A Holy Cross Vice President writes confidential email hinting that the college may close and mistakenly sends it to the entire student body: Oops!

Kelly Jordan, Vice President for Student Affairs at Holy Cross College in Indiana, sent a confidential email to a boarding school administrator last April, hinting that Holy Cross may soon be closing. Kelly told his correspondent that he might "spend the better part of the coming school year closing down the college."

Unfortunately for Vice President Jordan--and for Holy Cross, for that matter--Jordan's email was mistakenly sent out to the entire student body. Oops! The South Bend Tribune, a local newspaper, picked up the story; and now the whole world knows that the future of Holy Cross is in doubt.

Father David Tyson, interim president of Holy Cross, sent out the usual damage-control email message, assuring students that "I look forward to classes beginning in August and working with the faculty and students to create a bright future for the college that fully reflects the Holy Cross mission."

Note that Father Tyson did not contradict VP Jordan's message that Holy Cross might soon be shutting down.

Holy Cross is clearly in trouble. Its former president stepped down earlier this spring along with three of its five vice presidents. The college is quite small--only about 500 students; and the future of many small liberal arts colleges is uncertain.  Less than a year ago, two small Catholic colleges announced they were closing: St. Catharine College in Kentucky and St. Joseph's College in Indiana.

Most small liberal arts colleges depend heavily on tuition revenue, and a lot of them are having trouble attracting students. The National Association for College Admission Counseling recently published a list of colleges that still have room for incoming freshmen or transfer students in their fall 2017 classes. As of early this month, there were more than 500 colleges and universities on that list.  A majority of those schools were private liberal arts colleges with less than 5,000 students.  Seventy-seven of those schools had 1,000 students or less.

A lot of small liberal arts colleges are fighting to survive; and many will fail over the next two or three years. Holy Cross's recent embarrassment raises questions about how college administrators should deal with their own institutions' struggles.

Obviously, small-college administrators should do everything they can to attract new students and revenues. But there comes a time when college leaders need to ask themselves if they have a moral obligation to shut down rather than attract more new students into an institution that is on the road to closure.

If so, when should students and staff be told? I can't answer that question, but for Holy Cross the question is moot thanks to the fact that a confidential email message went public.

Photo credit: South Bend Tribune

References

College Openings Update: Options for Qualified Students. National Association for College Admission Counseling (n.d.).

Margaret Fosmoe. Holy Cross VP paints bleak future for college in emails mistakenly sent to students.  South Bend Tribune, May 6, 2017.

Scott Jaschik.  College Will Suspend Operations. Inside Higher ED, February 7, 2017.

Scott Jaschik. 350 Colleges Still Have Room for New Undergrads. Inside Higher ED, May 4, 2017.

Emily Tate. College VP Sends Email on Possible Closure. Inside Higher Ed, May 8, 2017.

763 colleges and schools closed last year, and most of their former students have student loan debt

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. 

St. Joseph's College is closing: Is the bell tolling for small liberal arts colleges?

St. Joseph's College, which was founded in 1889, is  shutting its doors in May. Officials cited several reasons for  closing: fierce competition for students, accreditation problems and increased federal regulation. St. Joseph's president, Robert Pastoor, said the college will need $100 million to reopen; and the college's friends and alumni are hoping to raise the funds.

Students organized a vote of no confidence against Pastoor and four other college leaders, but St. Joseph's decline and fall may not have been their fault. Small liberal arts colleges are in a precarious position all over the United States. The U.S. Department of Education has 500 colleges on its heightened-cash-monitoring watch list; and many of the schools on that list are small liberal arts colleges.

St. Joseph's, with only 900 students, just didn't have the resources to successfully navigate its way through rough financial waters. St. Catharine College, another small Catholic liberal arts college, announced it is closing less than a year ago. Like St. Joseph's, St. Catharine College cited increased federal regulation as one of the factors that brought it down.

By and large, the higher education community is made up of liberal Democrats; and almost no one protested the deluge of regulations that came out of the Department of Education during the Obama administration. Public universities, large private universities, and institutions with healthy endowment funds have been able to weather the tightening regulatory environment. Indeed, they have no choice. Virtually no college or university can survive without regular infusions of federal student aid money--and that money comes with regulatory strings attached.

Without question, many small liberal arts colleges are going to be squeezed out of existence over the next few years due to the same challenges that St. Joseph's and St. Catherine faced. Those that survive will have this profile:

• Tuition rates below their competition; 
• Strong academic programs that lead to good jobs such as jobs in medicine, health sciences, or criminal justice; 
• High teaching standards; and
• Endowment funds to buffer economic stress.

Many college and university leaders deplore the appointment of the new Secretary of Education, Betsy DeVos.  You can probably count DeVos's higher-education supporters on the fingers of one hand.

But maybe college leaders should give DeVos a chance to address the financial crisis in higher education before attacking her. If she acts sensibly to trim the thicket of federal regulation, it is quite possible that more small liberal arts colleges will survive.

And surely that would be a good thing.

References

Meredith Colias. Rensselaer stunned after announcement of St. Joseph's closure. Chicago Post-Tribune, February 10, 2016.

Alexandra Kruczek & Alexis Moberger. St. Joseph's College president will call it quits in May. WLFI.com, February 9, 2017.

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