Colleges in Dire Financial Straits

[apl68]

Colleges are now looking for permission to sell off some of the family silver to meet the current emergency:


https://www.chronicle.com/article/In-Dire-Times-Asking-Donors/248996?cid=wcontentlist

[polly_mer]

Colleges are now looking for permission to sell off some of the family silver to meet the current emergency:


https://www.chronicle.com/article/In-Dire-Times-Asking-Donors/248996?cid=wcontentlist

For those playing along at home, if your institution already started selling the silver two years ago, then you had best be on the market yesterday.

[Hibush]

Colleges are now looking for permission to sell off some of the family silver to meet the current emergency:


https://www.chronicle.com/article/In-Dire-Times-Asking-Donors/248996?cid=wcontentlist

Having donors of restricted gifts unrestrict them is a continuous desire of college presidents and VPs for finance. It gives them more power to decide what to spend money on.

Asking donors to unrestrict funds "in times like these" may make sense to the presidents. However, the donors usually restricted the funds so their favored function wouldn't get cut "in times like these." Making that ask can backfire easily.

The alternative is to borrow against the paying power of the endowment. It says something that Princeton, with the highest per-student endowment, has decided to borrow half a billion dollars.

[marshwiggle]

The alternative is to borrow against the paying power of the endowment. It says something that Princeton, with the highest per-student endowment, has decided to borrow half a billion dollars.

This raises a fascinating legal question. I'm guessing, if the institution went bankrupt, the endowment could be used to pay off creditors, and the restrictions would no longer apply. Is that correct?

Also, sometimes companies go bankrupt, and then someone buys the assets (including name and branding) of the company, and creates a "new" company such as "BigCorp 2020" to distinguish it from "BigCorp". I seem to recall sometimes the buyer is a former owner of the original company buying the assets for a song. Could an institution essentially do that? i.e. go bankrupt; use the endowment to pay off creditors, and then create a "new" Uni2.0 having purchased all of the assets cheap?

[Hibush]

The alternative is to borrow against the paying power of the endowment. It says something that Princeton, with the highest per-student endowment, has decided to borrow half a billion dollars.

This raises a fascinating legal question. I'm guessing, if the institution went bankrupt, the endowment could be used to pay off creditors, and the restrictions would no longer apply. Is that correct?

Also, sometimes companies go bankrupt, and then someone buys the assets (including name and branding) of the company, and creates a "new" company such as "BigCorp 2020" to distinguish it from "BigCorp". I seem to recall sometimes the buyer is a former owner of the original company buying the assets for a song. Could an institution essentially do that? i.e. go bankrupt; use the endowment to pay off creditors, and then create a "new" Uni2.0 having purchased all of the assets cheap?

I don't know the details of collateral on these loans. I think the lenders look at the ability to service the loan from endowment income, similar to how people are judged on their employment income. So if Princeton needs $50 million a year to service that loan, they can us the 5% payout from a mere billion dollars of their unrestricted endowment.

Is this a good time to partner with a vulture capitalist to get the brand value of a reputable-but-financially challenged university or college? Why yes! You will need to seed their board of trustees with co-conspirators, but your vulture capitalist partner will be well versed in that manouver. All of the debt--including as much new debt as you can find--tenure obligations,  deadwood faculty and decrepit infrastructure go with CoolCollege; all the endowment, new buildings, younger and adjunct faculty, faithful staff and other valuable assets go with CoolCollege 2020. There might be an victim opportunity  near you now.

If there are not brokers shopping these deals around now, that is another business opportunity where you can make bank on the fees alone, without the ongoing effort to go through the motions of providing education.

[Wahoo Redux]

Restoring Regional Public Universities report.

[mythbuster]

Schools actively looking to fill their seats for Fall 2020. I think this is a list you don't want to be on.

https://www.forbes.com/sites/schifrin/2020/06/15/169-best-colleges-still-searching-for-2020-applicants-and-offering-tuition-discounts/?utm_source=FBPAGE&utm_medium=social&utm_content=3425602489&utm_campaign=sprinklrForbesMainFB#6f92d909236b

[Vkw10]

Schools actively looking to fill their seats for Fall 2020. I think this is a list you don't want to be on.

https://www.forbes.com/sites/schifrin/2020/06/15/169-best-colleges-still-searching-for-2020-applicants-and-offering-tuition-discounts/?utm_source=FBPAGE&utm_medium=social&utm_content=3425602489&utm_campaign=sprinklrForbesMainFB#6f92d909236b

My institution is on the list. Friday report showed that we're about 3% below normal for deposits. I'm at  a public university in a state with biennial budget. Our fall enrollment affects state support for 2021-2023, so we will be accepting students until the first week of classes.

[mamselle]

Sorry to hear that. It must be startling/scary to see a name you recognize, because it's yours.

M.

[polly_mer]

Sorry to hear that. It must be startling/scary to see a name you recognize, because it's yours.

M.

Nah, you get used to it.  Once I found out the list existed, I think whatever institution I was at was on the list every year.

The elite institutions have wait lists; the honest mid-tier institutions claim rolling admissions.  In July, the Super Dinkys start contacting prospective students rejected in March to see if those prospective students would be willing to be coached through writing a letter requesting special review for a nearly guaranteed acceptance for the fall.

[mamselle]

Sorry to hear that. It must be startling/scary to see a name you recognize, because it's yours.

M.

Sorry, I should have included a quote of Vkw's post to clarify, that was directed to them.

M.

[Vkw10]

Sorry to hear that. It must be startling/scary to see a name you recognize, because it's yours.

M.

Sorry, I should have included a quote of Vkw's post to clarify, that was directed to them.

M.

It wasn't particularly scary, because the university president keeps explaining that this fall's enrollment affects our state aid for future years. Lots of updates to various employee groups lately and they all include enrollment spiel. So I was half expecting to see us on the list, because we've been told we'll continue recruiting all summer.

[polly_mer]

Sorry to hear that. It must be startling/scary to see a name you recognize, because it's yours.

M.

Sorry, I should have included a quote of Vkw's post to clarify, that was directed to them.

M.

It wasn't particularly scary, because the university president keeps explaining that this fall's enrollment affects our state aid for future years. Lots of updates to various employee groups lately and they all include enrollment spiel. So I was half expecting to see us on the list, because we've been told we'll continue recruiting all summer.

Most summers many non-elite institutions keep admitting all the way through the end of the fall add period.

This isn't new for those institutions and claiming its unheard of is one of the frustrations in dealing with people who don't actually know how the whole higher ed ecosystems work.

[dr_codex]

Sorry to hear that. It must be startling/scary to see a name you recognize, because it's yours.

M.

Sorry, I should have included a quote of Vkw's post to clarify, that was directed to them.

M.

It wasn't particularly scary, because the university president keeps explaining that this fall's enrollment affects our state aid for future years. Lots of updates to various employee groups lately and they all include enrollment spiel. So I was half expecting to see us on the list, because we've been told we'll continue recruiting all summer.

Most summers many non-elite institutions keep admitting all the way through the end of the fall add period.

This isn't new for those institutions and claiming its unheard of is one of the frustrations in dealing with people who don't actually know how the whole higher ed ecosystems work.

Also, some of this is program-specific.

Some of ours fill up very early, and there's no room for extra bodies. Some never fill, at least as much as we'd like. Our grad programs, for instance (online, so no issues about things like housing or the logistics of moving) will accept until the first day of classes.

[apl68]

In July, the Super Dinkys start contacting prospective students rejected in March to see if those prospective students would be willing to be coached through writing a letter requesting special review for a nearly guaranteed acceptance for the fall.

Having to troll back through the reject bin to scrounge up students would be a humiliating thing to do.  I'd gotten the impression, though, that SD hardly ever rejected anybody in the first place.