Colleges in Dire Financial Straits

[apl68]

Not directed at you -- I wish people, especially an institution's own faculty and administrators, would stop using this terminology because it isn't supported by evidence.

FWIW, I agree: an institution's branding should reflect its reality or its aspirations.

I don't think numbers of majors is necessarily a good metric (but, hey, you need something), especially when we're comparing applied subjects with clearly-defined career paths to discovery majors. So, I'd be perfectly fine with an instition calling itself a LAC but haviing few majors in the liberal arts, so long as a significant chunk of the students there actually obtain a liberal arts education (through distribution requirements, minors, etc.). But to do that you have to buy into your own branding and invest in developing the liberal arts.

That seems fair to me as well.  Saying that an institution is a fake LAC because most of its majors are lowly education and business and nursing majors seems dismissive, and kind of elitist.  I get that a lot of SLACs are now in the process of losing any right to be considered an LAC, but that doesn't mean that all of them never were in the first place. 

Looking at IPEDS, I see that in the neighborhood of a third of majors at my alma mater--one of those small religiously-affiliated schools that polly and spork seem to hold in such contempt--are still in one or another field of the humanities.  Does that mean it's not a real LAC?

If I'm reading this correctly, you've misunderstood me. Adrian College's IPEDS data and tax filings indicate that 1) the overwhelming majority of students major in occupational training programs, 2) the liberal arts portions of the curriculum are probably almost entirely composed of a limited menu of courses that fulfill gen ed options (there does appear to be some type of arts program that has a healthy number of majors).

Of the places where I have been a full-time professor:

• church-affiliated high school that eventually became a church-affiliated university with 3,000 students; a few of its liberal arts programs are ok but none are great.
• church-affiliated college that is now a non-denominational university with 5,000 students; a few ok liberal arts programs.
• church-affiliated university with 2,000 students that originally only admitted women to train them for the service occupations open to them at the time (teacher, nurse); liberal arts programs range from mediocre to "you're really wasting a lot of money."
• non-denominational normal school that became a regional state university with 15,000 students, which means enough scale to offer some reasonably high-quality liberal arts programs.

For all of the above, most of the students who major in liberal arts fields (broadly defined) do so because they think it is the path toward graduate study necessary to obtain professional licensure, e.g., JD, MD, master's in therapy/counseling. And at all of these places, the only exposure to liberal arts that most students get comes from a hodgepodge of one-off gen ed requirements that students regard as meaningless.

None of the above institutions are the equivalent of a Wellesley, Bryn Mawr, Williams, or Bates, places with students who are likely to do well post-college regardless of their choice of major.

When enrollment at a tuition-dependent institution declines to a certain level, it becomes even less viable to try to be all things to all people. The "liberal arts college" hype isn't in the financial interest of the college or of the students who attend.

I guess I didn't explain myself well enough.  I don't disagree with any of the above.  But there's a huge spectrum between the handful of elite LACs like Wellesley, and the threadbare Super Dinky colleges that claim to have liberal arts long after they've lost them.  Where along that spectrum does a college cease to be entitled to be called an LAC?  Does the term apply only to that handful of elite schools, or does a school where a large minority of students still major in the liberal arts, and still some well-regarded programs (And has a history of being at least moderately selective, although I don't know that they can afford that now) also qualify?

[Hibush]

But there's a huge spectrum between the handful of elite LACs like Wellesley, and the threadbare Super Dinky colleges that claim to have liberal arts long after they've lost them.  Where along that spectrum does a college cease to be entitled to be called an LAC?  Does the term apply only to that handful of elite schools, or does a school where a large minority of students still major in the liberal arts, and still some well-regarded programs (And has a history of being at least moderately selective, although I don't know that they can afford that now) also qualify?

US News lists 223 LACs. Does that seem  like the right ballpark?

Somewhere in that list would be the cutoff for what is considered a Selective LAC. How far down that list do they appear to be selective with a core Liberal Arts curriculum?

[Wahoo Redux]

Don't mean to derail, but I have a new question.

Why should the lack of housing, food, and processing fees damage an institution's overall finances that much?  I keep hearing about millions of dollars in refunds and lost fees, particularly since dormitories are unoccupied.

If the dorms, cafeterias, gyms, student unions, etc. are not in use, aren't they just unoccupied buildings?  Some small upkeep and security costs, certainly.  But shouldn't the other functions of the university still be viable if students are paying tuition?

Or do universities use these "fees" to generate additional income for the general fund?

[spork]

Net revenue where I work depends on dorm and meal plan fees. It's a stupid business model.

It's called "auxiliary revenue" in the budget but there's nothing auxiliary about it.

[TreadingLife]

We rent out space on our campus (auditoriums and other venue-type spaces) to area schools for shows and performances put on by a third party. We also host events like graduations for fire departments and police departments. So our facilities get a lot of use even when we are on campus during the academic year. During the summer, we host many camps and other training/graduation/performance events. We have lost all of that auxiliary revenue going back to March and still counting. We rely on that non-student auxiliary income to support the operation of the college. Tuition isn't enough because we discount it deeply.

[ciao_yall]

Don't mean to derail, but I have a new question.

Why should the lack of housing, food, and processing fees damage an institution's overall finances that much?  I keep hearing about millions of dollars in refunds and lost fees, particularly since dormitories are unoccupied.

If the dorms, cafeterias, gyms, student unions, etc. are not in use, aren't they just unoccupied buildings?  Some small upkeep and security costs, certainly.  But shouldn't the other functions of the university still be viable if students are paying tuition?

Or do universities use these "fees" to generate additional income for the general fund?

I'm sure there is a markup that is dropped to the bottom line. So a meal plan that is priced at $5,000 probably costs $4,000 to deliver. Even though the college (theoretically) doesn't have to pay the $4,000 in food, labor, utilities, etc, the college still loses $1,000.

[pgher]

Debt service on the cost of construction. Contracted services.

[Vkw10]

Don't mean to derail, but I have a new question.

Why should the lack of housing, food, and processing fees damage an institution's overall finances that much?  I keep hearing about millions of dollars in refunds and lost fees, particularly since dormitories are unoccupied.

Debt service, as pgher said. Universities use bonds to build and renovate dorms, just as individuals use mortgages and HELOCs.

Contracted services, also mentioned by pgher. Universities often contract with utilities, maintenance companies, shuttle services, and other third party contractors. The dorm residents would have used, and paid for, part of those services. Contracts typically have minimum dollar amounts and early cancellation penalties.

Salaries and benefits. The university employs residence life staff, cleaners, grounds crew, bookkeepers, etc., to support dorm operations. Some can and will be laid off immediately, with benefits ending at end of month. Others are needed even if dorms are empty.

Costs associated with laying people off. The unemployment insurance assessment increases for an employer with many claims. Some places offer severance or job placement assistance, which may be required by law or union contract. Some places have to pay out accumulated leave.

Other overhead. The dean of students, campus security lighting, the leased copier in the student union, the accounting staff who spend part of their time on dorm-related expenses, are probably all partially paid from dorm revenues under the heading of overhead expenses.

[pgher]

Don't mean to derail, but I have a new question.

Why should the lack of housing, food, and processing fees damage an institution's overall finances that much?  I keep hearing about millions of dollars in refunds and lost fees, particularly since dormitories are unoccupied.

Debt service, as pgher said. Universities use bonds to build and renovate dorms, just as individuals use mortgages and HELOCs.

Contracted services, also mentioned by pgher. Universities often contract with utilities, maintenance companies, shuttle services, and other third party contractors. The dorm residents would have used, and paid for, part of those services. Contracts typically have minimum dollar amounts and early cancellation penalties.

Salaries and benefits. The university employs residence life staff, cleaners, grounds crew, bookkeepers, etc., to support dorm operations. Some can and will be laid off immediately, with benefits ending at end of month. Others are needed even if dorms are empty.

Costs associated with laying people off. The unemployment insurance assessment increases for an employer with many claims. Some places offer severance or job placement assistance, which may be required by law or union contract. Some places have to pay out accumulated leave.

Other overhead. The dean of students, campus security lighting, the leased copier in the student union, the accounting staff who spend part of their time on dorm-related expenses, are probably all partially paid from dorm revenues under the heading of overhead expenses.

Thanks, vkw10, for expanding on what I wrote from my phone. Now that I'm on my computer....

I'm involved with a conference held every year in March. We had to cancel this year's event, and are looking seriously at what we can do for next year. It is a big enough conference that we currently have contracts for conferences as far out as 2025. We plan as if each succeeding year looks like the preceding year, with a bit of growth. We enter into binding contracts with convention centers, hotels, etc. Yes, we have some wiggle room, but not a lot. We can adjust attendance estimates up or down by about 10%.

Universities are in a similar position. Many costs continue whether service is rendered or not.

[apl68]

But there's a huge spectrum between the handful of elite LACs like Wellesley, and the threadbare Super Dinky colleges that claim to have liberal arts long after they've lost them.  Where along that spectrum does a college cease to be entitled to be called an LAC?  Does the term apply only to that handful of elite schools, or does a school where a large minority of students still major in the liberal arts, and still some well-regarded programs (And has a history of being at least moderately selective, although I don't know that they can afford that now) also qualify?

US News lists 223 LACs. Does that seem  like the right ballpark?

Somewhere in that list would be the cutoff for what is considered a Selective LAC. How far down that list do they appear to be selective with a core Liberal Arts curriculum?

They weren't on the list.  "U.S. News" says that they define an LAC as a primarily undergrad school where at least half of students major in the liberal arts.  I suppose that's fair enough.  Alma Mater probably met the criterion when I was there in the late 1980s.  At some point since then they've fallen below the threshold.  But they do still have a meaningful number of liberal arts programs and majors.

[kaysixteen]

That definition does not  necessarily sound bad... but it does beg the question as to exactly which disciplines are properly to be included in the 'liberal arts'?

[Ruralguy]

Well, we cheat by having traditional departments like Econ and Physics offer both traditional majors and majors that are essentially Pre-Bus and Pre-Eng (though we don't call them that). More people start pre-eng tham finish that way, so we keep the liberal arts physics as a parachute.

[polly_mer]

The Carnegie Classification might be useful: https://carnegieclassifications.iu.edu/classification_descriptions/basic.php

A LAC is officially a Baccalaureate College:Arts & Sciences and there are only 241 of them.

An R2, however wonderful in undergrad experience and/or education, is not a LAC.  Super Dinky is not a LAC, but Harvey Mudd is listed.

[Hibush]

The Carnegie Classification might be useful: https://carnegieclassifications.iu.edu/classification_descriptions/basic.php

A LAC is officially a Baccalaureate College:Arts & Sciences and there are only 241 of them.

An R2, however wonderful in undergrad experience and/or education, is not a LAC.  Super Dinky is not a LAC, but Harvey Mudd is listed.

In other words, with ~2,500 four-year colleges in the US, only 10% are LACs. So the term really only applies to a handful of schools, as APL68 was asking. And even fewer are "Selective"..

Using the THE rankings, I find at ~50 Rhodes, Willamette and Elon. Are we still in the elite range? At ~100 are Bard, Rollins, Earlham, Hampshire. Still in SLAC territory? The last is in Dire Financial Straits.

Using the LAC concept as the reference for a "real college" or a "normal college" is clearly incorrect.

[spork]

The Carnegie Classification might be useful: https://carnegieclassifications.iu.edu/classification_descriptions/basic.php

A LAC is officially a Baccalaureate College:Arts & Sciences and there are only 241 of them.

An R2, however wonderful in undergrad experience and/or education, is not a LAC.  Super Dinky is not a LAC, but Harvey Mudd is listed.

In other words, with ~2,500 four-year colleges in the US, only 10% are LACs. So the term really only applies to a handful of schools, as APL68 was asking. And even fewer are "Selective"..

Using the THE rankings, I find at ~50 Rhodes, Willamette and Elon. Are we still in the elite range? At ~100 are Bard, Rollins, Earlham, Hampshire. Still in SLAC territory? The last is in Dire Financial Straits.

Using the LAC concept as the reference for a "real college" or a "normal college" is clearly incorrect.

The THE ranks Wake Forest University and the U.S. Naval Academy in the top 30 U.S. liberal arts colleges, thereby demonstrating the idiocy of such ranking systems.