Another university to close

A small university in Nebraska will close, in yet another story about the American higher education crisis.

Grace University describes itself as “a premier Private Christian University in Omaha, Nebraska.”  The institutional website carries the official announcement:

Grace University will cease all academic operations at the end of the 2017-2018 academic year… We are confident that the decision was necessary at this time to ensure, to the extent possible, the successful completion of the current year and to provide sufficient time for the necessary transition planning for all those affected by the closure.

The human cost is immediate.  There are the students whose studies and careers are now skewed.  As for faculty and administration,

About 20 full-time faculty members, nearly 60 adjuncts and almost 40 staff members work for the university. No severance plan is in place at this time. Any severance will depend on how much cash is available at the end of the fiscal year…

Why did this happen?  Declining enrollment, as my loyal readers doubtless expect to learn.  From the announcement: “The economic difficulties Grace has encountered over the past several years were due mainly to declining enrollment while initiatives to grow enrollment were unsuccessful.”

Because they received the majority of their revenue from tuition.  Remember, “tuition-dependent” describes the supermajority of American colleges and universities.

From the Inside Higher Ed article:

Grace had been running substantial deficits in recent years. During the fiscal year ending in June 2015, it lost nearly $2.1 million on revenue of $11.4 million, according to its most recent publicly available federal tax form. The previous year, it lost almost $1.1 million on revenue of $12.3 million. In June 2016 it attempted to close deficits by slashing salaries by 10 percent while increasing tuition by 7 percent, cutting some scholarships for students and eliminating the baseball and softball teams.

Note the curricular aspect:

The market of prospective Grace students is declining, Bauhard said. The university’s strongest programs include teacher education and psychology but not many of the programs currently most in demand with students.

“We have no science, technology, engineering or math,” Bauhard said. “That, again, was a factor in why students would tell us they were not coming here.”

How many campus leaders will interpret this as a cautionary tale about what can befall a college that doesn’t make major curricular changes? or neglect STEM?

How many others will see the Grace story as being about scale?  Perhaps America can no longer support so many small campuses.

Read the rest of Rick Seltzer’s thoughtful article for even more grim details, including the steps taken over recent years, and strategic options considered.

(via Scott Robison)

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6 Responses to Another university to close

  1. Jay Collier says:

    Bryan, do you remember the futures market you started at NITLE? You were prescient in posing one question that was something like: How many U.S. American college campuses will close by 2025? Do you have a link to that site? What did we predict? It has been a long time coming, but we couldn’t have foreseen such a rapid change.

  2. Pingback: Another small American college will close | Bryan Alexander

  3. Todd says:

    “tuition-dependent” describes the supermajority of American colleges and universities. What does this mean? In the context of this closing it doesn’t seem relevant, but perhaps I don’t understand what is meant by “tuition-dependent.”

    • Good question, Todd.
      Tuition-dependent means that tuition revenue is the primary source of income.
      As opposed to a well funded public institution, for example, where the state would be primary. Or a school with a massive endowment, which typically has a mix of funding streams.

  4. Pingback: On the solstice, dark thoughts for 2018 | Bryan Alexander

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