Coronavirus alert: Mama, don't let your baby live in a college dorm this fall

I went to college during the Vietnam War. Men registered for the draft at age 18 and could be swept into the Army within a few months of registering and swiftly sent on to Southeast Asia.

There were two ways to avoid that fate: men could enlist in the Army Reserve or National Guard, or they could go to college and get a four-year exemption.

There was just one hitch for a guy who went to college. If he flunked out, he was immediately eligible to be drafted. Oklahoma State University, where I wasted four years of my life, flunked out about 50 percent of the first-year class.

 I lived in Cordell Hall, my first year at OSU. Cordell was a gloomy Georgian-style building, which may have been the model for the Shawshank Redemption.  Because it was an old dorm with no air-conditioning, Cordell was mostly full of poor, first-year students who came from small Oklahoma towns.

My dorm floor housed a bunch of these guys. They were away from home for the first time, and they had two things on their minds: beer and girls in that order. Were they worried about getting drafted? No, they were not.

Gary, a freshman from Midwest City, was my roommate. Shortly after arriving on campus, he met Susan, and he spent every waking hour with her. He never bought a single textbook, and he stopped going to class two weeks after the semester started.

In those days, male freshmen were required to enroll in ROTC, which included weekly drills and a strict rule about keeping our shoes shined and our khaki shirts clean and pressed.

Gary blew off all that stuff, and at the end of the semester, his parents received his grades. He failed every subject except ROTC, for which he received a D.

Gary was mystified. He understood why he failed five courses, but could not comprehend how he had passed ROTC without ever going to class.

We puzzled over this conundrum for hours and finally came up with two theories. Gary believed he passed ROTC because he never signed up for drill. Thus, he hadn't been counted absent, and the Army thought Gary had perfect attendance.  My theory was that the Army knew it was going to get Gary sooner or later and didn't want to discourage him so early in his military career.

Why do I tell this story? To make a simple point: 18-old college boys are oblivious to risk. Do you think college students give a damn about the coronavirus?  Can they drink beer while wearing a mask at a campus watering hole? Can they get to first base with a college girl if they socially distance?  No, of course not.

If you are a parent of a student who plans to go to college this fall, you probably received many official notices about COVID-19 and all the things the college plans to do to protect your child from becoming infected.

But you may also have noticed that the college still plans to pack students into residence halls, where they will eat and sleep close to other students, many of whom spent the previous weekend in drunken debauchery. Why all the attention to safety in the classroom but less focus on dorm life?

Why? I'll tell you why. A lot of universities built their dormitories in recent years through a legal device called a Public-Private Partnership agreement (P3).  As Rick Seltzer explained in an outstanding article for Inside Higher Ed, P3s allow universities to offload their debt from dorm construction to private corporations that assume the liability and run the dorms in return for a share of dorm-rent revenue.

This is an excellent deal for the corporations because they are virtually guaranteed a nice profit, especially at colleges that require students to live in campus dorms and even eat their meals there.

But what if the students don't show up this fall?  The money spigot gets shut off, and the corporation can't pay the mortgage on the debt. Oops!

Parents of college-age students should independently assess the risk to their child if he or she lives in a college dorm this fall. The colleges will do the best they can to keep your kid safe and will buy Purell by the barrel. Still, they may be under severe financial restraints because they have significant financial obligations to private partners that require the colleges to keep the dorms full of rent-paying students.

Waylen Jennings warned rural moms not to let their babies grow up to be cowboys--and indeed, that is an unsettling prospect.  But maybe a more useful lyric might be this: Mothers be damned careful about putting your kid in a campus residence hall this fall.

Many small liberal arts colleges are closing: Don't borrow money to attend an institution that is struggling to survive

Many small liberal arts colleges are on the brink of closing, making them a poor risk for people struggling to decide where to get their liberal arts degrees. Last year, one-third of colleges with enrollments below 3,000 students ran operating deficits, which is a very bad sign.

Even these schools' chief financial officers, who have every incentive to paint a rosy picture, are worried. According to the Wall Street Journal, only about half the CFOs at private, nonprofit colleges rated their institutions as being financially stable.

Small liberal arts schools are trying all sorts of strategies to survive. Some, like Holy Cross College in Indiana, have sold real estate to get cash infusions. Others, like Wheelock College in Boston and Shimer College in Chicago, have merged with larger institutions. And some, like Sweet Briar, are sending out distress calls to alumni, hoping cash infusions from wealthy patrons will keep them afloat awhile longer.

But the handwriting has been written on those ivy-covered walls; small liberal arts colleges have no long-term future. Some may limp along by selling real estate or drawing down their endowments, and some may continue to exist in an altered form by merging with stronger institutions. But the small, free-standing, liberal arts college is dead.

What are the implications of this shake up in the higher education industry? First, if you are shopping for a college, do not take out student loans to obtain a liberal arts degree from an obscure, private college that may be extinct before your student loans are repaid. How will you feel if you are still writing monthly student-loan payments ten years after your beloved alma mater closes its doors?

And college administrators and trustees should think about the ethical implications of continuing to recruit students when all the insiders know that their college is on its last legs. Is it morally right for a college with a string of annual budget shortfalls to hire an advertising firm to lure new students?

Of course, small colleges have the right to fight for survival and to try various strategies to meet their operating budgets. But the time must come when terminally ill institutions, like terminally ill hospital patients, must face reality.

A small college can keep itself alive from month to month with regular infusions of student-loan funds and Pell Grant money, just like a comatose patient can live from day to day by being fed intravenously.

But the day finally arrives when it is apparent that a dying institution is only postponing the inevitable by rolling out new schemes to raise cash or lure more students. And that day has come for dozens and dozens of small, private, liberal arts colleges.

Melissa Korn. Some Cash-Strapped Private Colleges Cut Programs, Sell Assets. Wall Street Journal, August 31, 2017.

Rick Seltzer. Shimer Will Become Part of North Central College. Inside Higher Ed, May 27, 2016.

Rick Seltzer. The Future of the Tiny Liberal Arts College. Inside Higher Ed, November 11, 2016.

Mills College struggles to survive: When is it time to say "Do Not Resuscitate"?

Mills College is one of several dozen private liberal arts colleges that are struggling to survive. Rick Seltzer's excellent story on Mills, which appeared yesterday in Inside Higher Ed, reported that the college faced a $9 million budget gap in 2016 but was able to reduce the deficit to $4.3 million by making stringent cuts.

Mills once filled a niche as an elite West Coast women's college, but apparently that identity isn't working anymore. Mills has less than 1,000 undergraduates and about 400 graduate students. It is struggling to find the revenue to fund a $57 million budget.

So what's the solution? Mills' new president, Elizabeth Hillman, announced that Mills' top recruitment priority will be LGBTQ students--students who are lesbian, gay, bisexual, transgender or questioning.

But how will a LGBTQ focus work at a women's college? Will it accept only bisexual women or can male bisexuals apply?  In the Q for questioning category, will it accept biological males who are considering a female identity or just biological females who are pondering a male identity?

Sounds complicated and confusing. Actually, it sounds desperate.

And there's more. Mills' financial stabilization plan calls for a tuition reset. Currently, tuition is pegged at about $45,000 a year, but the college's discount rate is 57 percent. Clearly that pricing structure is not sustainable.

 Mills has a financial stabilization plan, but the details are hazy. "Whether it is a lower price or a more direct and straightforward price, we anticipate that we will also market the new curriculum and a tuition reset together much more heavily than in the past," the college says opaquely.

 What does Mills mean when it says it is considering "a more direct and straightforward price"?  Is that an admission that its current pricing structure is dishonest?

The college also hopes to enroll more women who are focused on science, technology. engineering, and mathematics (STEM). But the college's STEM focus will be hard to sustain when the college is cutting faculty positions and slashing employment benefits. Seltzer's article reports that Mills cut retirement contributions from 9 percent of a faculty member's salary to 6 percent and plans to reduce it further to 2 percent.  Not a great benefits package. So how will Mills attract and retain the professors it needs to sharpen its focus on STEM?

Finally, Mills plans to roll out a "signature experience" for undergraduates "in  an attempt to stand out and attract students." What will that look like? It's not clear, and Seltzer's article asks a pertinent question: "[I]f many colleges have signature experiences, can any of them truly stand out?"

I wish Mills College well, but the hodgepodge of strategies President Hillman sketched out does not impress me. More LGBTQ students, more STEM students, more straightforward pricing, a signature experience, slashing employment benefits---in my mind it all adds up to "quiet desperation" (Thoreau's phrase).

At some point, liberal arts college leaders need to face facts: dozens  of small colleges will close within the next ten years. They are the organizational equivalent of a terminally ill hospital patient.

And when college trustees and administrators know that their institution is on life support, are they acting ethically when they continue to enroll new students? After all, there is a distinct possibility that the LGBTQ freshman (or freshperson) who enrolls at Mills in the fall of 2017 will be an alumna of a college that no longer exists in 2027.

And is it ethical for college deans to hire junior faculty members who will start their careers at an institution that may not be around when they retire?

All across the United States, private liberal arts colleges are on the ropes. Many are grasping for revenue-generating strategies like a dying person searching for a miracle drug. But there comes a time--and that time is fast approaching for many small liberal arts colleges--when a college should simply close.

References

Scott Jaschik. 'Financial Emergency' at Mills. Inside Higher Ed, May 17, 2017.

Rick Seltzer. Mills tries to balance cuts and efforts to grow revenue as it seeks to dig out from financial hole. Inside Higher Ed, May 31, 2017.

Kellie Woodhouse. Trying to Survive. Inside Higher Ed, May 12, 2015.

Private liberal arts colleges are discounting tuition by an average of 44 percent--undercutting the credibility of their sticker prices

Rouses Supermarkets, a Louisiana food chain, advertised a wine and spirits sale a few days ago. Three Olives root beer vodka--normally priced at $20 a bottle, was on sale--4 bottles for ten bucks!

Did I rush to my nearest Rouses grocery store to stock up on root beer vodka? No, I did not. Instead I formed a negative opinion of the stuff. I concluded that any vodka that can be purchased on sale for two dollars and fifty cents a bottle is probably not worth $20 a bottle.

Private liberal art colleges are risking their long term viability by slashing their posted tuition prices drastically. Last year, the colleges discounted freshman tuition by an average of 49 percent; and tuition for students as a whole were slashed by an average of 44 percent.

In an informative article for Inside Higher Ed, Rick Seltzer identified  two trends that are driving colleges to heavily discount their tuition prices.  First, students' families need increased levels of financial aid in the wake of the 2008 recession. Second, colleges are heavily competing for students due to a downward demographic trend of fewer college-age students in the population. Ken Redd, research director for the National Association of College and University Business Officers (NACUBO) was quoted as saying he saw nothing on the horizon that would dissipate those trends.

Not surprisingly, small colleges are discounting tuition more heavily than large comprehensive universities.  At the small schools, freshman tuition is being discounted by more than 50 percent.

According to NACUBO's report, tuition discounting is happening even as colleges raise their sticker prices. Unfortunately, for many colleges, this tactic has not increased net revenue. “If you adjust for inflation, many schools are actually seeing real decreases in net tuition revenue,” Mr. Redd said.

Increased tuition discounts is just another sign that private liberal arts colleges are under an existential threat. Several have closed already, and others are taking drastic action to cut their costs.

Holy Cross College in Indiana sold 75 acres of real estate to Notre Dame to bolster its financial picture even as it struggled to quell rumors that it will soon be closing. Wheeling Jesuit University is encouraging faculty members to retire early.  Mills College, a small women's college in California, is laying of faculty members. Mills is running a $9 million deficit on a $57 million operating budget--clearly not sustainable.

At some colleges, administrators are finding that a smaller and smaller percentage of applicants who are admitted actually show up as students.  Mills for example, admitted 1,242 applicants in 2013-2014; and only 217 applicants actually enrolled. In 2015, the enrollment picture was even bleaker: 639 applicants were admitted and only 139 students actually enrolled.

Some small private colleges will survive in spite of the bleak financial picture. Those that have real estate to sell, like Holy Cross, can keep the wolf from the door for a few more years. Colleges that have large endowments can draw down those funds to meet their budgets.

But ultimately, a lot of small liberal arts colleges are going to close. Their target customers won't be hurt by this trend; they will simply enroll at public institutions. But faculty and staff  from closed colleges are going to find it very difficult to find new jobs.

References

Scott Jaschik. 'Financial Emergency' at Mills. Inside Higher Ed, May 17, 2017.

Rick Seltzer. Discounting Keeps Climbing. Inside Higher Ed, May 15, 2017.

Rick Seltzer. Holy Cross College to Sell Land to Notre Dame. Inside Higher Ed, May 15, 2017.

Rick Seltzer. Early Retirements at Wheeling Jesuit. Inside Higher Ed, May 10, 2017.

Governor Cuomo's plan to offer free public college education for New Yorkers will wreck private colleges in the Empire State

Like Bernie Sanders, I buy my clothes at Joseph A. Banks, where almost everything Banks sells is on sale almost all the time. For example, Joseph A. Banks sells very good men's dress shirts for $89, but this week they are on sale for 2 for $89. 

The on-sale-all-the-time business model works well for Joseph A. Banks, but it is not working that well for private liberal arts colleges--particularly the nondescript little colleges that are so common in the Northeast and upper Midwest.  These colleges are now discounting freshman tuition by  an average of 48.6 percent, the same discount rate that Joseph A. Banks sells its shirts. For undergraduates as a whole, the average discount is 42 percent. 

Basically, more and more people are buying a liberal arts education at wholesale prices. And even with steep discounts, private colleges are having trouble luring new students to their campuses.

And now New York's private colleges face a new threat. Governor Andrew Cuomo launched a plan to provide a free college education at New York's public colleges and universities to families with annual incomes of $125,000 a year or less.  This may pose a mortal blow to many private liberal arts colleges in the Empire State.

Charles L. Flynn Jr., president of the College of Mount Saint Vincent, said Governor Andrew Cuomo's plan has thrown the New York marketplace for higher education" into confusion." Indeed, private schools in New York compete with New York's public universities for students, and Cuomo's free-college-education scheme will definitely hurt private institutions. A report prepared by the Commission on Independent Colleges and Universities in New York estimates that  Cuomo's plan will cause enrollments to decline at New York private colleges by 7 to 15 percent. 

What can the private liberal arts colleges do to meet this threat? Not much. As President Flynn told Inside Higher Ed, his college already discounts freshman tuition by 50 percent. “How can I go above that?” he said. “We don’t have a lot more aid to throw.”

New York has more than 100 private colleges and universities, many of them obscure: institutions like Daemen College, Houghton College, Saint  John Fisher College, Hilbert College, Medaille College, Trocaire College, Canisius College, Molloy College, Cazenovia College,and Roberts Wesleyan College. Most of these schools draw the bulk of their students from families residing inside the state. 

Unless private New York colleges have elite status--Hamilton College, Barnard College, Sarah Lawrence College, etc.--they have little to offer that cannot be obtained at a SUNY institution for less money.  And thanks to Governor Cuomo, many New York families can now choose between a small liberal arts college that offers discounted tuition and a public university they can attend for free. 

The wolf is now at the door for New York's small liberal arts colleges.

References

Rick Seltzer. A Marketplace in Confusion. Insider Higher Ed, April 13, 2017.

Tuition Discounts at Private Colleges Continue to Climb (Press Release). National Association of College and University Business Officers, May 16, 2016.

Report: Effects and Consequences of the Excelsior Scholarship Program On Private, Not-for-Profit Colleges and Universities. Commission on Independent Colleges and Universities in New York, March 2017.

Tiny liberal arts colleges are dead. They just don't know it. 15 small-college presidents meet in New York City.

My father was a fighter pilot in the Army Air Corps in December, 1941, stationed at Clark Field in the Philippines. He often told this story about his introduction to World War II.

About two weeks before the Japanese attacked Pearl Harbor, my father told me, his commander called all the young airmen together for a meeting.

"Make out your wills and get your affairs in order," the commander told the pilots. You are not dead yet, but most of you will be soon."

And the commander was right. My father's P-40 fighter plane was bombed on the ground when the Japanese attacked Clark Field a few hours after the Pearl Harbor attack. Six months later, my father  was captured on the Bataan Peninsula, along with the entire American  army. He experienced the Bataan Death March and spent the rest of the war in a Japanese concentration camp. Two thirds of his fellow prisoners died while in captivity.

I thought of my father's story as I read an article about a recent meeting of 15 presidents of the nation's smallest liberal arts colleges, which took place in New York City last June. All  15 presidents represented institutions with 800 students or fewer.

Rick Seltzer of Inside Higher Ed reported on the meeting, from which I gathered the presidents concluded that their colleges are doing a great job educating young people. The problem, from the presidents' perspective, is poor public relations; the public simply does not realize just how neat and special these colleges are.

Thomas O'Reilly, president of Pine Manor College (about 450 students), said this about his institution: "We're small enough that we can work with a handful of students, and if it works for them, it can be quickly spread across the rest of the programs we're offering.. If it doesn't we can quickly stop--just as importantly--without having made a major investment."

OK, I got it. Small liberal arts colleges are nimble, and that's why they're special.

Mariko Silver, president of Bennington College, another micro institution, said the nation was  focused overmuch on scaling up higher education without appreciating the small colleges. "One of the things that I feel makes American higher education the envy of the world is a real diversification of institution types--an ecosystem."

Nice talking points, Mariko! Everyone in higher education likes to be reassured that American colleges are the envy of the world.

But in fact, the tiny liberal arts colleges are on the verge of extinction. A few small liberal arts colleges will survive and even thrive: those with large endowments or sterling reputations like many of the small liberal arts colleges in New England. And small colleges that excel in nursing or health care will probably be fine.

But tiny colleges with 800 students are fewer cannot long survive, in my opinion. As my father's commander might have put; they are dead and just don't know it.

 I don't say this with any pleasure. The microbrew college presidents are probably right to say there is a distinct value to receiving a liberal arts education at a small college. But the economics of higher education today simply won't allow the small liberal arts colleges to survive. In 2015, Moody's Investor Service predicted that college closings would triple by 2017.

And Moody's prediction is too conservative. Of the 15 colleges represented at the New York City meeting last June, I predict half will close within five years. Shimer College, for example, has fewer than 100 students. Who thinks it will still be open in 2022? Shimer is in Chicago. I'm surprised Shimer's president could afford to travel to New York City.

Apart from all the other challenges small liberal arts college face, they simply can't survive in a world of ever increasing state and federal regulations. And here's an example.

In a case decided by the Second Circuit Court of Appeals last May, Michele Dziedzic sued SUNY Oswego for sexual discrimination under the Civil Rights Act of 1964 because she was transferred from the paint department to the plumbing department. The plumbing department, in her view, was "less prestigious" than the paint department, which she maintained was an elite unit. Dziedzic also said she had suffered from a hostile working environment due to sexual jokes and racy pictures that she was forced to endure when she collected her mail from a mailbox in the men's locker room.

I am not belittling Ms. Dziedzic's grievances. She may very well have been transferred to the plumbing department for nefarious reasons, and being forced to visit the men's locker room to collect her mail may have been humiliating.

But is this a federal case that must travel to the Second Circuit Court of Appeals? The suit may not have cost Ms. Dziedzic much; she represented herself. But SUNY Oswego was represented by four lawyers!

How many suits like that could an institution like Shimer College or Pine Manor College endure? Not many.

At my own institution, I signed a form awhile back certifying that I had read a safety memo informing me that it is dangerous for university students or employees to text on their cell phones while walking on campus. I imagine this memo was spawned by some state or federal safety regulation. How much did my university spend warning students and employees not to walk while texting?

In recent years, the U.S. Department of Education has issued "Dear Colleague" letters that dictate how colleges manage their restrooms and their student grievance procedures.  Each of these "Dear Colleague" letters imposes a financial burden on coleges and uniersities.

And the colleges don't push back on the ever tightening noose of federal regulation because they are all addicted to federal student aid money.

I will be sorry to see the small liberal arts fade away like old soldiers. But I feel sorrier still for students who take out student loans to attend these dying institutions--institutions that may well be closed before their graduates pay off their student loans.


References

Dziedzic v. State University of New York at Oswego, 648 Fed.Appx. 125 (2d Cir. 2016).

Rick Seltzer. Leaders consider future of tiny liberal arts colleges. Inside Higher ED, November 11, 2016.

Kellie Woodhouse. Moody's predicts college closures to triple by 2017. Insider Higher ED, September 28, 2015.