Showing posts with label declining college enrollments. Show all posts
Showing posts with label declining college enrollments. Show all posts

Monday, December 14, 2020

Small private colleges are going down: Don't get trapped under the rubble

 Inside Higher Education carried a story today about major cuts being made at three higher education institutions. Marquette University, a Jesuit institution, is laying off 225 faculty and staff members. The University of Evansville, a Methodist college, is eliminating 17 majors and three departments. The College of Saint. Rose, a Catholic school, is cutting 16 majors and six master's degrees.

These three colleges are not alone. All over the United States, small, private colleges are suffering from declining enrollments and declining revenues.  Many of them will close over the next couple of years.

The colleges blame demographic trends.  There are simply fewer traditional college-age people in the American population.  Consequently, fewer students are going to college.

The coronavirus pandemic didn't help matters. The COVID outbreak caused a lot of young people to postpone their college plans. And it imposed high costs on institutions that were left with empty dorm rooms this fall.

An overall decline in religion has sapped the vitality of schools that were founded by various churches.  The University of Evansville, for example, is affiliated with the United Methodist Church, but how many young people choose a college because it has ties with a religious denomination?

The small private schools have been fighting desperately to reverse their enrollment crops. They've rolled out new programs, spiffed up their study-abroad offerings, hired public relations firms, and slashed tuition. But for many--these survival strategies won't be enough. 

If you are a young person in the process of deciding where to go to college, here is my advice. Do not go to a small, private school with enrollment below 1,000 students.  The smaller colleges are the most vulnerable. 

You do not want to enroll at a college that closes before you obtain your degree or shortly after graduating.  You don't want to take out student loans to pay tuition at a school that is slashing programs and laying off faculty.  You certainly don't want your parents to take out a Parent Plus Loan so you can study at some obscure little school in the Midwest that won't prepare you for a good job.

In short, private liberal arts education is on the verge of collapse. Don't get trapped under the falling rubble.






Monday, November 16, 2020

Dead man walking: The small liberal arts colleges are in a death spiral

 Experts say that the Americans most at risk of dying from the coronavirus are elderly people with serious underlying health problems such as diabetes, obesity, and hypertension.

Something similar might be said about America's colleges. The schools most at risk of closing due to the COVID pandemic are small, private liberal-arts colleges that had severe financial problems even before the coronavirus forced most of them to close their campuses last spring. These are the little schools that were struggling with budget deficits and declining enrollments.

Common Application, an organization that processes a standard application form primarily for liberal arts schools, confirms this view.  So far this year, Common App received 8 percent fewer enrollment applications from first-year students than at the same time last year (as reported by Inside Higher Ed).

But some colleges suffered steeper declines than others. Colleges and universities in the Northeast and the Midwest, where the small liberal arts colleges are concentrated, suffered a 14 percent drop in applications. 

And small colleges lost more ground than big ones. First-year college applications were down the most among schools with fewer than one thousand students.  They also are seeing a 14 percent decline.

If next year's entering class drops by a corresponding rate, then a small college of 1000 students will enroll only 860 students, which would be an existential catastrophe.

But enrollments probably won't drop that much. Why? Because many colleges are lowering their standards to attract less qualified students---students who might have been rejected a few years ago.

Presently, a majority of colleges and universities do not require applicants to submit ACT or SAT scores.  They say they took this measure to offer more enrollment opportunities to first-generation and minority students.  

But I think they are lying. I think the colleges are abandoning standardized test scores to attract students who don't do well on those tests. By doing away with the ACT and SAT, the colleges can obscure that they are scraping the bottom of the academic barrel to get enough tuition-paying students to pay the light bill. 

Also, by giving applicants the option of not submitting a standardized test score, only people with good scores will provide them.  And this will cause the colleges' average test scores to go up--making them look better in the US News and World Report rankings.

In a way, American colleges in the age of  COVID are like the German Wehrmacht during World War II.  When the war began, Germany had plenty of healthy, young Aryan soldiers with blue eyes and blond hair--men who just couldn't wait to get their legs blown off in the service of the Thousand Year Reich.

But as the war wore on, millions of those ideal soldiers were killed in North Africa, the Western Front, or Russia.  The Soviets captured about three million Germans soldiers (mostly men but some women) and allowed them to starve to death.

By the time the Russians got to the suburbs of Berlin in 1945, most of those poster-perfect German soldiers were gone, and the Gestapo was rounding up young boys and old men to man the barricades.

Likewise, many small liberal arts colleges are willing to enroll just about anyone who can pay their tuition bill--whether or not the applicants are qualified under the admissions standards of yesteryear.  

Unfortunately, many of these unqualified students are taking out student loans that they will never pay off.  

In my view, many of these struggling little colleges should close their doors rather than stagger on for a few more years by signing up students who take out student loans for an educational experience that will do them very little good. 

Hey little guy, how would you like to get a bachelor's degree in gender studies?









Friday, November 13, 2020

Declining enrollments, a barrage of Title IX litigation and now COVID 19 lawsuits: Weak colleges will succumb to multiple woes

 How many times have we seen those nature programs showing thousands of wildebeests thundering across the African plains, trailed by hungry lions just waiting for a chance to pull down a sick or injured animal?

Many beleaguered American college presidents must feel like those wildebeests--desperately hoping to outrun the hungry lions of financial reality.

First of all, enrollments dropped precipitously at many colleges and universities over the past few years due to various reasons, including demographics. There just aren't as many college-aged individuals as there were a few years ago.  In Pennsylvania, for example, enrollments in the state's university system have dropped 20 percent in the last few years. 

Small, private colleges have suffered the most from this demographic downturn, which has forced some of them to close. Their situation hasn't been helped by a declining interest in the liberal arts and the humanities.  These little colleges' mission is to prepare students for adulthood by providing a sturdy liberal arts education. Now the kids don't want a degree in history or English.  They elect to become business majors.

Secondly, universities across the United States have been hit with a spate of lawsuits brought mostly by male students who were suspended or expelled for sexual misconduct.  These students have charged colleges with kicking them out of school without giving them a fair hearing, and several federal courts have responded sympathetically to that argument.  Quite a few of these cases have made it into the federal appellate courts.

In a 2018 scholarly article, Diane Heckman listed fifteen federal-court decisions in 2018 involving claims that a college mishandled its sexual assault hearings. Five of these opinions were at the federal appellate court level. I haven't seen the numbers, but I feel sure this litigation has accelerated. 

And then the coronavirus pandemic showed up.  The universities spent lots of money to keep their campuses safe, but a new COVID outbreak seems to break out every day at one college or another.

Students who test positive for the virus are being quarantined in their dorms, making them unhappy campers. After all, the whole point of going to college for many young people is to drink beer and party in the new hook-up culture.  Can't go out at the weekend?  That's a bummer, man.

Parents are understandably leery about putting their sons and daughters in a college dorm where they live cheek to jowl with peers who engage in risky behavior. Consequently, fewer students are choosing to live in the residence halls. This is a huge problem for the universities because they need dorm revenues to service their student housing debt.

And now the colleges have been hit with a tidal wave of class-action suits brought by students who want a refund or at least a partial refund for their spring tuition.  They argue, quite plausibly, that the quality of their education deteriorated when the universities closed their campuses last March and switched instruction from face-to-fact to an online format.

How many of these lawsuits have been filed? According to a law firm that keeps track of this litigation, students have filed more than 160 lawsuits demanding tuition refunds.  If a college loses one of these suits, it will be required to reimburse all its students for part of their spring tuition and fees--a crushing cost for most schools.  In fact, a court order requiring a college to give students their money back will likely be a death sentence for a small, private liberal arts school.

Hardly anyone saw the coronavirus coming, so no one can reasonably blame the universities if they failed to respond perfectly to the pandemic. We still don't know a lot about this plague, and the nation must steel itself for millions of more cases before a vaccine becomes widely available.

Nevertheless, many weak collegiate wildebeests will be dragged down over the next 12 to 18 months.  A few professors who believed they had lifetime job security will learn that they can be laid off if their employer experiences a genuine financial emergency. And those small-town businesspeople who depend on college students showing up every fall with their parents' credit cards will see their standard of living drop.  Those people, too, will find they have become the metaphorical equivalent of a weak and wounded ungulate running for its life from a pack of hungry lions.

References

Diane Heckman, The Proliferation of Title IX Collegiate Mishandling Cases Involving Sexual Misconduct Between 2016-2018: The March to the Federal Circuit Courts358 Education Law Reporter 697 (2018).







Friday, August 7, 2020

U.S. colleges are in big financial trouble, and it's their own damn fault

I doubt that many college presidents listen to country music, but perhaps they should.

Country music is full of lyrics about people getting in trouble because they made poor decisions. In Mama Tried, Merle Haggard admits he wouldn't be in jail if he had listened to his mother. And of course, there are hundreds of country songs about guys who lost their marriages because they hung out in honky-tonks with loose women.

American colleges and universities, like country-music singers, have made spectacular mistakes. But unlike the hillbilly bards, college leaders won't admit it.  They just raise tuition and go on wild building sprees. Now they can't pay their bills.

As Jon Marcus wrote for The Hechinger Report, higher education's bad choices left it dangerously vulnerable when the coronavirus pandemic became its black swan.  What did the universities do wrong?

First of all, colleges continued hiring faculty even though they were attracting fewer students. As Marcus pointed out, overall enrollment in American colleges and universities shrank by 12 percent since the last recession (2008-2009), while higher education increased the number of employees by five percent.

In particular, many colleges didn't decrease staffing levels for programs that were in decline. Fewer and fewer students choose education or liberal arts as their major. Still, many institutions did not reduce staff or eliminated majors even though the professors had fewer students to teach.

Second, Marcus correctly noted that the trustees at many universities abdicated their leadership role to be "boosters, cheerleaders, and donors."  Many college boards paid their presidents lavish salaries with overly generous benefits, bonuses, and hefty retirement packages.  For example, Penn State University and Michigan State paid departing presidents millions of dollars in golden-parachute money after they left their positions in the wake of explosive sexual-abuse scandals.

Rather than trimming their financial costs or operating more efficiently, most colleges responded to rising costs by raising tuition, forcing students to take out larger and larger student loans. As students reacted to sticker shock, the colleges switched tactics by offering huge tuition discounts of 50 percent or more to lure students into enrolling.  That didn't work out well for most higher education institutions.  Their tuition discounts didn't reverse their financial woes, and revenues continued to drop.

Now the coronavirus has become an expensive problem for colleges and universities. Many of them will close. But they can't blame COVID-19 for their misfortune. A lot of colleges were "dead men walking" even before the pandemic showed up as a black swan event.


Thursday, April 9, 2020

Things are falling apart for American higher education: It is time to be cautious about taking out student loans

Things are falling apart for many American colleges and universities. The signs of stress and turmoil are everywhere.

First, college enrollments are down significantly, putting an enormous strain on colleges that are heavily dependent on tuition revenue. Over the past decade, college enrollment dropped by more than 2 million students, dipping below 18 million students in the fall of 2019.

Second, the for-profit college industry is on the verge of collapse. According to Forbes, the number of for-profit institutions declined by 25 percent between 2010 and 2018, and total enrollment dropped by half.

Third, private nonprofit colleges are closing at an accelerating rate. An analysis in The Chronicle of Higher Education reported that more than 50 small private colleges have closed since 2016.  Already this year, MacMurray College and Nebraska Christian College have announced they are shutting down.  And Notre Dame de Namur University stated that it will not enroll a first-year class this fall. 

Fourth, small liberal arts colleges are slashing tuition for their first-year classes by 50 percent. Although most small colleges post a very high sticker price, in reality, they are giving out financial aid and scholarships like candy. As a result, the average net cost of tuition is only half the posted price.

Fifth, business schools and law schools have rolled out new types of graduate degrees to counteract declining enrollment.  Business schools have introduced one-year MBA degrees because the demand for traditional two-year programs has dropped. And law schools have started offering law-based degrees for people who do not intend to practice law. According to numbers released by the American Bar Association, 14 percent of law school students were in non-JD programs in 2018.

Sixth, the coronavirus crisis has caused some college students to feel less positively about their educational experience.  The COVID-19 pandemic forced the vast majority of colleges to cancel face-to-face classes this spring and replace them with online instruction.  Unfortunately, the quality of online teaching has often not been good.  A recent survey found that 63 percent of undergraduate respondents reported that the quality of their online instruction was "worse" or "a lot worse" than the live teaching they received before the pandemic.

More than 40 percent of the undergraduate respondents said that their view of their college had gotten worse as a result of COVID-19. And one out of 10 high school seniors who had intended to enroll in a 4-year college this fall said their plans will likely change. 

Seventh, student debt has doubled from $750 billion in 2010 to $.15 trillion in 2019. Today, 45 million Americans hold student loan debt.  More than one million people defaulted on their student loans last year. Almost 9 million more are shackled by long-term, income-based repayment plans that can last as long as 20 or 25 years. 

Conclusion: Students should do everything possible to avoid taking out student loans

For three decades, colleges and universities raised tuition on an annual basis at twice the national inflation rate. College students financed the rising cost of their education by taking out larger and larger student loans.

College leaders assured students they were getting good value for their tuition dollars. After all, they purred soothingly, salaries for college graduates vastly exceed the wages of people without college degrees. Taking out student loans to get a college degree seemed like a smart investment.

In fact, inflation-adjusted salaries for American workers have remained flat for the last 40 years. "[T]today's average hourly wage has just about the same purchasing power it did in 1978." The wage gap between college graduates and non-college graduates has widened, but this is mostly because wages for non-college graduates have declined.

In other words, a college degree may be a good investment for most Americans. Still, it may not be as good as the colleges have represented.  People who take on enormous student debt to get liberal arts degrees or graduate degrees will find that their college education was a terrible investment if they do not land a good job.

The coronavirus pandemic has put millions of Americans out of a job. Experts predict an unemployment rate of more than 30 percent—higher than during the Great Depression of the 1930s.  Forty million Americans may be out of a job by the end of this year.

Our economy will bounce back, but who knows when that will be? So if you are thinking about going to college or graduate school, let me give you a little advice:

Now is not the time to take out massive student loans to finance a bachelor's degree in gender studies from an expensive private college.

Now is not the time to finance a luxury apartment with your student loan checks.

And now is not the time to thoughtlessly take out loans to enroll in a master's degree program without a clear sense of how that program will increase your income. 

It is a terrible thing to be unemployed—as millions of Americans will soon be. But it is far worse to be unemployed and burdened with student loans that you will never be able to repay.