The American state of Massachusetts is now publicly preparing for more colleges to close.
This is clearly a response to a rash of local closings, including those of Mount Ida College and Newbury College. On a closely related level, Wheelock College merged with Boston University in a radical bid for survival, and Hampshire College has publicly called for a saving merger of its own. Appropriately, Boston started crafting policy responses last July.
Policy details so far:
The Massachusetts Board of Higher Education [is] voting to start working on recommendations including screening all private nonprofit colleges’ finances and warning students 18 months before a college is at risk of closing its doors.
State regulators hope to have a new system in place for the start of the semester in the fall of 2019. But the working group’s recommendations left several key details to be determined, including which entity would be responsible for the work of annually screening colleges’ financial condition, what score on a new financial metric would trigger closer state monitoring and how, specifically, the 18-month warning would be tripped.
What can we learn from this development?
As I said on Twitter, it’s important to realize that this is about campuses closing, and closing suddenly. It’s not about layoffs or queen sacrifices, but concerns colleges and universities reaching a terminal phase.
Note that this isn’t an attempt by the state to save colleges.
[S]tate Higher Education Commissioner Carlos Santiago in a telephone interview Monday. “The objective is not to stop closures. The objective is to serve students well.”
One observer emailed me to suggest that this policy work might backfire. For example, it could scare some students from enrolling in Massachusetts colleges. This won’t bother institutions with the highest endowments and reputations (think Harvard, MIT), but could easily tip a lower-ranked, smaller campus into deficit. Private donors might not feel confident in providing gifts. One local participant sees this as potentially a major issue:
Barbara Brittingham, president of the regional accrediting body New England Commission of Higher Education, is concerned that word would leak out if the state considers a school at risk of closing.
“That could lead to a self-fulfilling prophecy of distress or possibly even closure for institutions,” Brittingham said, arguing no school should be flagged on a single metric. “When our commission looks at financially-fragile institutions, it looks at a wide range of metrics, it looks at trends and it considers narrative analysis.”
Brittingham is calling for legislative action to ensure any state intervention remains confidential.
This decline of higher education institutions is likely to continue, as I’ve been forecasting. Local research agrees:
Twenty-four percent of private nonprofit four-year colleges in the state have seen enrollment decline by more than 10 percent between 2011 and 2016, a figure up from 8 percent of institutions from an earlier five-year period. The report also found that 34 percent of these schools saw expenses increase by 5 percent or more above revenues in 2016, compared to 2011.
Once again, demographics plays some role here. Recall Nathan Grawe’s projection of America’s traditional-age college population, and see how Massachusetts fares:
I am fascinated at how little attention this is getting. It may be, as some Inside Higher Ed commentators have suggested, that many interested people consider closing schools to deserve that fate. I am reminded of Jordan Weissmann’s infamous 2014 conclusion in a Slate column: “If the demise of a few schools can make the rest of higher ed a bit healthier, then let the death spiral whirl.”
Looking ahead, a few possibilities to consider:
- More Massachusetts institutions issue calls for mergers and/or emergency funds to stave off closure. As Michael Horn (a previous guest on the Future Trends Forum) put it, “It’s the beginning of a blood bath.”
- Other states consider such policies. They could take the form of stress tests.
- Private higher ed looks more fragile than public in certain areas – until states decide to close or consolidate their campuses. Alternatively, as Michael Horn suggests, we could see calls for state governments to adopt failing private campuses.
- Some private college and university leaders will seek to block states from rolling out such policies.
(thanks to the many people who have shared this story and their thoughts with me; photo by Michael Coughlan)