<p>I was talking to an acquaintance discussing how colleges and universities are cutting their work force, budgeting student resources, and putting campus construction on hiatus. He brings up some interesting points. </p>
<p>Note: We live in Illinois. </p>
<li><p>Chances are many of the students will be looking at a state university (NIU, ISU, UIUC), making it harder to get into, when private colleges close.</p></li>
<li><p>If there aren’t enough admissions granted to meet student demand there will be clamoring for either expansion of an existing public university or building more of them. Lots of $ involved there.</p></li>
<li><p>If the student decides to attend an out-of-state school and their family currently lives instate there is a possibility that the family will move to _____ state in which the school is located. A student can commute to their new school, if possible, which means the state
that the student currently resides in will lose population and higher income level.</p></li>
<li><p>The up coming years will prove to be very interesting. Iowa could be the center of a real **** storm with 28 private colleges and only 3 state universities. Enrollment is 52/37 public. Not much room for students to transfer to.</p></li>
</ol>
<p>Small LACs with regional reputations have always been, and will remain, the smallest fish in a shark filled pond. In the current economic times, their ability to survive depends on the availability of financial aid. To the extent that they can provide finaid packages that at least somewhat narrow the gap between their tuition and the state school price, they will have a chance. But this will have to be done with grants; a package of loans that total $100K just won’t be competitive.</p>
<p>Applications are up at state schools already so competition for space has increased. If admissions lag, then here will be a call for more expansion, but only in those states with limited options. Here in Michigan there are countless options, Michigan, Michigan State, Eastern, Western, Northern and a host of smaller state schools. Admissions will get competitive, but students and their GCs will soon realize that they will have to “trickle-down” to in-state options they might not have considered in the past. </p>
<p>One thing that I firmly believe won’t happen is wholesale moving of families simply for the purpose of lower in-state tuitions in other states. Most states have a minimum residency requirement, some reaching up to 3 years, before you can get the full benefits of in-state tuition. Furthermore, people will need a job in their new state and will have to sell their home in their prior state; two currently very difficult things to accomplish.</p>
<p>My personal prediction is that the winner in this current situation will be the local community college. Students will get their basic requirements out of the way at a much lower tuition rate; after a couple of years they will attempt to transfer to larger schools, effectively cutting their total cost of an education dramatically. </p>
<p>None of this bodes well for the small regional LAC. But the answer isn’t binary. All of Iowa’s 28 LACs may not survive, but that’s not the same as saying all of them will fail. Some will combine with others; some will expand and yes, some will disappear.</p>
<p>I’m pretty sure I’ve made this point before on other threads, so I hope I’m not boring anyone…but I think that what’s happening in housing right now is what’s going to happen to colleges in the future. We have too many people going to college, many of them because of government subsidies. When that ends, I think we’ll see lots of colleges closing their doors.</p>
<p>Some may not survive the recession. If enough parents will not come up with the money, the schools are going to have problems. Colleges have closed their doors before.</p>
<p>I think some LACs will close, but those that do are the ones with weak academics. The stronger LACs will survive, if barely. It’s a sad thought to be honest. </p>
<p>I would bet some kids who are top students and do not choose the JUCO route would be rather disappointed in universities that weren’t even on their list of colleges. But if that does happen, masses of top students going to regional universities, will they be accommodated by their chosen university or will they make the honors programs fit their needs? Maybe this will force those that truly aren’t college material, those that wouldn’t have been accepted anywhere else, to leave college making space for those who are. Just my thoughts.</p>
<p>My daughter has been touring some small privates, where her stats are in the bottom 25%, as I’m betting she may actually have a chance. During a tour last week, I actually mentioned her stats to an admissions rep (daughter was ready to kill me, I’m sure), but the rep seemed encouraging. After returning home, she’s received a follow-up call and a follow-up letter from that school. The follow up letter had little messages from the admission rep, the dean of the college she’d toured, and one of the instructors she’d met.</p>
<p>Problem with parents moving to a state for college purposes- they have to think ahead so they will meet residency requirements of a least a year. Most importantly - they need a job. Regarding commuting- it is hard to find some jobs in the most desirable places to live (I can imagine the doctor/patient ratio in Madison, Wis if all physicians who liked the town could live there).</p>
<p>It varies. American U. spends under 1% of its smallish endowment each year. The total spending of endowmnet income was around $300,000. This year it will be $200,00 or so. There are no hiring freezes, no construction delays (funds for new construction are raised separately), no changes in financial aid, no cutting of faculty.</p>
<p>At Harvard and Princeton, and at lots of the prestige LACs with large endowments, the cuts are massive.</p>
<p>Perhaps, we will see tuition decreases and some creative ways to save money at some of these colleges rather than the simply a binary option of staying open or closing.</p>
<p>I can tell you what one small university is doing: $2 million in the budget for replacing dorm furniture is out, some remodeling projects are on hold, faculty raises may be tied to the number of students attending on a certain date, and there was talk of the President’s position becoming a half time/half paid contract. But there is money for 3 new Deans and the grounds have never looked lovelier.</p>
<p>Anyone know where we can see a list of college endowments for the first quarter or so of 2009 or for all of 2008 and what % of the endowment income is being spent?</p>
<p>You have to do your homework to get those numbers. The endowment spending rate (for FY ending June 2008) is more often than not stated in the management discussion attached to the year-end financial statement. If you follow a college closely, you can often find out the spending rate for this current fiscal year and, perhaps, even the max ceiling the school is contemplating for next year.</p>
<p>Most colleges and universities are just flat out lying about their endowment levels right now, ignoring the losses in private partnerships that aren’t typically re-valued mid-year. An honest college will include write-downs. I’ve only seen a few colleges being honest about this.</p>
<p>The issue of most pressing interest is liquidity and cash flow. The big boys are so deep into cash call commitments from private partnerships that they are, for all intents and purposes, unable to raise sufficient cash to cover operating expenses. Harvard, Yale, Princeton, and Amherst have all borrowed huge sums of taxable debt to cover operating expenses and cash calls. For such wealthy schools to be out of cash is the result of what can only be described as mismanagement of their endowments, with no regard whatsoever to liquidity.</p>
<p>BTW, the colleges that go out of business aren’t the schools mentioned on College Confidential. What puts a college out of business is not running out of money, but running out of students. Where there is enrollment, there is money to keep the doors open. When enrollment approaches zero, the doors close.</p>
<p>This year was nothing and the changes being announced for next year are only the tip of the iceberg. Colleges typically calculate endowment spending on 3- to 5-year trailing averages, so the budget cycle one out is going to be downright scary some places.</p>
<p>quote toledo, did you tell them you were full pay or something??? quote</p>
<p>When admissions began going over all the stats needed for varous scholarships was the point I mentioned d’s low stats, saying she probably wouldn’t qualify for anything, so I guess I was admitting she could be a full-pay candidate. But don’t you think most students in the bottom 25% are full-pay?</p>
<p>the answer to the op’s question is “too early to tell” It’ll
take a couple of years for the numbers to come out and
the trends indentified. It also depends on long the economic
downturn persists. And yes, the danger is that enrollment
will decline especially at lower tiered LAC’s. They may have
to abandon the current admission/cost strategies. How much
longer can some of these college continue to raise fees even 5%
a year.</p>