http://earlham.edu/presidential-search/
https://www.chronicle.com/article/Questions-Swirl-as-Earlham/243821
Still looking for a permanent president and advertising to fill the role. Still no plan publically detailed to cut costs. Consistently loosing at football so cancelling next years season. Still lots of unknowns.
Cutting football is cutting costs.
Interesting, hope they find a able leader who will bring energy and ideas to campus.
I wish more of the small colleges/LACs would consider stopping the fielding of football teams, especially those with long histories of losing (e.g., the Maine NESCACs). The investment (football at many of these types of schools typically gets 50%+ of athletic expense budget) is difficult to justify, then when layering in all the new data re: health risks, it seems an easy decision. I know alums at each of these various schools might feel differently though!
Twoinandone - their budget deficit was $8mm last year (and at similar levels in recent years). They had promised a comprehensive plan to cut costs. While getting rid of the football team does likely reduce costs it doesnât come close to bridging the enormous gap.
Several year ago when Moodyâs ratings service dropped their ratings twice to Baa1, left them on outlook negative and ultimately withdrew the rating they cited Earlham need to attract more students in order to remain financially strong. Not sure if eliminating sports teams ultimately helps or hurts their ability to attract students, but over the short term probably a modest savings. You may have a lower alumni donor participation rate without football drawing alumni back to campus.
Regardless a comprehensive plan has still not been publicly disseminated, recent publications suggest the deficit spending continues and the lack of a permanent leader assuming the role leave many questions unanswered.
Anyone aware of any progress in rolling back their deficits or naming a permanent President?
Search committee is bringing 4 candidates to campus over the next few weeks, with a decision anticipated by spring and a summer start date. https://earlham.edu/news/article/?id=67374&r=40315
Board approved $4+ million budget cuts through a process consistent with the schoolâs Quaker values â building consensus and including faculty and students in the process. http://earlham.edu/news/article/?id=67322&r=40315
Also, appears that football was suspended for one year, not closed, as they evaluate financial, recruiting, and coaching prospects. http://earlham.edu/news/article/?id=67095&r=40315
Thanks for the update @Modwestmomofboys. I have looked at all the news available and while they highlight the cost cutting via personnel reductions they donât provide broader context into a financial plan that addresses their recurrent budget shortfalls and declining revenue.
Last year they reported, âEarlham College is expected to face a single-year budget deficit of about $13 million by the end of the 2018-19 fiscal yearâ
While the $4mm budget cap will narrow the $13 million operating deficit it wonât close it. A $9mm hole is enormous for an institution of this size. Have they managed to raise the income side or will they continue to be dipping into their endowment to support on going operations?
Previously reportedâŠâEarlham has operated at a budget deficit for the past several years, but the cumulative net loss jumped from about $5.5 million in the 2013 fiscal year to more than $47 million earlier this year.â
While these cost reductions may slow the degradation of their financial situation they donât serve as a long term solution in isolation. Will they operate at a deficit this year and if not how is that possible? Assuming they are still in deficit how much longer can they sustain this trajectory before making more meaningful cuts that will materially impact the student experience? Has income increased or have they continued to feel the need to lower net attendance costs to attract students (I suspect if good news we would hear)?
Did I miss some news? I dont have the answer but either Earlham does and doesnât want to share it or they donât have a solution. Either scenario is disconcerting.
The articles suggest to me that the Board is dealing with the financial future and that, with a new President to be selected and starting this summer, the long term plan will be forthcoming. If I were on that Board, I would be reluctant to take irreversible steps in shaping the institution without the participation of the about-to-be-hired President. It sounds like the Board is dealing with the immediate need to reduce the budget and is prepared to work with the new President. It also sounds like the Board and administration have been open with alumni about the current state of affairs.
âthe long term plan will be forthcomingâ.
I am anxious to see the long term plan given the complexity of the challenges and the fact that applicants are making decisions in the absence of certainty while deficit spending continues.
In terms of football - there are a number of issues for a school the size of Earlham to sponsor a team. One of them being safety, with a small team size. While the football question has not been settled (one year suspension), I donât think a student should choose Earlham if Football is an essential part of their choice.
For the financial aspects, a major change is to not invest in growth, and instead to maintain a budget consistent with the number of students that they have. I believe that they have some goals for the long term, including keeping small class sizes and bringing their discount rate a little closer to that of comparable schools. At this point, it is an exceptional educational value for the money that students (and their families) are paying.
^^Agreed on the football, @maffdad Many schools are having a difficult time not only paying the premiums, but finding an insurer even willing to underwrite a policy, especially those covering neurological issues. No surprise.
The NFL and Pop Warner have this issue tooâŠhttp://www.espn.com/espn/story/_/id/25776964/insurance-market-football-evaporating-causing-major-threat-nfl-pop-warner-colleges-espn
@maffdad. The Princeton Review seems to agree with you. Earlham was on their âbest valueâ list for being one of the top schools in the nation for when evaluating âReturn on Investmentâ for graduates.
@BB last year Earlham reported " âEarlham College is expected to face a single-year budget deficit of about $13 million by the end of the 2018-19 fiscal yearâ as part of a recurring and âunsustainableâ trend.
Have you seen any report of what that budget deficit will be for this fiscal year? Seems odd that it isnât disclosed when they are touting the cost savings without financial context.
Great value indeed but the issue is both short and long term sustainability. The value question strikes directly at this concern. Earlham does not receive in enough revenue (tuition) to compensate for the educational experience they are providing.
At some point something will need to change. Just wish they could articulate once and for all what those changes will be.
This article from July 2018 raises significant concerns and questionsâŠ
https://www.chronicle.com/article/Questions-Swirl-as-Earlham/243821
Of particular importance is a letter from Debbie Hull the Chair of the Earlham Board of Trustees. She states the Boards finding that:
âa reduction of expenses of $8mm is required. This action is intended to improve net cash flow which at present is not sustainableâ.
While the school is seeking praise for a $4mm reduction it is far short of the $8mm their own board says is required to be sustainable financially. The article and recommendations from the board suggest the need for other sweeping changes to respond to changing demands for liberal art schools, diminished enrollment, inability to generate student interest without reducing tuition, and the schools location.
Nothing Earlham has publicly disclosed suggests these questions have been resolved in a meaningful way.
My purpose in posting this level of detail is so that prospective students can review these unanswered questions and decide independently and knowledgeably if they are comfortable with the likely changes to take place per the Board of Trustees leter and the financial realities the school is facing.
I wonât debate with those that have an emotional tie to the school. I would however defer to those on the schools board whom have both the love of the school and the visibility on the schools finances. This is the group using the term unsustainable. Translation being the educational experience you can sign up for in 2019 will likely not be the one in place when you graduate in 2023.
Please read the link and the imbedded board letter, they speak for themselves.
Announcement about the new president
http://earlhamword.com/index.php/earlham-announces-first-ever-female-president/
Here is another link announcing the hire of the president. I provide an excerpt belowâŠ
https://www.google.com/amp/s/amp.pal-item.com/amp/2859931002
"Houtmanâs hiring comes at a critical time for the school. Earlham has operated at a budget deficit for the past several years, but the cumulative net loss jumped from about $5.5 million in the 2013 fiscal year to more than $47 million earlier this year.
In December, the collegeâs trustees approved a 12 percent reduction to the current $50 million budget. The cuts will take affect for the 2019-2020 academic year.
Earlhamâs enrollment over the past five years has been basically stagnant, but tuition revenues have steadily dropped over that period of time.
Like most colleges and universities around the country, the cost of higher education at Earlham has continued to rise. Tuition now is about $45,500 per year, not including room, board, a meal plan or other factors.
About 90 percent of the schoolâs students receive some form of financial aid. To make that happen, Earlham has made extensive use of restricted parts of its $437 million endowment (those parts earmarked for assisting students financially) as well as scholarship programs.
Overall, the schoolâs average expected revenue per student, based on their tuition contributions, is now about $12,000 per year, down from about $14,200 five years ago."
I wish her luck in solving this unsustainable situation.
âOverall, the schoolâs average expected revenue per student, based on their tuition contributions, is now about $12,000 per year, down from about $14,200 five years ago.â
How are these numbers calculated? Where would one find similar numbers for other schools?
Do you think they are in a worse position than some of their peer institutions?
It seems like quite a dilemma to solve while balancing demands of students, faculty and alumni.
This issue as well âFootball Fallout: Decision to Suspend Program Has Hurt Finances and Enrollmentâ
http://earlhamword.com/index.php/football-fallout-decision-to-suspend-program-has-hurt-finances-and-enrollment/
@blue1516 I would suggest you read the âDo not attend Earlham collegeâ thread from some time back. I outlined the concerns pieced together using newspaper releases and the credit reviews from Moodyâs and SP.
The school had and has not released much publicly with the exception of the previous President of the Board of Trustees letter of concern. I quote it previously. It can also be found online.
The reality is if your operating deficit is going up annually so that you are drawing on your endowment, and your revenue per student is going down you either need to dramatically reduce costs and or attract significantly more students. The school recently spent a $100mm to improve campus infrastructure and attract students but enrollment continues to stay relatively flat (no idea if admissions standards have been maintained). So this year they cut about $5mm from their expenditures which is great but still leaves an $8mm deficit. You canât keep spending money out of an endowment at rates greater then it is being replenished and stay viable long term.
So what to do⊠I have anxiously awaited the answer to no avail. Unfortunately most options will have an adverse impact on students or worse if no action is taken.
Once again anyone know, other than itâs a great school mantra?
Iâm not an alumnus, parent or student. Looked at it for my D.
Am curious about how to evaluate schools on this data point which is why I asked about the revenue.
âOverall, the schoolâs average expected revenue per student, based on their tuition contributions, is now about $12,000 per year, down from about $14,200 five years ago.â
Does one google a school name and âaverage expected revenue per studentâ or does Forbes or someone make a list?
^^You can get net tuition revenues (usually separated out from other revs) from the schoolâs financial statements and do the math (divide by number of students). You just have to make sure you are looking at net tuition revenues, after financial aid.