http://www.chroniclet.com/Local-News/2017/10/18/Oberlin-College-faces-5-million-budget-deficit.html
There have been a lot of discussions about endowments and financial aid lately - this article highlights that even with a decent endowment, schools can face financial difficulties. It’s all about the operating budget.
Oberlin’s trajectory since its heyday in the 60s and 70s is very depressing. I still consider it one of the best LACs out there, but its stature has sure taken a hit. It used to be ranked among the top 10 LACs by USNWR but has steadily fallen over the years, to the point where it’s hovered in the mid-20s to low-30s over the past decade. I have to wonder what caused the decline. It can’t be a matter of its location, because Kenyon (also in rural-ish Ohio) has been rising through the ranks as Oberlin has been slipping. I’m asking sincerely if anyone has any thoughts on this. Is it the political atmosphere of the place? I mean, many schools go through cycles of popularity/unpopularity, but I’ve rarely seen a school as esteemed as Oberlin struggle so much to maintain its position.
@sheepskin00 Google “Oberlin controversies” and you will find perhaps a dozen reasons for its decline.
Something doesn’t ring quite true about the article: The president’s letter to the college body was dated in June, plenty of time to admit people from the waitlist. There’s no excuse for a college with ten applicants for every seat to run out of students. It also doesn’t define what is meant by a “deficit” in the budget. Technically, every college or university that dips into its endowment is running a deficit. Was the amount higher than usual? If so, what were the benchmarks? A very poorly written article, from a financial news viewpoint.
Despite these financial challenges, Oberlin continues to excel in what it has been known for over the years: turning out highly creative and original thinkers. Most recently,
https://www.oberlin.edu/news/rhiannon-giddens-%E2%80%9900-named-macarthur-fellow-2017
From a financial perspective, Oberlin gets less of a “return” on these grads than, say, Washington & Lee or Hamilton gets from their alums working on Wall Street. Oberlin at one time had one of the highest endowments of any college, funded by Alcoa and a well-heeled 19th and 20th century alumni. In the last 40 years or so, it has been somewhat eclipsed by schools with alumni networks more closely wired into the financial markets and corporate america.
At a $53,000 annual tuition, all it takes is 95 fewer students than projected to create a $5mm revenue shortfall, not counting lost revenues from room and board. I don’t know what Oberlin’s historical yield has been, but it was less than 29% for this entering class based on the article. We can safely assume the school had anticipated a higher yield as a lower number of enrollees was cited as a major reason for the deficit. I can’t believe they did not exhaust their waitlist if there was a shortfall in enrolled students. The article also mentioned a larger number of students not returning. Loss of tuition yields almost a dollar for dollar shortfall vs. budget as there are few costs you can immediately cut. So much of a college’s operating costs are fixed or semi-fixed (relatively few faculty/staff/workers you can immediately terminate, still have to keep all the lights on and facilities in repair). Loss of room fees also directly hits the bottom line as well as a good proportion of lost board fees (only save on buying less food, you still have to pay the staff who are probably union protected). So the article and Oberlin’s dilemma does not surprise me at all. There are so many smaller private schools that have failed or are in distress because they have seen big drop-offs in attendance and revenues. Oberlin’s clear challenge is raise its yield and retention rates. It should be easier to attract and/or retain 10 more students than find $500k in cost savings. In fact, injudicious cost cutting may lower yield – the dreaded death spiral.
But, how do you exhaust a waitlist of >1000 students?
@circuitrider Maybe the waitlist yield was lower than expected.
Will be interesting to look at the CDS when it comes out to see how much wait list and transfer activity there was.
Oberlin changed Presidents right? Maybe that is a factor somehow?
Seems impossible, but didn’t Ginnell recently encounter a similar situation (in principle, if not by exact math)?
Obviously, there had to be some screw-up in the admissions office. I assume that the students who did not show up, forfeited deposits, but the office should have been aware of the shortfall at least by early June so that they could have taken enough people off the waitlist to fill the gap. Maybe, they need to follow-up via email with the admitted students to make certain they will show up in the fall.
Oberlin has an endowment of over $750,000,000, and at one time had one of the largest endowments among liberal arts schools. Charles Martin Hall made a large bequest. Unfortunately, most graduates do not go into the hedge fund business where they can make big bucks to give to their alma mater. I think that love of Oberlin is high among its alumni, and if they could donate more, they would. It’s a great educational institution, and I think is underrated in the rankings.
It will get past this belt-tightening and the college might want to approach the alumni to give a little more to make up for the deficit . I think many of them would give for this reason. .
In response to sheepskin 00, I think the New Yorker article in May-June, 2016, did much damage to the college in the eyes of the public and potential applicants. It made it seem that only far leftists go there, when, in fact, it is more moderate. The endowment is not bad, but should be higher. The culture there is what is attractive. The faculty and students are friendly, and learning and intellectual accomplishment are what are valued there. It’s not a liberal arts college where students get drunk every weekend because there is nothing to do. There are plenty of things to get involved with there, the musical offerings of the conservatory being a large part. The town is pleasant and safe.
Re #1, as I understand it, in the beginning of the US News rankings, the rankings were based largely on peer surveys- opinions of academics. Academics loved Oberlin- lots of PhD production- and still do.
When other factors were introduced by US News, its rankings fell. Location probably affected some of these factors: eg. faculty salaries, admissions selectivity. (Not every Northeasterner wants to schlepp out to Ohio, sadly). The school’s portfolio of majors and student preferences likely affected another factor: alumni giving. In the beginning its class SATs outshone its admission rate, sort of like U Chicago. But eventually, as the rankings dropped, the average SATs fell into line as well. Rankings matter.
Then, starting with the Reagan era, the applicant population overall became more conservative, at the same time that the overall “baby-bust” admissions pool shrunk. This hurt Oberlin more than some others, and put it in a worse position than before when the demographics (and political climate, to an extent) improved again
That’s my compleletey uninformed guess about what happened.
^ That’s very much in line with my reading as a long-time Oberlin faculty member, monydad. Oberlin still has a higher percentage of academic-faculty children than any other college in the country. It’s still one of the most distinguished liberal arts institutions. Oberlin hasn’t changed in any fundamental way–what’s changed is the way USNWR calculates its rankings. Oberlin faculty salaries count quite heavily in the rankings, and they are quite a bit lower than at comparable institutions elsewhere; what USNWR doesn’t factor in is the fact that cost of living here is also quite a bit lower. And so on…
And here’s a bit of inside knowledge re the budget shortfall this year: the dip in enrolled students had largely to do, not with the College of Arts & Sciences, but with the Conservatory. We’re having trouble competing with the full-ride financial packages being offered by Julliard etc. Not sure what the solution is–but the speculation being thrown around above in this thread about the College’s waitlist is largely inaccurate, at least from what I have heard.
Dave 72, as a strictly outside observer, I see that the college and the conservatory have separate admissions offices, and may not have been coordinated enough to deal with the deficiency. If the conservatory is down 50, then this should have been communicated to the college admissions office, and they could have admitted an extra 50. I think the college could have dealt with another 50 students, and now empty dorm rooms could have been filled with those students. Do you agree?
Aside from just the operating deficit, a real problem that Oberlin faces with its admissions is that 63% of its acceptance offers last year were from its Early Decision pool. Imagine what its overall acceptance rate would have been otherwise. Forbes reported this figure in the following article linked here by Dave Berry:
Moody’s three days ago downgraded Oberlin’s current Aa3 bond rating from “stable” to “negative,” noting that it might downgrade the college to A1 if admissions/enrollment for the fall 2018 class is not strong.
An A1 rating is still strong, being the fifth-highest bond rating on a 21-step scale. If Oberlin drops to an A1 rating, that would put its bond risk on par with the likes of Haverford, Bates, Union and St. Olaf. This deserves watching.
See the following link to Moody’s downgrade:
https://www.moodys.com/research/Moodys-revises-Oberlin-Colleges-OH-outlook-to-negative-affirms-Aa3–PR_904253179?WT.mc_id=AM%7eRmluYW56ZW4ubmV0X1JTQl9SYXRpbmdzX05ld3NfTm9fVHJhbnNsYXRpb25z%7e20171024_PR_904253179
To give you some insight, maybe, I am helping two students choose colleges currently. Both come from academic families. In one family a parent is a professor at a highly acclaimed school. Both are from lefty lefty families. Both want smallish LACs. One is interested in creative writing.
In both instances, you’d think that Oberlin would make their lists. It did not. Not even their first rough-draft list. Nor did it make the list of a similar student who was applying last year. Why?
Because of the politics that seem to overwhelm the teaching. And the though of attending college with students like that. The article (NYT?) that talked about how Oberlin students were angry about how the food in the cafeteria wasn’t authentically ethnic enough left a horrid impression. You just felt sorry for the food workers who were trying to be inclusive. Also, I think, these three students are serious about moving forward in their educations and “changing the world” in a more nuanced way. They don’t want their education derailed by stupid protests. And Oberlin has been filled with stupid protests. Or at least that’s its reputation currently. A hotbed of in-your-face Lena Dunhamism.
If it makes people feel any better, Smith also fell short on one of these students’ lists because all of the political stuff there also “felt too mean”. And “you can say these things with kindness”, one student said staring at the HUUUUGE political banners hanging off of the buildings. That student chose Mt. Holyoke as the kinder option to apply ED to. The student from the previous year whose uncle has attended Oberlin in his day, chose Welleseley instead.
Mind you: these are politically active students on the lefty lefty portion of the spectrum.
The common data set for 2017 states that 728 freshmen enrolled this fall. 246, or just under 34%, of those were from the ED rounds. I’m not sure where the 63% number cited by Forbes came from, but the CDS doesn’t back it up.
In regards to the cultural appropriation issue in the cafeteria, our tour guide drily stated (in mid 2016) that “No, I don’t believe that serving sushi in the cafeteria is cultural appropriation.” That’s the last my daughter has heard of this supposedly burning campus issue. I think that —to @dave72’s point on another thread — the media blew this issue out of proportion.
My freshman is incredibly happy at Oberlin. She finds the academics challenging, and the community diverse and engaging. The only protest she’s witnessed was a string quartet trying to drown out a fire and brimstone style preacher in Tappan Square. Are there SJWs on campus? Yes. But, the student body — in her experience —is mostly left leaning nerds.
@dustyfeathers Maybe the families that you are working with should take a tour. They might be surprised by the difference between how Oberlin often gets portrayed in the media and the reality of life on campus today.
It wasn’t just the cafeteria issue that didn’t sit well with people, it was the student document with the list of ‘demands’ and threatened action if they were not met. It probably did get blown out of proportion as it made for a juicy media story, yet sometimes perception is reality, which may have happened here.