Showing posts with label Shimer College. Show all posts
Showing posts with label Shimer College. Show all posts

Tuesday, September 5, 2017

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.

Friday, November 11, 2016

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.





Tuesday, August 2, 2016

St. Catharine College of Kentucky is in receivership: More small colleges will close as federal oversight squeezes small liberal arts colleges out of business

Last month, St. Catharine College closed its doors for the final time. More than 100 faculty members and staff were laid off, and a federal court placed the college in receivership, which means a court-appointed overseer will manage the institution's assets on behalf of creditors.

St. Catharine's leaders blamed its closure on the U.S. Department of Education. DOE put the college on its "Heightened Cash Scrutiny" list, subjecting it to more onerous regulation of its federal financial aid money.  College administrators said DOE's move was unjust and forced the college to close.

St. Catharine is one of 517 colleges and universities on DOE's latest "Heightened Cash Scrutiny" list, which includes proprietary schools, a few public universities,  about 40 foreign institutions, and quite a few small liberal arts colleges like St. Catharine.  Not all these schools will  close in coming years, but some of them will.

For example, Shimer College is on the list; Shimer only has about 100 undergraduates. How long do you think Shimer will last? Pine Manor College, a small school in Brookline, Massachusetts, is also on the list. Pine Manor had about 500 students in the fall of 2015; and the total cost of attendance (tuition, room and board, etc.) is $43,000. How healthy do you think Pine Manor is?

Small liberal arts colleges all over the United States will be closing at an accelerating rate in the coming years.  The cost of attendance is simply too high at these little schools. Of course, most small private colleges are now discounting their tuition rates for entering freshmen--on average, first-year students are only paying about 50 percent of the sticker price.  But slashing tuition fees has not lured enough customers for many small colleges to keep their enrollments up.

I don't know enough about St. Catharine's situation to determine whether DOE treated the college unfairly. DOE may have had good reasons for putting St. Catharine on its "Heightened Cash Scrutiny" list. But it is fair to say that DOE's intensive meddling in college affairs has increased administrative costs for American colleges and universities.  Small institutions--colleges with less than a thousand students--simply can't afford the mounting costs of complying with federal mandates.

For a major public university, new  DOE mandates are manageable.  The University of Texas, for example, can hire additional administrators to comply with federal regulations; and it has a battalion of lawyers who can draft updated university policies to comply with new federal regulations that are spewed out of Washington.

But the little colleges simply can't afford the cost of complying with ever more intrusive federal regulations--FERPA, the Clery Act, Title IX, Section 504, etc.  And one by one, small liberal arts colleges will begin closing.

I foresee the day when American higher education will consist of three sectors: 1) secular public institutions, for-profit colleges, and elite private colleges and universities that have large endowments. Small liberal arts colleges, once a respected and important segment of American higher education, will soon be a thing of the past.

St. Cathrine Chapel.jpg
St. Catharine College is in receivership



References

Paul Fain. St. Catharine College Placed in Receivership. Inside Higher Ed, July 28, 2016. Accessible at https://www.insidehighered.com/quicktakes/2016/07/28/former-st-catharine-college-placed-receivership

Rick Howlett. St. Catharine College Closes Its Doors For the Final Time. WFPL, August 1, 2016. Accessible at http://wfpl.org/st-catharine-college-shutters-doors/

Kelly Woodhouse. (2015, November 25). Discount Much? Inside Higher Ed. Accessible at: https://www.insidehighered.com/news/2015/11/25/what-it-might-mean-when-colleges-discount-rate-tops-60-percent?utm_source=Inside+Higher+Ed&utm_campaign=389f6fe14e-DNU20151125&utm_medium=email&utm_term=0_1fcbc04421-389f6fe14e-198565653




Monday, July 25, 2016

The Department of Education has 517 colleges on its"Heightened Cash Monitoring" list due to perceived risks to students and taxpayers: Is your college on the list?

The Department of Education recently released its updated list of colleges that are targeted for "heightened cash monitoring" due DOE concerns about risks these colleges pose to students or taxpayers.  The latest list names 517 colleges, slightly down from the 528 colleges that were on the list in March of 2015. Colleges on the list get more intense federal oversight than other schools.

How does a college get on this list? There are a variety of reasons, including accrediting problems, audit concerns and "financial responsibility," an umbrella term DOE uses to  cover a range of financial issues.

Not surprisingly, a majority of the colleges on the list are proprietary schools, including such esteemed institutions as Toni & Guy Hairdressing Academy and Educators of Beauty College of Cosmetology. But there were 81 public institutions on the "heightened cash monitoring" list, including regional colleges like University of North Alabama and Southwest Minnesota State University.

And DOE flagged no fewer than 40 foreign institutions for heightened cash monitoring, including Hebrew University in Jerusalem, London International Film School, and Pentecostal Theological Seminary in London.  A couple of Polish medical schools also made the list: Medical University of Gdansk and the Medical University of Silesia.

Quite a few nonprofit liberal arts colleges are on DOE's heightened cash monitoring list, including several schools with religious affiliations. It is difficult to tell how many private colleges have religious ties because a college's name may not give it away. Kuyper College in Grand Rapids, Michigan, for example, describes itself as a "minister focused Christian leadership college," but you have to go to the college's web site to find that out.

In fact, of the 32 colleges listed on the first page of DOE's print out of schools under heightened cash monitoring, 13 had some sort of religious tie or heritage, including Kentucky Wesleyan College, St. Catharine College, Eastern Nazarene College, and MacMurray College in Illinois, which was founded, according to its web site, by "devout and erudite Methodist clergymen."

Of course not all 517 colleges marked for enhanced cash monitoring will close. Most of the regional state universities on the list will probably muddle along indefinitely, propped up by state revenues.

But I think a lot of the schools on DOE's list will close. St. Catharine College is in receivership right now.

And what is the future of Shimer College in Chicago, which was recently ranked as one of the worst colleges in America and has only about 100 undergraduates? Shimer was founded in 1853 as Mount Carroll Seminary. Over time, the school evolved to become what it is today, a college that exists on two floors of a rented building and has no clubs or student societies. In 2012 it was ranked the second smallest college in America, after Alaska Bible College.

Of course, Shimer has its defenders and probably has many sterling qualities. Nevertheless, how long do you think Shimer College will last?

DOE's most recent list of colleges under "heightened cash scrutiny" should prompt us to ask several questions:

1) First, why is the federal government lending money for Americans to attend foreign colleges, including a couple of dozen foreign medical schools and several theological institutions? After all, our own country has more than 5,000 postsecondary institutions that participate in the federal student aid program, Does the government really need to finance foreign study?

2) A lot of for-profit schools are going to close in coming years.  Millions of students who attended these institutions received substandard educational experiences that did not lead to well-paying jobs.What should our government do to provide relief to the millions of people who took out loans to enroll in dodgy for-profit schools?

3) Hundreds of small liberal arts colleges are under financial stress, as evidenced by DOE's most recent "heightened cash scrutiny" list and by the escalating closure rate among these institutions. In terms of our nation's overall educational health, should we be concerned about the declining number of private liberal arts colleges, many of which are religiously affiliated?

One thing is certain. Hundreds of American postsecondary institutions, from Toni and Guy's Hairdressing Academy to Harvard, depend heavily on federal student aid money; and a great many colleges could not survive a week without regular infusions of federal funds. This has enabled colleges to hike their tuition rates and increase their annual budgets.

But the party is coming to an end. People have figured out that postsecondary education costs too much--whether it is obtained at a bottom-tier for-profit institution or an elite private liberal arts college. To fix this mess, we must do two things: We must drive down the cost of going to college, and we must provide bankruptcy relief for the millions of worthy souls who took out student loans in good faith and got very little to show for it.



Frances Wood Shimer, Courtesy of Shimer College Wiki
Francis Wood Shimer,: founder of Shimer College


References

Scott Jaschik. Slight Drop in Colleges in Heightened Cash Monitoring. Inside Higher Education, July 25, 2016. Accessible at https://www.insidehighered.com/quicktakes/2016/07/25/slight-drop-colleges-heightened-cash-monitoring?utm_source=Inside+Higher+Ed&utm_campaign=8991789a59-DNU20160725&utm_medium=email&utm_term=0_1fcbc04421-8991789a59-198564813

Ben Miller. America's Worst Colleges. Washington Monthly, September/October 2014. Accessible at http://washingtonmonthly.com/magazine/septoct-2014/americas-worst-colleges/

Jon Ronson. Shimer College; the worst school in America? The Guardian, December 6, 2014. Accessible at https://www.theguardian.com/education/2014/dec/06/shimer-college-illinois-worst-school-america

Michael Stratford, Education Department will release list of colleges found to be risking for students, taxpayers. Inside Higher Education, March 30, 2015. Accessible at https://www.insidehighered.com/news/2015/03/30/education-department-will-release-list-colleges-found-be-risky-students-taxpayers