As reported by Bloomberg, 763 colleges and schools closed last year--the highest number since 2012, when more than 900 schools were closed. In fact, since 1984, more than 13,000 post-secondary schools have shut down, including more than 300 foreign schools. And all these institutions--including the foreign institutions--were beneficiaries of the federal student aid program at the time of their demise, which mean they got Pell grant funds and federal student-loan money while they were operating.
However, a close look at the Department of Education's closed schools list, however, reveals that the numbers are not as alarming as they might first appear. First of all, most of these schools were small propriety trade schools, barber schools, schools of cosmetology, etc, which had relatively small numbers of students. For example, Ruth's Beauty College and the Hollywood Script Writing Institute are on that list, along with Paul's Academy of Cosmetology.
Moreover, many schools on the list were simply branches of institutions that are still thriving. University of Oklahoma, for example, closed a campus at Kunsan Army Base and another one at Rhein Air Base. In fact, mainline universities all over the United States have been shutting down unprofitable satellite campuses, and these closings have swelled the list of total closures.
Nevertheless, sprinkled among the beauty schools, barber colleges, and satellite campuses on the closed school list, are a significant number of free-standing colleges that have shut their doors. A few recent examples have made the national news: St. Catharine College in Kentucky, Dowling College in New York, St. Joseph's College in Indiana, Virginia Intermont College, and Virginia's Sweet Briar College (which later reopened).
And more are sure to follow. Moody's Investors Service predicted in 2015 that the number of annual college closures would triple in the years to come to about 15, and this estimate is probably too low. In my view, no college with an enrollment of less than 1000 students can survive long; and there are a lot of schools in that category.
Here are some things to think about as the closure rate for postsecondary institutions accelerates:
I. Expedited loan forgiveness for former students of for-profit colleges
First, all these schools--all 13,000 of them--participated in the federal student loan program, and a great many of them left their former students in the lurch. ITT Tech and Corinthian Colleges alone had a total of half a million former students, and both institutions are in bankruptcy.
The Department of Education needs to develop an expedited loan forgiveness process for student-loan debtors who attended closed schools--particularly the for-profit schools that close at the rate of several hundred a year. In fact, all students who to took out loans to attend a closed for-profit college should have their loans automatically forgiven--no questions asked.
II. A central records repository to maintain student transcripts of closed colleges
Second, a central records repository needs to be established to maintain the transcripts of students who attended these closed institutions. This should be a federal responsibility since many of these schools were created primarily to capture federal student aid money.
III.Shutting down the for-profit sector and foreign participation in the federal student loan program
Finally, we've simply got to shut down the for-profit college sector, and we've got to quit subsidizing foreign colleges that are receiving federal student aid funds. Let's face it: a great many of the defunct for-profit schools were created for the primary purpose of feasting from the federal larder of easy student-loan money.
Do we need postsecondary training in the trades? Yes, we do, but that mission should be assigned to public community colleges and not to flaky outfits like Bubba's Welding Academy.
References
Another Small Private Closes Its Doors. Inside Higher Ed,
June 1, 2016.
Paul Fain. The Department and St. Catharine. Inside Higher Ed,
June 2, 2016.
Lyndsey Layton. Virginia Tech pays fine for failure to warn campus during 2007 massacre. Washington Post,
April 16, 2014.
Rick Seltzer. Closing out a college. Insider Higher Education, January 5, 2017.
Kate Smith. Here's What Happens to Endowments When Colleges Close. Bloomberg.com, March 6, 2017.
Susan Svrluga. Alumnae vowed to save Sweet Briar from closing last year. And they did. Washington Post, March 3, 2016.
Kellie Woodhouse. Closures to Triple. Inside Higher Education, September 28, 2015.
Showing posts with label Dowling College. Show all posts
Showing posts with label Dowling College. Show all posts
Friday, March 10, 2017
Friday, January 6, 2017
Globe University and Minnesota School of Business are closing: We need federal legislation to manage college shutdowns
Globe University and Minnesota School of Business (MSB) began closing their campuses last month. The two for-profit institutions once operated in three states--Minnesota, South Dakota, and Wisconsin; but a series of regulatory and court actions brought them down.
In September, a Minnesota court ruled that Globe and MSB committed fraud by inducing students to enroll in their criminal justice programs. Not long after, the Department of Education cut them off from federal student-aid funding. No for-profit college can survive a month without federal student-loan revenue, so DOE's action amounted to a death sentence for both institutions.
The demise of Globe and MSB follow in a train of college shutdowns over the past couple of years. The casualty lists includes Corinthian Colleges and ITT, two for-profits that declared bankruptcy. St. Catharine College and Dowling College also shut their doors, along with Virginia Intermont College.
DOE has more than 500 colleges on its "heightened cash monitoring" watch list, and many of these schools will shut down within the next three or four years. In a 2015 report, Moody's Investment Services predicted colleges would close at the rate of 15 per year commencing this year.
Now is the time for Congress to pass legislation to protect colleges' former students when the institution they attended shuts down. At a minimum, Congress should do the following:
I. Congress should pass legislation requiring every defunct college to deposit all student records in a central federal depository.
First student records at failed colleges must be preserved. Former students will need access to their official transcripts for decades after their alma mater closes, but how will they get those transcripts 25 years after the institution they attended shut its doors?
Currently, some closing colleges are voluntarily making arrangements to preserve student records. Dowling College, for example, which filed for bankruptcy in 2016, sent its student records to nearby Long Island University.
But not all closing colleges will act as responsibly as Dowling. In particular, colleges that are accused of defrauding their students have no incentive to preserve student records because those records might be used against them in legal proceedings.
Congress needs to adopt legislation that requires every college that receives federal funds to send all student records, including transcripts, to a federal records depository in the event of a closure. And colleges should be required to digitize their student records according to a standardized protocol so that the process of transferring records after a college closes can be done quickly and efficiently.
II. Non-operating colleges should forgive any loans owed to them by former students.
Most nonpublic colleges depend on federal student aid money for the bulk of their revenues, but some also lend money directly to their students. For example, Globe and MSB loaned money to their students at interest rates as high as 18 percent. According to a Minnesota court decision, the two institutions loaned money to approximately 6,000 students between 2009 and 2016.
Globe and MSB will be defunct in a matter of weeks, but the loans they made to students are debts they may try to collect. Federal law should require every college that loans money to students to forgive those loans if the college closes. As a matter of simple justice, a college that shuts down shouldn't be chasing after students who owe it money.
III. Congress should ease the path to bankruptcy relief for students who attended for-profit colleges.
Finally, Congress needs to streamline the loan-forgiveness process for students who attend for-profit colleges and received no economic benefit from the experience. It is particularly unjust for students to be on the hook for student loans taken out to attend a for-profit college that closed after being found guilty of fraud.
Under DOE regulations, students can apply to have their student loans discharged if they can make one of two showings: 1) they were induced to enroll based on fraud, or 2) they took out loans to attend a college that closed while they were enrolled or within 120 days of being enrolled.
Unfortunately, the administrative process for resolving discharge applications is slow and entirely inadequate to deal with the potential volume of claims. After all, Corinthian Colleges and ITT, which are both in bankruptcy, have around a half million former students between them.
Currently, the Bankruptcy Code bars debtors from discharging student loans in bankruptcy unless they can show that paying back their loans would create an "undue hardship." Most bankruptcy courts have interpreted the undue hardship standard harshly, making it incredibly difficult for most college borrowers to clear their student loans through the bankruptcy process.
Congress should pass legislation that eliminates the undue hardship standard for all people who took out loans to attend a for-profit college and wound up broke. The five-year default rate for a recent cohort of students who attended for-profit colleges is 47 percent--a clear indication that a lot of people got no benefit from attending a for-profit institution.
Conclusion: The Nation faces a swelling tide of college closures and needs an orderly process for shutting down higher education institutions.
One thing is certain: colleges are closing at an accelerating rate; and the Nation need an orderly process to minimize the harm to defunct colleges' former students. Student records must be safeguarded, student debt to failed institutions should be wiped out, and Congress needs to amend the Bankruptcy Code to allow former for-profit college students to obtain bankruptcy relief.
References
Christopher Magan. Globe U. and Minnesota School of Business to start closing campuses. Twin Cities Pioneer Press, December 21, 2016.
Rick Seltzer. Virginia Intermont's campus sale begs question of how colleges close accounts. Inside Higher Ed, January 5, 2017.
State of Minnesota v. Minnesota School of Business, 885 N.W.2d 512 (Minn. Ct. App. 2016).
Alia Wong. Farewell to America's Small Colleges, Atlantic, October 2, 2015.
In September, a Minnesota court ruled that Globe and MSB committed fraud by inducing students to enroll in their criminal justice programs. Not long after, the Department of Education cut them off from federal student-aid funding. No for-profit college can survive a month without federal student-loan revenue, so DOE's action amounted to a death sentence for both institutions.
The demise of Globe and MSB follow in a train of college shutdowns over the past couple of years. The casualty lists includes Corinthian Colleges and ITT, two for-profits that declared bankruptcy. St. Catharine College and Dowling College also shut their doors, along with Virginia Intermont College.
DOE has more than 500 colleges on its "heightened cash monitoring" watch list, and many of these schools will shut down within the next three or four years. In a 2015 report, Moody's Investment Services predicted colleges would close at the rate of 15 per year commencing this year.
Now is the time for Congress to pass legislation to protect colleges' former students when the institution they attended shuts down. At a minimum, Congress should do the following:
I. Congress should pass legislation requiring every defunct college to deposit all student records in a central federal depository.
First student records at failed colleges must be preserved. Former students will need access to their official transcripts for decades after their alma mater closes, but how will they get those transcripts 25 years after the institution they attended shut its doors?
Currently, some closing colleges are voluntarily making arrangements to preserve student records. Dowling College, for example, which filed for bankruptcy in 2016, sent its student records to nearby Long Island University.
But not all closing colleges will act as responsibly as Dowling. In particular, colleges that are accused of defrauding their students have no incentive to preserve student records because those records might be used against them in legal proceedings.
Congress needs to adopt legislation that requires every college that receives federal funds to send all student records, including transcripts, to a federal records depository in the event of a closure. And colleges should be required to digitize their student records according to a standardized protocol so that the process of transferring records after a college closes can be done quickly and efficiently.
II. Non-operating colleges should forgive any loans owed to them by former students.
Most nonpublic colleges depend on federal student aid money for the bulk of their revenues, but some also lend money directly to their students. For example, Globe and MSB loaned money to their students at interest rates as high as 18 percent. According to a Minnesota court decision, the two institutions loaned money to approximately 6,000 students between 2009 and 2016.
Globe and MSB will be defunct in a matter of weeks, but the loans they made to students are debts they may try to collect. Federal law should require every college that loans money to students to forgive those loans if the college closes. As a matter of simple justice, a college that shuts down shouldn't be chasing after students who owe it money.
III. Congress should ease the path to bankruptcy relief for students who attended for-profit colleges.
Finally, Congress needs to streamline the loan-forgiveness process for students who attend for-profit colleges and received no economic benefit from the experience. It is particularly unjust for students to be on the hook for student loans taken out to attend a for-profit college that closed after being found guilty of fraud.
Under DOE regulations, students can apply to have their student loans discharged if they can make one of two showings: 1) they were induced to enroll based on fraud, or 2) they took out loans to attend a college that closed while they were enrolled or within 120 days of being enrolled.
Unfortunately, the administrative process for resolving discharge applications is slow and entirely inadequate to deal with the potential volume of claims. After all, Corinthian Colleges and ITT, which are both in bankruptcy, have around a half million former students between them.
Currently, the Bankruptcy Code bars debtors from discharging student loans in bankruptcy unless they can show that paying back their loans would create an "undue hardship." Most bankruptcy courts have interpreted the undue hardship standard harshly, making it incredibly difficult for most college borrowers to clear their student loans through the bankruptcy process.
Congress should pass legislation that eliminates the undue hardship standard for all people who took out loans to attend a for-profit college and wound up broke. The five-year default rate for a recent cohort of students who attended for-profit colleges is 47 percent--a clear indication that a lot of people got no benefit from attending a for-profit institution.
Conclusion: The Nation faces a swelling tide of college closures and needs an orderly process for shutting down higher education institutions.
One thing is certain: colleges are closing at an accelerating rate; and the Nation need an orderly process to minimize the harm to defunct colleges' former students. Student records must be safeguarded, student debt to failed institutions should be wiped out, and Congress needs to amend the Bankruptcy Code to allow former for-profit college students to obtain bankruptcy relief.
Photo credit: Wisconsin Public Radio |
References
Christopher Magan. Globe U. and Minnesota School of Business to start closing campuses. Twin Cities Pioneer Press, December 21, 2016.
Rick Seltzer. Virginia Intermont's campus sale begs question of how colleges close accounts. Inside Higher Ed, January 5, 2017.
State of Minnesota v. Minnesota School of Business, 885 N.W.2d 512 (Minn. Ct. App. 2016).
Alia Wong. Farewell to America's Small Colleges, Atlantic, October 2, 2015.
Friday, December 9, 2016
Globe University will probably file for bankruptcy. Why can't students who took out loans to attend Globe get bankruptcy relief as well?
Globe University/ Minnesota School of Business is collapsing like a house of cards. Last September, a Minnesota judge ruled that Globe/MSB violated Minnesota consumer protection laws, and the Minnesota Office of Higher Education began the process of barring it from doing business in the state of Minnesota.
In October, the U.S. Department of Education ordered Globe to stop enrolling students, and this month, DOE cut off all federal student-aid funding to Globe. Globe cannot survive without federal student aid money, and it seems likely it will soon file for bankruptcy.
Bankruptcy is a good thing for failing colleges. In fact, several higher education institutions filed for bankruptcy during the last two years, including Corinthian Colleges, ITT Tech Services, Anthem College, and Dowling College. Bankruptcy will allow Globe to shut down operations in an orderly manner and ensure that its creditors are treated fairly and equitably.
If Globe/MSB files for bankruptcy, it will be required to list its assets. Those assets will likely include loans it made to its own students. Kyle McCarthy, writing for the Huffington Post in 2014, reported that 42 percent of Globe's students had private loans; and some of these loans were originated by Globe University, Minnesota School of Business, or Terry Myhre, the owner of Globe University.
Ironically, Globe University has easy access to the bankruptcy courts, where it will be able to shed some if not all of its debt, but Globe's students who file for bankruptcy will find it almost impossible to get relief. And this is true even though a judge found that Globe had committed fraud.
Why is this? Because private student loans issued by for-profit colleges, like federal student loans, cannot be discharged in bankruptcy unless the debtor can show that repaying the loans will cause "undue hardship," a tough standard to meet.
Obviously, this is a grave injustice. In my view, students who took out loans from for-profit colleges that committed fraud should have all their student loans automatically forgiven: federal loans, private loans, and loans issued by the college themselves.
References
Christopher Magan. Fraud ruling threatens Globe U, Minnesota School of Business with closure. Twin City Pioneer Press, September 8, 2016.
Judge Orders Globe University, Minnesota School of Business to Stop Fraudulent Marketing. KSTP Television News, September 10, 2016.
Kyle McCarthy. Globe University: Profiting Off the Backs of Students and Taxpayers. Huffington Post, January 23, 2014.
Shahlen Nasiripour. Corinthian Colleges Files for Bankruptcy. Huffington Post, May 5, 2015.
Andrew Skurria. Dowling College Files for Chapter 11 Bankruptcy. Wall Street Journal, November 29, 2016.
U.S. Department of Education. Globe University, Minnesota School of Business Denied Access to Federal Student Aid Dollars. U.S. Department of Education press release, December 6, 2016.
In October, the U.S. Department of Education ordered Globe to stop enrolling students, and this month, DOE cut off all federal student-aid funding to Globe. Globe cannot survive without federal student aid money, and it seems likely it will soon file for bankruptcy.
Bankruptcy is a good thing for failing colleges. In fact, several higher education institutions filed for bankruptcy during the last two years, including Corinthian Colleges, ITT Tech Services, Anthem College, and Dowling College. Bankruptcy will allow Globe to shut down operations in an orderly manner and ensure that its creditors are treated fairly and equitably.
If Globe/MSB files for bankruptcy, it will be required to list its assets. Those assets will likely include loans it made to its own students. Kyle McCarthy, writing for the Huffington Post in 2014, reported that 42 percent of Globe's students had private loans; and some of these loans were originated by Globe University, Minnesota School of Business, or Terry Myhre, the owner of Globe University.
Ironically, Globe University has easy access to the bankruptcy courts, where it will be able to shed some if not all of its debt, but Globe's students who file for bankruptcy will find it almost impossible to get relief. And this is true even though a judge found that Globe had committed fraud.
Why is this? Because private student loans issued by for-profit colleges, like federal student loans, cannot be discharged in bankruptcy unless the debtor can show that repaying the loans will cause "undue hardship," a tough standard to meet.
Obviously, this is a grave injustice. In my view, students who took out loans from for-profit colleges that committed fraud should have all their student loans automatically forgiven: federal loans, private loans, and loans issued by the college themselves.
Terry Myhre, the owner of Globe University, receiving an award from the Daughters of the American Revolution |
References
Christopher Magan. Fraud ruling threatens Globe U, Minnesota School of Business with closure. Twin City Pioneer Press, September 8, 2016.
Judge Orders Globe University, Minnesota School of Business to Stop Fraudulent Marketing. KSTP Television News, September 10, 2016.
Kyle McCarthy. Globe University: Profiting Off the Backs of Students and Taxpayers. Huffington Post, January 23, 2014.
Shahlen Nasiripour. Corinthian Colleges Files for Bankruptcy. Huffington Post, May 5, 2015.
Andrew Skurria. Dowling College Files for Chapter 11 Bankruptcy. Wall Street Journal, November 29, 2016.
U.S. Department of Education. Globe University, Minnesota School of Business Denied Access to Federal Student Aid Dollars. U.S. Department of Education press release, December 6, 2016.
Thursday, June 16, 2016
Small colleges and for-profits are closing at an accelerating rate: Do Not Resuscitate
Resuscitate: to bring (someone who is unconscious, not breathing, or close to death) back to a conscious or active state again.
Merriam-Webster Dictionary
Two sectors of the higher education are under extreme stress: for-profit institutions and small liberal arts colleges. In both sectors, schools are closing or downsizing at an accelerating rate.
In the last two weeks alone, Dowling College and St. Catharine College announced they are closing. Grace University, an interdenominational school in Nebraska, is raising tuition and cutting salaries to deal with financial problems; and for-profit Brown Mackie College announced that it is closing 22 of its 26 campuses over the next few years and will not accept any new students.
These failing colleges and universities are the educational equivalent of terminally ill patients. They see death approaching, but they deal with their mortality in different ways. Some failing colleges shut down in an orderly fashion and make arrangements for their current students to complete their programs at other institutions. Others refuse to accept the inevitable and search desperately for a survival strategy.
For example, Sweet Briar College in Virginia announced it was closing more than a year ago, but new leadership and some moneyed alumni rushed in to keep it open. But this year, Sweet Briar only enrolled 24 freshmen.
Likewise, although Dowling College announced its closure, it is now trying to partner with Global University Systems, "an educational investment firm" that has multiple partnerships with universities in England, Canada and the U.S. Personally, I can't see how this new relationship will have any bearing on Dowling's future.
In my view, all these faltering for-profits and struggling private colleges should close their doors with dignity once they have explored all reasonable strategies for remaining viable Most of them are on life support--existing from month to month on infusions of student-loan money. It is irresponsible for failing institutions to continue recruiting students when trustees and administrators know these students will be going into debt to obtain an education from a college that will be closing in the very near future.
References
Candice Ferette and John Hildebrtand. Dowling, still officially open, can award degrees over summer. Newsday, June 14, 2016. Accessible at http://www.newsday.com/long-island/education/dowling-still-officially-open-can-award-degrees-over-summer-1.11916403
Emily Nohr. Grace University will raise tuition, cut baseball and softball, reduce salaries to cope with financial problems. Omaha World-Herald, June 14, 2016. Accessble at http://www.omaha.com/news/education/grace-university-will-raise-tuition-cut-baseball-and-softball-reduce/article_499c0d2c-325d-11e6-84e8-17b1280538f5.html
Ashley A. Smith. Decreases in enrollment lead to Brown Mackie closing. Inside Higher Ed, June 15, 2016. Accessible at https://www.insidehighered.com/news/2016/06/15/decreases-enrollment-lead-brown-mackie-closing
Another Small Private Closes Its Doors. Inside Higher Ed, June 1, 2016. Accesible at https://www.insidehighered.com/quicktakes/2016/06/01/another-small-private-closes-its-doors-dowling-college?utm_source=Inside+Higher+Ed&utm_campaign=a0fafeb056-DNU20160601&utm_medium=email&utm_term=0_1fcbc04421-a0fafeb056-198564813
Paul Fain. The Department and St. Catharine. Inside Higher Ed, June 2, 2016. Accessible at https://www.insidehighered.com/news/2016/06/02/small-private-college-closes-blames-education-department-sanction?utm_source=Inside+Higher+Ed&utm_campaign=3d1c6eed79-DNU20160602&utm_medium=email&utm_term=0_1fcbc04421-3d1c6eed79-198565653
Rick Seltzer. Sweet Briar falls short of initial enrollment target, but leaders remain optimistic. Inside Higher Ed. May 5, 2016. Accessible at https://www.insidehighered.com/news/2016/05/05/sweet-briar-falls-short-initial-enrollment-target-leaders-remain-optimistic
Kellie Woodhouse. Closures to Triple. Inside Higher Education, September 28, 2015. Accessile at https://www.insidehighered.com/news/2015/09/28/moodys-predicts-college-closures-triple-2017
Paul Fain. The Department and St. Catharine. Inside Higher Ed, June 2, 2016. Accessible at https://www.insidehighered.com/news/2016/06/02/small-private-college-closes-blames-education-department-sanction?utm_source=Inside+Higher+Ed&utm_campaign=3d1c6eed79-DNU20160602&utm_medium=email&utm_term=0_1fcbc04421-3d1c6eed79-198565653
Rick Seltzer. Sweet Briar falls short of initial enrollment target, but leaders remain optimistic. Inside Higher Ed. May 5, 2016. Accessible at https://www.insidehighered.com/news/2016/05/05/sweet-briar-falls-short-initial-enrollment-target-leaders-remain-optimistic
Kellie Woodhouse. Closures to Triple. Inside Higher Education, September 28, 2015. Accessile at https://www.insidehighered.com/news/2015/09/28/moodys-predicts-college-closures-triple-2017
Lee Gardner. Where Does the Regional State University Go From Here? Partners 4 Affordable Excellence. May 22, 2016http://partners4edu.org/regional-state-university-go/
Thursday, June 2, 2016
St. Catharine College and Dowling College are closing: "After us, the deluge."
After us, the deluge. I care not what happens when I am dead and gone.
Marquise de Pompadour
Just this week, two small colleges announced they are closing: St. Catharine College, a Catholic institution in Kentucky; and Dowling College, a private school on Long Island.
Clearly, a lot of small private colleges are in trouble. Last autumn, Moody's Investor Service predicted a sharp increase in the number of college closures, forecasting that 15 would close in 2017. I think Moody's is far too optimistic. By 2017, I think we will see three or four colleges shutting down every month.
What's going on? Several things.
Small colleges have priced themselves out of their markets. First, many small non-elite colleges have priced themselves out of their markets. Tuition has been rising every year for the past 20 years, and even obscure little colleges now charge students from $30,000 to $35,000 a year, just for tuition. For years, students and their parents passively submitted to yearly tuition hikes; but no more. Mom and Pop aren't willing to pay $100,000 for Suzie or Johnny to get a bachelor's degree from an undistinguished private college.
It's true that small private colleges are heavily discounting their tuition--almost 50 percent for first-time freshmen. And it is true that students can take out student loans to pay for their college tuition. But families are not sure whether they will get a tuition discount big enough to fit their budgets or whether they are getting as good a discount as another family gets. They've lost trust in the integrity of the admission process.
And young people have finally begun reading the newspapers and are waking up to the fact that student-loan debt can be a financial death sentence for graduates who don't quickly find good jobs. They have become wary about enrolling at a little college named after a saint they've never heard of. Who in the hell is Saint Scholastica anyway?
Onerous federal regulations have raised operating costs. So price is a factor. But there is another reason why small colleges are closing. Federal regulation have become too onerous for small schools to manage. They simply cannot afford to comply with ever more burdensome regulations that spew out of the Department of Education. The Department's 2011 "Dear Colleague" letter on sexual harassment triggered a flurry of new college regulations, policies, and training programs to meet DOE's heightened standards for complying with Title IX. DOE's new transgender restroom rules will cost colleges money, and the rules will be a real headache for the little religious colleges that pride themselves on their traditional moral values.
Here's an example of how colleges are being subject to more and more federal regulation. Virginia Tech suffered a horrible tragedy when a deranged gunman massacred more than thirty students in 2007. The University was sued for negligence after the incident, but the Virginia Supreme Court ruled that Virginia Tech was not liable under Virginia tort law.
But the Department of Education concluded that Virginia Tech violated the Clery Act in the way it alerted students about an ongoing threat and assessed a fine against the University. The fine wasn't large compared to Virginia Tech's overall budget, but the University spent a lot of money defending against DOE's charge, and it will spend even more trying to make sure it does not run afoul of the Clery Act again.
Virginia Tech is big enough and rich enough to deal with DOE's mandates, but hundreds of small colleges don't have the resources for dealing with the ever growing complexity of the federal regulatory environment.
St. Catharine College is a case in point. It got squeezed by DOE, which held up its federal student aid money based on some technical issue. The college sued but apparently didn't get relief. This week it announced its closure, which it said was triggered by DOE sanctions.
Small liberal arts colleges are headed for extinction and there is no way to revive them. Small colleges have implemented all sorts of strategies to keep their enrollments up and maintain their revenues. Many have tried to reinvent themselves by hiring marketing firms to enhance their images and juice their enrollments.
By and large, this strategy has failed. Let's face it: hiring a marketing firm to design an edgy college logo or a catchy slogan is no remedy for the massive problems facing the nation's small liberal arts colleges.
I don't see any way to revive the small liberal arts college. Their tuition rates are too high, and offering heavy discounts has not lured middle class students into small-college classrooms.
Moreover, the Department of Education does not care whether it is regulating small colleges out of business. The DOE minions probably gave each other high fives when they heard St. Catherine is closing its doors.
Nor is there any way for colleges to walk away from their total dependence on federal student aid and the federal regulations that come with it. The colleges drank the Kool Aid of federal student-loan money, and their is no antidote.
If you are an administrator or a professor at a small college and you are nearing retirement, perhaps you don't care about the demise of liberal arts colleges. As Marquise de Pompadour put it: "After us the deluge. I care not what happens when I am dead and gone." But a young person with a new Ph.D. would be a fool to try to build a career by taking a job at a small liberal arts college.
What's going on? Several things.
Small colleges have priced themselves out of their markets. First, many small non-elite colleges have priced themselves out of their markets. Tuition has been rising every year for the past 20 years, and even obscure little colleges now charge students from $30,000 to $35,000 a year, just for tuition. For years, students and their parents passively submitted to yearly tuition hikes; but no more. Mom and Pop aren't willing to pay $100,000 for Suzie or Johnny to get a bachelor's degree from an undistinguished private college.
It's true that small private colleges are heavily discounting their tuition--almost 50 percent for first-time freshmen. And it is true that students can take out student loans to pay for their college tuition. But families are not sure whether they will get a tuition discount big enough to fit their budgets or whether they are getting as good a discount as another family gets. They've lost trust in the integrity of the admission process.
And young people have finally begun reading the newspapers and are waking up to the fact that student-loan debt can be a financial death sentence for graduates who don't quickly find good jobs. They have become wary about enrolling at a little college named after a saint they've never heard of. Who in the hell is Saint Scholastica anyway?
Onerous federal regulations have raised operating costs. So price is a factor. But there is another reason why small colleges are closing. Federal regulation have become too onerous for small schools to manage. They simply cannot afford to comply with ever more burdensome regulations that spew out of the Department of Education. The Department's 2011 "Dear Colleague" letter on sexual harassment triggered a flurry of new college regulations, policies, and training programs to meet DOE's heightened standards for complying with Title IX. DOE's new transgender restroom rules will cost colleges money, and the rules will be a real headache for the little religious colleges that pride themselves on their traditional moral values.
Here's an example of how colleges are being subject to more and more federal regulation. Virginia Tech suffered a horrible tragedy when a deranged gunman massacred more than thirty students in 2007. The University was sued for negligence after the incident, but the Virginia Supreme Court ruled that Virginia Tech was not liable under Virginia tort law.
But the Department of Education concluded that Virginia Tech violated the Clery Act in the way it alerted students about an ongoing threat and assessed a fine against the University. The fine wasn't large compared to Virginia Tech's overall budget, but the University spent a lot of money defending against DOE's charge, and it will spend even more trying to make sure it does not run afoul of the Clery Act again.
Virginia Tech is big enough and rich enough to deal with DOE's mandates, but hundreds of small colleges don't have the resources for dealing with the ever growing complexity of the federal regulatory environment.
St. Catharine College is a case in point. It got squeezed by DOE, which held up its federal student aid money based on some technical issue. The college sued but apparently didn't get relief. This week it announced its closure, which it said was triggered by DOE sanctions.
Small liberal arts colleges are headed for extinction and there is no way to revive them. Small colleges have implemented all sorts of strategies to keep their enrollments up and maintain their revenues. Many have tried to reinvent themselves by hiring marketing firms to enhance their images and juice their enrollments.
By and large, this strategy has failed. Let's face it: hiring a marketing firm to design an edgy college logo or a catchy slogan is no remedy for the massive problems facing the nation's small liberal arts colleges.
I don't see any way to revive the small liberal arts college. Their tuition rates are too high, and offering heavy discounts has not lured middle class students into small-college classrooms.
Moreover, the Department of Education does not care whether it is regulating small colleges out of business. The DOE minions probably gave each other high fives when they heard St. Catherine is closing its doors.
Nor is there any way for colleges to walk away from their total dependence on federal student aid and the federal regulations that come with it. The colleges drank the Kool Aid of federal student-loan money, and their is no antidote.
If you are an administrator or a professor at a small college and you are nearing retirement, perhaps you don't care about the demise of liberal arts colleges. As Marquise de Pompadour put it: "After us the deluge. I care not what happens when I am dead and gone." But a young person with a new Ph.D. would be a fool to try to build a career by taking a job at a small liberal arts college.
References
Another Small Private Closes Its Doors. Inside Higher Ed, June 1, 2016. Accesible at https://www.insidehighered.com/quicktakes/2016/06/01/another-small-private-closes-its-doors-dowling-college?utm_source=Inside+Higher+Ed&utm_campaign=a0fafeb056-DNU20160601&utm_medium=email&utm_term=0_1fcbc04421-a0fafeb056-198564813
Paul Fain. The Department and St. Catharine. Inside Higher Ed, June 2, 2016. Accessible at https://www.insidehighered.com/news/2016/06/02/small-private-college-closes-blames-education-department-sanction?utm_source=Inside+Higher+Ed&utm_campaign=3d1c6eed79-DNU20160602&utm_medium=email&utm_term=0_1fcbc04421-3d1c6eed79-198565653
Lyndsey Layton. Virginia Tech pays fine for failure to warn campus during 2007 massacre. Washington Post, April 16, 2014. https://www.washingtonpost.com/local/education/virginia-tech-pays-fine-for-failure-to-warn-during-massacre/2014/04/16/45fe051a-c5a6-11e3-8b9a-8e0977a24aeb_story.html
Kellie Woodhouse. Closures to Triple. Inside Higher Education, September 28, 2015. Accessile at https://www.insidehighered.com/news/2015/09/28/moodys-predicts-college-closures-triple-2017
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