Higher Education

As small private colleges keep closing, some are fighting back

The first step to a survival strategy: acknowledging that there’s a problem

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small private colleges

Jared Maymon, a Nichols College junior and a student government vice president, has become convinced that Nichols will survive. He’s “okay to sleep at night, comfortable that I’m going to graduate. And kids after me are going to graduate.”

DUDLEY, Mass. — It was in his part-time job as a campus tour guide that Jared Maymon first heard prospective students and their parents asking not just about the food, the dorms or the required courses but about whether his college would be around long enough for them to experience any of those things.

Several other New England institutions had abruptly closed because of falling enrollments, growing debt and other problems. And Nichols College, where Maymon is a junior double-majoring in economics and finance, fit the same profile: small and with a comparatively low endowment and a student body drawn mostly from a few surrounding states.

“It was, like, 18 months ago, and I think [Mount Ida College, near Boston] closed — somewhere around there,” said Maymon, taking a break between classes in the Nichols student center. “And that’s when it kind of popped into my head and I was, like, ‘Oh, man, is this something that could happen to us?’ ”

He’s increasingly confident it won’t. In another of his roles here, as a vice president in student government, Maymon gets regular updates about the many solutions with which Nichols is experimenting as one of a few small private colleges publicly confronting a crisis that has shuttered one comparable institution after another.

It’s trying to increase enrollment, which has rebounded after a decline, according to publicly available and internal documents administrators made available. These also show that Nichols has reduced the number of dropouts, holding onto $5.4 million a year in tuition revenue it was previously losing. It’s saved more than $345,000 annually by streamlining some administrative tasks.

It’s expanding graduate programs and providing custom education for area businesses, increasing income from those sources by 46 percent. It’s reviewing staff positions to find any that aren’t needed, which may be eliminated as soon as this summer. It’s nearly doubled that endowment. And it’s begun a cost analysis of its smallest academic departments, with as few as 11 candidates for degrees apiece but as many as three full-time professors.

Related: The other victims when colleges decline or close: their hometowns

“It’s not panic time,” said Susan Engelkemeyer, a longtime business management professor and president of Nichols, which has about 1,200 full-time undergraduate and 235 graduate students. “We’re just trying to address the challenges we face.”

small private colleges

Susan Engelkemeyer, a former business professor and now president of Nichols College. “I talk to some of my colleagues that have structural deficits in the millions and they just say, ‘Well, we’ll be fine.’ Well, if you project that out, you won’t be fine.”

Surprisingly few such colleges are being so aggressive. When a fellow president told a higher education conference in January that her campus had already cut spending as much as it could — “to the bone . . . there’s nothing left to cut” — Engelkemeyer stood up and said she disagreed.

“I would suggest that there are very few schools that have done all that they can do,” she said in her office on the Nichols campus on a hill in rural Massachusetts near the border with Connecticut.

Colleges are closing or merging at an accelerating rate, according to the Moody’s bond-rating agency, from about eight per year between 2004 and 2014 to an estimated 20 per year moving forward, with small private colleges particularly vulnerable.

Yet “I talk to some of my colleagues that have structural deficits in the millions and they just say, ‘Well, we’ll be fine,’” Engelkemeyer said. “Well, if you project that out, you won’t be fine.”

Mount Ida, for example, whose most recent tax filings show it had annual revenues of $60 million, ran up more than $68 million of debt but continued to recruit applicants and agreed to a new contract with faculty just weeks before it closed, leaving 1,500 students in limbo and 280 full- and part-time employees without jobs.

Some 800 institutions face similar “critical strategic challenges” because they’re operated inefficiently or are very small, according to the consulting firm Parthenon-EY Education.

Despite their seemingly fast-increasing tuitions, colleges are giving discounts so steep that they are spending more than they take in, Moody’s reports. Many are desperate to fill seats; higher education institutions of all kinds had nearly 2.1 million fewer students this academic year than they did at the last enrollment peak, in 2011, thanks to an improving economy that is sucking more people straight into the workforce, and a decline in the number of 18- to 22-year olds that is steepest in the Northeast and Midwest.

This has most recently dragged down not only Mount Ida, but Wheelock College, in Boston, which merged with Boston University, and Newbury College, near Boston, which will close at the end of this semester. Hampshire College in Massachusetts won’t admit a full freshman class in the fall, and is looking for a merger partner; its president quit suddenly.

Three Vermont institutions also announced this year that they will close: Green Mountain and Southern Vermont colleges and the College of St. Joseph. So will Hiwassee College in Tennessee. And Wheeling Jesuit University in West Virginia has laid off more than a third of its full-time faculty.

Related: As they lose customers, universities try expanding the menu

Nichols and some other small private colleges are working to preempt that fate.

Nearly 20 have reduced their tuitions over the last three years, according to the National Association of Independent Colleges and Universities. That’s after a decade in which college tuition and fees rose 63 percent, or three times the rate of everything else tracked by the U.S. Bureau of Labor Statistics’ Consumer Price Index. Almost seven in 10 parents said in a survey that they had eliminated colleges from consideration for their children because of the cost.

Cutting the price is one way to compete for a dwindling supply of students. Other small four-year institutions are also negotiating deals with community colleges to smooth a path for transfers that many previously filled with obstacles.

Small colleges are also looking for new sources of revenue. If they have graduate divisions, they’re expanding them. To reduce costs, a few are cutting money-losing programs.

Liberal arts colleges, which have the extra burden of persuading students that they can get jobs when they graduate, are doubling down on professional development and adding high-demand programs; Hiram College in Ohio, for example, which by 2014 was deeply in debt, dropped majors including art history, music, philosophy and religion and added sport management and international studies in an approach it calls “the new liberal arts.”

Related: As students flock to credentials other than degrees, quality-control concerns grow

Dominican University in California has teamed up with a coding academy called the Make School to offer a minor in computer science; Make School students, in exchange, can get Dominican bachelor’s degrees in applied computer science.

“Those colleges and universities that survive are likely to be not the ones with the biggest endowments but the ones that are the most creative and … the most entrepreneurial,” said Brian Mitchell, the former president of Bucknell University and the author of “How to Run a College,” who is now a consultant to many struggling institutions.

Nichols has been doing some of all of these things, showing that there are still ways to improve efficiency in higher education, but also how — even on a campus where the process has been notably transparent — there can be opposition and anxiety

small private colleges

The Nichols College campus. Nichols is taking aggressive steps to preempt the problems that have forced a lengthening list of small New England colleges to shut down.

It has hired students instead of an outside vendor to staff its call center, saving $150,000 a year; combined financial aid into student financial services to save $50,000; moved digital marketing in house to save another $100,000; negotiated cheaper health insurance premiums; and increased the number of freshmen who return for sophomore year from a low of 62 percent in 2012 to 74 percent today. (The national average for private, nonprofit colleges is 82 percent.)

The college, which focuses on business, has survived hardship before. Founded in 1815, it closed altogether between 1909 and 1931 before reopening as a junior college for men, became a four-year school in 1958, decided to go co-ed in 1970 and started to add graduate programs in 1974. It ran up operating losses and went into debt in the late 1990s, a time when its enrollment dropped by 26 percent.

Related: Americans don’t realize state funding for higher ed is falling, new poll finds

Applications fell again in 2017, but have since recovered, and the college exceeded its enrollment goals this year. Financial documents show it now has a positive cash flow, with revenues exceeding expenses by nearly $5 million, though Engelkemeyer said more work is needed for Nichols to stay healthy.

She has opened the books to faculty and students, holding meetings with them complete with PowerPoint presentations in which she’s spoken frankly about the problems. “You have no doubt read or heard about the challenges facing private colleges,” she wrote in a blunt memo to the campus. “Nichols College is not immune to these issues.”

Some of that transparency has prompted pushback. Engelkemeyer conceded that it still takes time to change an academic culture that has enjoyed an almost uninterrupted supply of students since she started teaching in 1990.

“There were more students than there were seats,” Engelkemeyer said. “You could raise tuition 10 percent and nobody batted an eye.”

Faculty may have been slow to recognize that those days are over, but most do now, said Erika Smith, who teaches international business and political science — especially after Nichols hired one of the professors laid off from Mount Ida. “That becomes a very sort of personal experience as a colleague,” Smith said. “The more those things happen, the more the reality sort of sets in.”

Related: 10 years later, goal of getting more Americans through college is way behind schedule

small private colleges

Mark Naigles, head of the faculty senate at Nichols College, cautions that eliminating too much would make things worse. “If we get cut, then there’s fewer classes, and that’s the beginning of your downward spiral.”

Yet some faculty said they were under the impression that the college had completed its review of its smallest programs, which Engelkemeyer said will continue in the fall with an even closer look at the financial viability of small upper-level courses in some business concentrations and liberal arts majors.

Mark Naigles, head of the faculty senate, contended that cutting might make things worse.

“If we get cut, then there’s fewer classes, and that’s the beginning of your downward spiral,” said Naigles, an affable associate professor of math at Nichols who wears horn-rimmed glasses and “Star Trek” neckties. “So long as we can continue to do good for our students, I have a naive belief that that’s enough to succeed as an institution.”

The same approach has led faculty at Hampshire to propose adding more advising and a new curriculum focused on such topics as climate change and immigration — but lay off zero employees, even as enrollment declines from the current 1,100 to a projected 600 next year.

“The initial reaction, which is understandable, is always, ‘We need to try harder what we’re already doing,’ ” said Mary Marcy, president of Dominican and author of an upcoming book about the future of small private colleges called “The Small College Imperative.”

Picking away at the problems in what he called incremental ways, however, isn’t equal to the magnitude of the crisis, Mitchell said. “If in fact you’re practicing incrementalism, then you’re in real danger now and could be in grave danger shortly,” he said.

The no-cuts proposal by faculty at Hampshire also relies heavily on more alumni donations. But there may not be enough donors to keep all of these colleges afloat, if current trends hold true. While the amount of alumni giving went up in 2017, the last year for which the figure is available, the proportion of alumni who contribute has been falling and there’s more competition for their philanthropy, according to the analytics firm Hanover Research.

small private colleges

In addition to other enhancements, Nichols College, which specializes in business, has added a high-tech trading room.

Nichols’ alumni have been generous, donating $46 million that has allowed the college to build a new academic center with 360-degree whiteboards and large-screen TVs, add a high-tech trading room, expand the athletic facility and renovate the dining hall and dorms on its notably well-kept, red-brick campus without taking on substantial debt — unlike other colleges and universities, which Moody’s reports collectively owe a quarter of a trillion dollars and continue to take on debt at an accelerating rate.

Related: Switching majors is adding time and tuition to the already high cost of college

That fundraising also helped Nichols increase its endowment from $7.4 million in 2013 to $15.4 million now, though the figure is still among the lowest of its competitor schools. And it launched two new master’s degrees, including one in counterterrorism.

“Change is hard,” Engelkemeyer said. “We’ve shared the process. That doesn’t mean people like it.” Higher education, she said, is “very, very good at adding and we’re not very good at taking away.”

Colleges including Nichols are also making strategic additions. It hired seven new faculty this year in high-demand disciplines including sport management and accounting. “While we’re pruning we’re also adding.”

small private colleges

Erika Smith, who teaches international business and political science at Nichols, says faculty are watching the plight of other colleges that are struggling. “The more those things happen, the more the reality sort of sets in.”

But adding also means expanding program offerings without necessarily further enlarging the payroll, as might have happened in the past. The college’s vice president of academic affairs has told faculty that Nichols may add concentrations in marketing analytics and digital media, for example, using existing expertise.

Naigles is on board with that. “We have a great marketing team and we have a great math team that teaches certain business analytics so you can create a new program without having to spend extra money on new hires,” he said.

“So that’s really responding to the marketplace — the desires of students and families who are spending a boatload of money to come here.” (Published tuition, fees, room and board at Nichols come to $48,750, though discounts mean the average student pays $28,294.)

Back in the student center, Maymon gets ready to leave for his next class.

He’s “okay to sleep at night,” he said, “comfortable that I’m going to graduate” from Nichols.

Maymon paused. “And kids after me are going to graduate.”

A previous version of this story incorrectly stated Dominican University’s name. It is Dominican University, not Dominican College.

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