Colleges in Dire Financial Straits

[spork]

That report was released in 2016 and was mentioned, most recently, at Inside Higher Ed today.

[spork]

That report was released in 2016 and was mentioned, most recently, at Inside Higher Ed today.

The Inside Higher Ed piece is here. I have a sibling who works in a non-faculty capacity for a small university that resembles those discussed in the essay. The numbers for his employer, in terms of annual rate of change, were decreasing over time, which is good. But enrollment overall has declined somewhat.

[pepsi_alum]

An interesting article from The Atlantic about Yankton College (closed in 1984) being a precursor to college closures:

https://www.theatlantic.com/education/archive/2019/07/colleges-are-shutting-down-and-yankton-was-precursor/593809/

[jackiekerouac]

The entire U of Alaska system is about to be demolished by their Gov.  I hope other states don't decide to follow suit.

[polly_mer]

More news from Alaska: https://www.insidehighered.com/news/2019/07/19/faculty-group-alaskas-anchorage-campus-says-fairbanks-should-bear-brunt-state-cuts

It's looking grim.

[ciao_yall]

Meanwhile, back in California, the price of (ersatz) innovation...

https://www.sfchronicle.com/bayarea/article/California-s-online-community-college-plans-to-14109597.php

[Golazo]

Cincinnati Christian: https://www.chronicle.com/article/Dire-Financial-Straits-/246735

Since 2015, the leaders of Cincinnati Christian University have made bold moves to try to reverse falling enrollment and flagging finances. The university spent big money on athletics, laid off staff and faculty members to cut costs, and revised its academic mission.

But instead of revitalizing the institution, those decisions are among the many that have pushed Cincinnati Christian toward the brink of financial ruin and put it at risk of losing its accreditation. The university has been hemorrhaging money even as it owes millions in debt it can't cover. At the same time, an effort to bolster enrollment has failed spectacularly, with double-digit drops in student retention and graduation rates

Nothing inherently wrong with athletics (thought a lot times it ends up of wrong), but NAIA football is not likely a money maker, and investing in athletics at the expense of academics is a good way to the death spiral (not to mention to governance issues)

[spork]

Cincinnati Christian: https://www.chronicle.com/article/Dire-Financial-Straits-/246735

Since 2015, the leaders of Cincinnati Christian University have made bold moves to try to reverse falling enrollment and flagging finances. The university spent big money on athletics, laid off staff and faculty members to cut costs, and revised its academic mission.

But instead of revitalizing the institution, those decisions are among the many that have pushed Cincinnati Christian toward the brink of financial ruin and put it at risk of losing its accreditation. The university has been hemorrhaging money even as it owes millions in debt it can't cover. At the same time, an effort to bolster enrollment has failed spectacularly, with double-digit drops in student retention and graduation rates

Nothing inherently wrong with athletics (thought a lot times it ends up of wrong), but NAIA football is not likely a money maker, and investing in athletics at the expense of academics is a good way to the death spiral (not to mention to governance issues)

Pulled this link to the story off Twitter. No paywall for now:

https://www.chronicle.com/article/Dire-Financial-Straits-/246735?key=lZNp9FHkDfv6nyFEhWZrDUP3TWbE0z77QLb3gsyHC2ozlrjbb2cRryMhOlbj2yKaTWc1azVoVlQ3ZF95RVJXTjJuOE9pb3JmQzcxNUZmek9YQXV2MzcyYW8yVQ.

[spork]

Henderson State University's president resigns, effective immediately:

https://katv.com/news/local/henderson-state-university-president-submits-resignation.

How convenient that he can skip town for a year and return as a tenured faculty member.

[biop_grad]

Henderson State University's president resigns, effective immediately:

https://katv.com/news/local/henderson-state-university-president-submits-resignation.

How convenient that he can skip town for a year and return as a tenured faculty member.

I wonder if it's part of a deal to get him to step down.

[dr_codex]

Henderson State University's president resigns, effective immediately:

https://katv.com/news/local/henderson-state-university-president-submits-resignation.

How convenient that he can skip town for a year and return as a tenured faculty member.

I wonder if it's part of a deal to get him to step down.

It's often part of the deal. "Returning to faculty" is the term around these parts. The idea is that if you want to promote from within, you have to offer a landing spot if things don't work out. It's the same reason that incoming Provosts/VPAA usually insist on tenure, and that department chairs usually have it. Corporate capitalism does it differently, with golden parachutes for failed executives, although they happen in academia, too.

You'll note, too, the lack of certainty about the return to faculty. Just as likely, the sabbatical will be used to hunt for another job; whether or not there's a clawback of salary if that happens depends a lot, I should think, on what deal got cut, and perhaps on what the auditors find.

[polly_mer]

Cincinnati Christian: https://www.chronicle.com/article/Dire-Financial-Straits-/246735

Since 2015, the leaders of Cincinnati Christian University have made bold moves to try to reverse falling enrollment and flagging finances. The university spent big money on athletics, laid off staff and faculty members to cut costs, and revised its academic mission.

But instead of revitalizing the institution, those decisions are among the many that have pushed Cincinnati Christian toward the brink of financial ruin and put it at risk of losing its accreditation. The university has been hemorrhaging money even as it owes millions in debt it can't cover. At the same time, an effort to bolster enrollment has failed spectacularly, with double-digit drops in student retention and graduation rates

Nothing inherently wrong with athletics (thought a lot times it ends up of wrong), but NAIA football is not likely a money maker, and investing in athletics at the expense of academics is a good way to the death spiral (not to mention to governance issues)

Pulled this link to the story off Twitter. No paywall for now:

https://www.chronicle.com/article/Dire-Financial-Straits-/246735?key=lZNp9FHkDfv6nyFEhWZrDUP3TWbE0z77QLb3gsyHC2ozlrjbb2cRryMhOlbj2yKaTWc1azVoVlQ3ZF95RVJXTjJuOE9pb3JmQzcxNUZmek9YQXV2MzcyYW8yVQ.

You can read the Show Cause letter at https://www.hlcommission.org/download/_BoardActionLetters/HLC%20Action%20Letter%20-%20Cincinnati%20Christian%20University%207.11.19.pdf .  The discussion at my house was how much worse off this institution was than Super Dinky College.

In particular,

The Institution does not meet Criterion Five, Core Component 5.A, "the institution's resource base supports its current educational programs and its plans for maintaining and strengthening their quality in the future," for the following reasons:

• In 2015, CCU's Board of Trustees implemented an aggressive Restructure Plan with a view to reversing deficit spending trends, right-sizing resource allocations to reflect current realities and future priorities, and ensuring the long-term financial viability of the mission. At that time, CCU had a pattern of deficit spending, with expenditures exceeding revenues from tuition and gifts by $350,000 per month. The plan called for expenditure reductions that eliminated about one-third of CCU's administrative staff and ten percent of the faculty. While the plan has forced changes to the operations of
CCU, the Institution remains financially fragile.

• The Institution monitors its operating cash position closely and has needed to utilize its operating line of credit every month during the past 12-month period. It also maximized its line of credit authorization of $1.7 million at least once during this period.

• For 2016, 2017 and 2018, the HLC Composite Financial Index (CFI) for CCU remained below 0.5 which for a private institution is "Below the Zone."

• In July 2018, the Office of Federal Student Aid of the U.S. Department of Education determined that CCU failed to meet the standards of financial responsibility. As a result, CCU posted a letter of credit.

• The June 30, 2018 Consolidated Financial Audit reports a decrease in total liabilities and net assets from $16,102,731 (2017) to $14,623,049 (2018).

• Note 19 of the aforementioned audit raised substantial doubt about CCU's ability to continue as a going concern due to recurring decreases in net assets.

The staffing situation is also absurd with

• CCU has 17 faculty who are primarily teaching faculty, as well as approximately 9 instructors who are considered part-time and teach, advise, and mentor students. In addition, approximately 40-70 adjuncts teach per semester. Evidence indicates that the number of individuals available to teach the FTE of 666 students may not be sufficient.

• Student surveys conducted over several years indicate that students were significantly impacted by the loss of faculty.

<snip>

• CCU has not provided sufficient evidence that it assesses the level of effectiveness and student satisfaction with disability services.

• Student satisfaction with technology resources on campus is declining, with the score in related surveys dropping from 1.80 in 2015 to 1.51 in 2017.

• Students report insufficient IT staff and computers in the labs.

• There does not appear to be any leadership for the IT department. Services are outsourced and CCU acknowledges that the contractor is not well-versed with classroom technology problems.

• Library staff for a FTE of 666 students includes one full-time librarian and one full-time administrative assistant. This staffing level is the same as in 2013 and 2015 before the Institution had a large influx of students, especially those on a conditional plan. Three additional staff are available and work on a part-time or hourly schedule, and it appears that two of the three staff are focused on the catalog backlog.

• CCU has not demonstrated it has sufficient library personnel to conduct library services for faculty and both undergraduate and graduate students.

<snip>

• The planning process has set a goal of 2,000 students, half of whom will be in online programs. CCU does not have online programs that will attract students, and those it attracts may be part-time enrollees.

So their plan is growing from 700 students to 2000 with a thousand online students when they have inadequate IT support.  Yeah, Show Cause seems appropriate.

[spork]

Perhaps this deserves a separate thread, but in cases like Cincinnati Christian, why aren't trustees legally held to account for breaches of fiduciary duty? Is it because "stupid" is not considered "illegal," and everything is labeled the former?

[polly_mer]

Perhaps this deserves a separate thread, but in cases like Cincinnati Christian, why aren't trustees legally held to account for breaches of fiduciary duty? Is it because "stupid" is not considered "illegal," and everything is labeled the former?

My bet is that people don't know to file the lawsuits for breach of fiduciary duty until the college actually goes under.

[Henri de Tonti]

Cincinnati Christian: https://www.chronicle.com/article/Dire-Financial-Straits-/246735

Since 2015, the leaders of Cincinnati Christian University have made bold moves to try to reverse falling enrollment and flagging finances. The university spent big money on athletics, laid off staff and faculty members to cut costs, and revised its academic mission.

But instead of revitalizing the institution, those decisions are among the many that have pushed Cincinnati Christian toward the brink of financial ruin and put it at risk of losing its accreditation. The university has been hemorrhaging money even as it owes millions in debt it can't cover. At the same time, an effort to bolster enrollment has failed spectacularly, with double-digit drops in student retention and graduation rates

Nothing inherently wrong with athletics (thought a lot times it ends up of wrong), but NAIA football is not likely a money maker, and investing in athletics at the expense of academics is a good way to the death spiral (not to mention to governance issues)

Pulled this link to the story off Twitter. No paywall for now:

https://www.chronicle.com/article/Dire-Financial-Straits-/246735?key=lZNp9FHkDfv6nyFEhWZrDUP3TWbE0z77QLb3gsyHC2ozlrjbb2cRryMhOlbj2yKaTWc1azVoVlQ3ZF95RVJXTjJuOE9pb3JmQzcxNUZmek9YQXV2MzcyYW8yVQ.

You can read the Show Cause letter at https://www.hlcommission.org/download/_BoardActionLetters/HLC%20Action%20Letter%20-%20Cincinnati%20Christian%20University%207.11.19.pdf .  The discussion at my house was how much worse off this institution was than Super Dinky College.

In particular,

The Institution does not meet Criterion Five, Core Component 5.A, "the institution's resource base supports its current educational programs and its plans for maintaining and strengthening their quality in the future," for the following reasons:

• In 2015, CCU's Board of Trustees implemented an aggressive Restructure Plan with a view to reversing deficit spending trends, right-sizing resource allocations to reflect current realities and future priorities, and ensuring the long-term financial viability of the mission. At that time, CCU had a pattern of deficit spending, with expenditures exceeding revenues from tuition and gifts by $350,000 per month. The plan called for expenditure reductions that eliminated about one-third of CCU's administrative staff and ten percent of the faculty. While the plan has forced changes to the operations of
CCU, the Institution remains financially fragile.

• The Institution monitors its operating cash position closely and has needed to utilize its operating line of credit every month during the past 12-month period. It also maximized its line of credit authorization of $1.7 million at least once during this period.

• For 2016, 2017 and 2018, the HLC Composite Financial Index (CFI) for CCU remained below 0.5 which for a private institution is "Below the Zone."

• In July 2018, the Office of Federal Student Aid of the U.S. Department of Education determined that CCU failed to meet the standards of financial responsibility. As a result, CCU posted a letter of credit.

• The June 30, 2018 Consolidated Financial Audit reports a decrease in total liabilities and net assets from $16,102,731 (2017) to $14,623,049 (2018).

• Note 19 of the aforementioned audit raised substantial doubt about CCU's ability to continue as a going concern due to recurring decreases in net assets.

The staffing situation is also absurd with

• CCU has 17 faculty who are primarily teaching faculty, as well as approximately 9 instructors who are considered part-time and teach, advise, and mentor students. In addition, approximately 40-70 adjuncts teach per semester. Evidence indicates that the number of individuals available to teach the FTE of 666 students may not be sufficient.

• Student surveys conducted over several years indicate that students were significantly impacted by the loss of faculty.

<snip>

• CCU has not provided sufficient evidence that it assesses the level of effectiveness and student satisfaction with disability services.

• Student satisfaction with technology resources on campus is declining, with the score in related surveys dropping from 1.80 in 2015 to 1.51 in 2017.

• Students report insufficient IT staff and computers in the labs.

• There does not appear to be any leadership for the IT department. Services are outsourced and CCU acknowledges that the contractor is not well-versed with classroom technology problems.

• Library staff for a FTE of 666 students includes one full-time librarian and one full-time administrative assistant. This staffing level is the same as in 2013 and 2015 before the Institution had a large influx of students, especially those on a conditional plan. Three additional staff are available and work on a part-time or hourly schedule, and it appears that two of the three staff are focused on the catalog backlog.

• CCU has not demonstrated it has sufficient library personnel to conduct library services for faculty and both undergraduate and graduate students.

<snip>

• The planning process has set a goal of 2,000 students, half of whom will be in online programs. CCU does not have online programs that will attract students, and those it attracts may be part-time enrollees.

So their plan is growing from 700 students to 2000 with a thousand online students when they have inadequate IT support.  Yeah, Show Cause seems appropriate.

The auditor has doubts that it can be deemed a going concern. That's really bad