray-college-to-close-after-174-years

Of course, these colleges financial troubles originated long before the pandemic. And sadly there are more SLAC fitting their profile (i.e., low enrollment & endowment, located in rural states where HS population is falling, etc.) who would follow suit.

[marshwiggle]

Of course, these colleges financial troubles originated long before the pandemic. And sadly there are more SLAC fitting their profile (i.e., low enrollment & endowment, located in rural states where HS population is falling, etc.) who would follow suit.

A new equilibrium will be achieved as some of these close and the students and resources are redistributed among the stronger ones that remain, which will then be even healthier.

[nonntt]

We will soon be hearing about dire financial straits at public universities in states with formerly significant oil revenues. My department just lost one long-established major along with a TT faculty member, a part-timer doing 30% of the teacher in another major, and an innovative new program that was popular with students. I assume every department will be facing something similar.

[Hibush]

We will soon be hearing about dire financial straits at public universities in states with formerly significant oil revenues. My department just lost one long-established major along with a TT faculty member, a part-timer doing 30% of the teacher in another major, and an innovative new program that was popular with students. I assume every department will be facing something similar.

Alaska, North Dakota and Pennsylvania got the bad news already. Pennsylvania was already not providing much money. At the other extreme, Wyoming will be interesting to watch since energy mining is big, as is state support for the university.

[risenanew]

What I find so fascinating about the LostColleges.com list is that none of the college listed (so far as I could tell, anyway) are community colleges. Why are community colleges less likely to close compared to four-year (and other senior) institutions?

I imagine community colleges may be more likely to survive because community colleges are probably less common in higher education, may serve a broader population of students beyond traditional-age youth, and are usually public institutions supported (to some paltry extent, anyway) by public funds. Is there anything else I'm missing?

[AmLitHist]

What I find so fascinating about the LostColleges.com list is that none of the college listed (so far as I could tell, anyway) are community colleges. Why are community colleges less likely to close compared to four-year (and other senior) institutions?

I imagine community colleges may be more likely to survive because community colleges are probably less common in higher education, may serve a broader population of students beyond traditional-age youth, and are usually public institutions supported (to some paltry extent, anyway) by public funds. Is there anything else I'm missing?

Speaking just from my own CC experience, we're the place people send their kids when they can't afford the Real School, when their kids wash out of the Real School, and (hopefully in the current situation) when it's perceived to be unsafe to send their kids back to the Real School.  (That's not meant as a disparaging term--it's just our local shorthand to differentiate between our CC and several others locally, vs. the state Uni's several locations and other out-of-state 4-year schools.)

So:
--We're cheaper
--Going to the local CC means the kids live at home and the parents (theoretically) have more oversight and control of whatever distracted the kids and led to them washing out (and, as I've heard from many students over the years, they want to redeem themselves in their parents' eyes by doing well at CC so they can get the heck back out of Mom and Dad's house and back to the freedom of their Real School).
--If it might or might not be safe to go back to Real School this fall, the kids will be at home in a presumably more controlled environment, and/or it alleviates the potential of having to pack up, move to campus in August, and then have all the hassle of dragging everything back home if the virus comes back and things shut down again later in the fall.

The other thing CCs traditionally have going for us is that a lousy economy means boom times for us*:  if people are out of work and/or have seen their jobs/careers/fields go away, they need to retrain for new jobs/careers/fields. And if they expect to be out of work for awhile, with cheap tuition (ours is about $110/credit hour) and pretty available Pell, other grants, and financial aid money, many older unemployed people (i.e., 30s on up) figure they might as well be doing something with that time off and have something to show for it, even if just a quick stackable credential or two to take back into the job market.

At least, that's how it used to be. I have no idea what this round of economic downturn will bring:  so far I have only 5 students registered in my summer sessions, and the same number across my mostly-online fall classes.  We'll see if the boom(let) materializes.  But a lot of colleagues and I, still in the shadow of a massive RIF a couple of years back, are nervous, to put it mildly.

-----
*In 2009-11, my own department on my campus had 17 FT and nearly 40 adjunct faculty every semester, with over half of the FT people teaching full OL (so, 8 sections/person/semester) and 2/3 of the adjuncts teaching 3 or 4 sections (this was as the more stringent limits for qualifying for benefits, thus limited adjuncts to no more than 3 sections max, were being phased in).  Today we have 6 FT faculty, with only two of us teaching 1-2 OL sections, and fewer than 10 adjuncts, most each doing only a section or two.

[risenanew]

What I find so fascinating about the LostColleges.com list is that none of the college listed (so far as I could tell, anyway) are community colleges. Why are community colleges less likely to close compared to four-year (and other senior) institutions?

I imagine community colleges may be more likely to survive because community colleges are probably less common in higher education, may serve a broader population of students beyond traditional-age youth, and are usually public institutions supported (to some paltry extent, anyway) by public funds. Is there anything else I'm missing?

Speaking just from my own CC experience, we're the place people send their kids when they can't afford the Real School, when their kids wash out of the Real School, and (hopefully in the current situation) when it's perceived to be unsafe to send their kids back to the Real School.  (That's not meant as a disparaging term--it's just our local shorthand to differentiate between our CC and several others locally, vs. the state Uni's several locations and other out-of-state 4-year schools.)

So:
--We're cheaper
--Going to the local CC means the kids live at home and the parents (theoretically) have more oversight and control of whatever distracted the kids and led to them washing out (and, as I've heard from many students over the years, they want to redeem themselves in their parents' eyes by doing well at CC so they can get the heck back out of Mom and Dad's house and back to the freedom of their Real School).
--If it might or might not be safe to go back to Real School this fall, the kids will be at home in a presumably more controlled environment, and/or it alleviates the potential of having to pack up, move to campus in August, and then have all the hassle of dragging everything back home if the virus comes back and things shut down again later in the fall.

The other thing CCs traditionally have going for us is that a lousy economy means boom times for us*:  if people are out of work and/or have seen their jobs/careers/fields go away, they need to retrain for new jobs/careers/fields. And if they expect to be out of work for awhile, with cheap tuition (ours is about $110/credit hour) and pretty available Pell, other grants, and financial aid money, many older unemployed people (i.e., 30s on up) figure they might as well be doing something with that time off and have something to show for it, even if just a quick stackable credential or two to take back into the job market.

At least, that's how it used to be. I have no idea what this round of economic downturn will bring:  so far I have only 5 students registered in my summer sessions, and the same number across my mostly-online fall classes.  We'll see if the boom(let) materializes.  But a lot of colleagues and I, still in the shadow of a massive RIF a couple of years back, are nervous, to put it mildly.

-----
*In 2009-11, my own department on my campus had 17 FT and nearly 40 adjunct faculty every semester, with over half of the FT people teaching full OL (so, 8 sections/person/semester) and 2/3 of the adjuncts teaching 3 or 4 sections (this was as the more stringent limits for qualifying for benefits, thus limited adjuncts to no more than 3 sections max, were being phased in).  Today we have 6 FT faculty, with only two of us teaching 1-2 OL sections, and fewer than 10 adjuncts, most each doing only a section or two.

That's a great explanation for the varied reasons for why community colleges might survive a down-turn... sometimes, being the "last refuge" for students who have no other entry-point into higher education can be a damned good thing!

And yes, I'm very nervous about how the COVID-19 pandemic will affect community colleges also. I am literally living in the hot-zone of the pandemic while employed at a fairly large (student population = roughly 11,000) community college that has had a declining student population for several years. (We were at around 16,000 students at our peak a few years back!)

This public community college (and every other public educational institution in our area) will be hammered with budget cuts soon... but if we're very lucky, we might be able to make up for some of those cuts with a surge (or at least steady) enrollment. That's probably the boat that many other community colleges are in around the country, whether or not they're in an area with as much COVID-19 activity as my college is.

Ultimately though, if we look at what institutions might be most vulnerable to the pandemic, it's probably institutions that can't rely on public funding, are not very well known to the public (aka little-to-no reputation to bank on), are relatively expensive for students, and are located outside of major metro areas. Do y'all think that speculation is correct or that I'm leaving something out?

[mahagonny]

I've often wondered about the economic impact of a school closing.  Even in a fairly robust area a college closing will not only put a lot of people out of work, but vendors, landlords, and local small business owners would be hit.

Rents will decrease so that it will be easier for remaining students to afford going to college at the one not too far away that didn't close. Hopefully colleges won't see that as an excuse to raise tuition and fees. Not saying a college closing is something we want, but 'it's an ill wind that blows no good.'