Saw this on the news. While these institutions could certainly have made better financial decisions, this seems like the start of a trend. The cost structure and the way we deliver higher ed in this country has some serious issues to address, sooner than later!
I agree with @Portercat that there are issues driving up the price of college that are absurd. Some are self-inflicted and some are forced by regulations. But colleges will also close because there are just more seats out there than there are students to fill them, and the smallest, least known are likely to suffer the most, especially if they are rural. Both of these border on rural, I guess.
Dowling spent about $18,302 per student, according to http://www.collegemeasures.org/4-year_colleges/institution/dowling-college-ny/scorecard/strategic-measures/ . But its probably was getting a net $11,000 in tuition per student after accounting for its discounting (financial aid) off its list price, based on the numbers at http://www.collegedata.com/cs/data/college/college_pg03_tmpl.jhtml?schoolId=860 .
For St. Catherine, cost was $16,686 ( http://www.collegemeasures.org/4-year_colleges/institution/college-of-st-catherine-mn/scorecard/strategic-measures/ ), but was probably getting a net tuition of around $2,000 ( http://www.collegedata.com/cs/data/college/college_pg03_tmpl.jhtml?schoolId=1792 ).
It is St. Catharine College in Kentucy that is closing-not St. Catherine in Minnesota.
Seems that there is very little information on St. Catherine (KY) on http://www.collegedata.com and none on http://www.collegemeasures.org .
I’m really surprised at Dowling.
https://www.insidehighered.com/news/2014/12/18/long-island-private-college-hopes-make-it-past-next-fall indicates that Dowling College had only a $2 million endowment in 2014. So any investment earnings from that would not be able to cover its operating losses.
St. Catharine took on a lot of debt
[QUOTE]
The debt stems from the construction of new facilities on campus, including residence halls, a health-sciences building and most recently a state-of-the-art library./QUOTE
This is for a college with an enrollment of 600 students. Must have taken on the financing just before the financial crisis, when anyone could get a loan. Of course, academia moves slowly, so the balloon just took a little longer to burst.
Dowling has been in trouble for a while. They too bet on new programs which never brought in enough students for them to stay afloat.
And then there is Burlington College in Vermont, which shut down 2 weeks ago.A land deal that they could not sustain brought that one down.
There is simply no reason for such schools to exist in the higher education marketplace.
Whew – I’d have been surprised if it were St. Kate’s in St. Paul.
So financial health of the institution should be considered in your college search. I’m sure folks wouldn’t want the resume to state (even if accredited), BA from “U of Went Out of Business”.
Some of the colleges that are closing have outdated curriculum. Some took on excessive debt (as described above). Some felt they needed fancy facilities to attract students, but the market could not support those debt payments. Some are in unpopular geographic locations, and have few students nearby who can afford private college tuition. Some private colleges may suffer if there are very good affordable public colleges nearby. Others may suffer because there are too many similar private colleges nearby. Others suffer because they are in crime-ridden neighborhoods.
I personally would like to see some of the stronger private colleges take over some of the weaker private colleges as branches. However, the weak colleges often wait until after they have lost most of their students and have deteriorated facilities before they look for a merger partner, and by that time, no one wants them.
Yes, it is valuable to look into the financial health of your prospective college. Sometimes you can find financial reports or bond credit ratings online from financial organizations such as Moody’s. Once, I saw a ratings agency publish A to F ratings for the financial stability of all colleges in the US. Even if your college doesn’t close, financial problems could cause layoffs of professors and elimination of your intended major.
The financial ratings agencies like to see a college turning away applicants. To them, it shows that the college could loosen its admissions standards in the future if needed for financial reasons.
In such an acquisition, the acquiring college would also have to handle the existing faculty, staff, and students. While there could be some situations where the acquired college may fit into an existing hole in the acquiring college (e.g. NYU’s acquisition of Polytechnic to be its engineering division, but NYU not having engineering before was because NYU sold its engineering division to Polytechnic decades ago), it is likely that many other cases would not.
Another question would be, would existing stronger private colleges need or want branches? There is the Emory / Oxford model, but it does not look like too many want to run their own feeder “community college”. Another model is to use the branch for non-traditional students and the like, but that may only work if the acquired campus were in a populated area. Also, many colleges run non-traditional student programs without needing a full campus away from the main campus (e.g. they rent space as needed).
It looks like Dowling tried to merge with another college but the deal fell through. I was surprised at Dowling because it ran its athletic teams like it was a financially strong school. The women’s lacrosse team finished ranked 7th and played a full travel schedule this year (trips to CT, Philly, and Florida). Men’s team has three All Americans on it and finished ranked 10th. Baseball team was in the playoffs. Other teams also were very competitive.
It is just surprising to me that the school was not acting like it was on its last legs. I wonder when the students and faculty was told?
I mapped St. Catharine to see if there were nearby colleges, and there’s a technical/community college down the road that offers “gen ed courses in partnership with St. Catharine College.” Wonder what’s going to happen there? Also, a highly regarded liberal arts school is about half an hour away.
There have been a couple cases where a nearby university bought a small nearby college because they wanted the college’s land and buildings. For instance, GWU bought a small college and made it a campus of their university. American U. bought a private boarding school and used it to build a new law school building. Unless the college that takes over the smaller college is required by state law to carry over union contracts, I believe they could get rid of whatever staff and programs they wanted.
There is an article that Dowling is still in negotiations, but also included that many nearby schools are helping the Dowling students - Molloy, Adelphi, LIU Post.
Post-2000 mergers of non-profit private colleges, from https://en.wikipedia.org/wiki/List_of_university_and_college_mergers_in_the_United_States
DePaul / Barat (2001)
Fordham / Marymount (2002)
Johnson / Florida Christian (2013)
Middlebury / Monterey Institute of International Studies (2010)
NYU / Polytechnic (2014)
St. John’s University / College of Insurance (2001)
Dowling’s enrollment dropped from 6,500 to 2,500 in about 10 years.