<p>The current economy makes me ask this question. This article suggests the question needs to be addressed.</p>
<p>Colleges</a> Flunk Economics Test as Harvard Model Destroys Budgets - Bloomberg.com</p>
<p>excellent article, thanks for posting</p>
<p>Was it Bradley College that closed? And Antioch is in trouble right now. Beloit is on shaky ground. That is something that should be considered. A school also may stay but cut something that your student values. Sports are on the chopping block as are some academic programs. Tulane dropped engineering, a mistake, I feel. Men’s sports have been endangered (other than the biggies ) for a while now.</p>
<p>Antioch is already closed.</p>
<p>That is a shame about Tulane, if true. Engineering is a very expensive school. Unlike lib arts, or business, they need the labs, not just profs and classrooms. I think the govt should provide more support to engineering students/schools. These kids are our future, and will help create jobs for all of us.</p>
<p>Do you think I made a good decision going to beloit? I love the school and it was really between that Knox and St. Olaf. St. Olaf didn’t really offer enough aid and while knox didn’t in there form, the adcom said I should definitely consider appealing when I told him Beloit gave more $$.</p>
<p>I really worried now…</p>
<p>Just to clarify - Tulane did not entirely drop engineering - only 2 programs within the department (civil and mechanical).</p>
<p>To quote:
The School of Science and Engineering offers the following programs leading to the Bachelor of Science (B.S.) degree. Each program gives students a solid foundation in math and science and a large component of humanities and social science in addition to program specific material. Every student is exposed to the latest developments in their fields and cutting-edge research facilities by faculty active in their research fields.</p>
<p>Biological Chemistry
Biomedical Engineering
Cell and Molecular Biology
Chemical Engineering
Chemistry
Ecology and Evolutionary Biology
Engineering Physics
Environmental Biology
Environmental Science
Geology
Mathematics
Neuroscience
Physics
Psychology</p>
<p>I thought the article was a bit sloppy and unfocused. It didn’t really offer much depth of analysis. But it did point to some warning signs. Colleges that are heavily tuition-driven—typically small liberal arts colleges with small endowments—are in deep trouble; they have no cushion to boost financial aid, and in difficult economic times students will be demanding a lot more financial aid (=tuition discounts), cutting deeply into their revenue. Fail to meet that demand and they lose enrollment, cutting deeply into their revenue. Either way, big problems.</p>
<p>Colleges that depend on tuition + endowments are in somewhat better shape, especially if they have room to tweak their endowment payout rates—despite the fact that endowment assets are down sharply. The exception here would be schools that invested heavily in big capital projects, banking on a rising (or at least steady) endowment. With a rising debt load, shrinking tuition revenues (net of FA), and smaller endowments, some may be in serious difficulty.</p>
<p>Public universities are a mixed bag. Those most heavily dependent on legislative appropriations in states facing large budget shortfalls are in big trouble. Others are in better shape, either because their state government don’t face such large deficits, or because the universities are less dependent on legislative appropriations. Some may actually benefit from an economy in which there’s a lot more demand for value-priced education, allowing them to be more selective and possibly to raise tuition, so long as they keep their substantially lower than their private competitors.</p>
<p>And then there are a small handful of super-wealthy privates that seem to prosper whichever way the economy is headed.</p>
<p>Within each of these broad categories, however, the financials will vary tremendously from school to school, so the categorical labels may misinform as much as they inform. Perhaps it’s time for a “stress test” of the financial condition of institutions of higher education?</p>
<p>Well that is good news about Tulane, but I hope they are able to put back civil and me (althought some of this may be what kids want)</p>
<p>I think colleges that take federal aid should be required to make their finainaical statements avialable. Parents should be able to look at to judge how financially stable the school is. I had to hunt on proprietary data bases my firm has to check credit rating of my Ds prospective school.</p>
<p>SmallColleges - don’t worry about your decision to attend Beloit. It has been around a long time, surviving the recession of the 80s and coming out better and stronger. </p>
<p>Beloit got attention on CC and elsewhere with it’s reported deficit and cuts but many other LACs have been badly hit as well, including Carleton. I don’t think anyone will worry if Carleton will be around in the future. Here is the link for Carleton (don’t know if I did this right).
[Carleton</a> may face $7M deficit on Northfield News](<a href=“Northfield News”>Northfield News)</p>
<p>bclintonk colleges that are tuition driven and still fill the seats will probably
be ok. Those who are spending 15% of endownment on operating costs are
going to face serious challenges. At 300 million that’s 45 million a year, buy
if that drops to 200 million 15% is only 30 millions -that’s a 15 million drop.
If that money has been used primarily for aid, especially aid for prospective
students, and is no longer there, the college will see significant decline in
admission numbers - a double whammy. I think for many smaller mid western
LACs that is going to be the case. It’s very risky and could well snowball.
Beloit’s in trouble and it’s only a small number who didn’t show - what if
a 100 students don’t show and word gets out.</p>
<p>No doubt many are in trouble right now - colleges as well as individuals. I’m not a huge fan of dire predictions myself though. </p>
<p>SmallColleges - I repeat - do not worry - Beloit and other small LACs will weather this storm. Beloit was founded in the 1840’s - it has been providing a fantastic education through worse economic times, including the Great Depression.</p>
<p>speedo - why do you feel only the midwestern LACs are in trouble?</p>
<p>The Tulane engineering program was a victim of Hurricane Katrina and not the financial crisis.</p>
<p>i think many smaller LACs will face difficulties but ones located
far away from major metropolitan areas may have more. It’s
a lot cheaper to send your kid to an LAC only a couple of hours
drive from the East Coast. Parents may downsize not only financially,
but in travel too. It’s the general “pulling back” thing.</p>
<p>SmallColleges- Beloit got attention because early on in the financial meltdown, it announced layoffs and retrenching, when other schools were just posturing. That is financial responsibility, not a sign that Beloit is in more trouble than other colleges of its type. As long as it fills up its freshman class, which it appears to be doing, it will be fine. Congratulations, you picked a great school!</p>
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<p>speedo, It’s a lot cheaper to send your kid to an LAC only a couple of hours drive from the East Coast if you live on the East Coast. People live in the Midwest too! There are cities and metropolitan areas in the Midwest! If a kid from New Jersey decides not to go to the Midwest, equally a kid from the Chicago area will decide not to go East.</p>
<p>I’ll guess we’ll see over the next couple of years. The key is
maintaining enrollment, and just how far colleges are willing to
go to do that. There’s only so many full payers you can discount
too.</p>
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<p>Sorry, but any college that’s been spending 15% of endowment on current operating expenses was already in a death spiral before the recent market downturn, and deserves to vanish from the face of this planet. I’ve never heard of such a thing. The usual target is something in the vicinity of 5% of endowment assets, calculated on a 3-year (or 5-year, or 7-year) moving average of the fair market values of the endowment. The reason for the averaging is to smooth out short-term market gyrations, and the longer the averaging period, the less short-term fluctuation. Any school that’s spending 15% of endowment is “eating the seed corn.” as our farmer ancestors would have put it; basically, looting the endowment to make ends meet in the short term. I refuse to believe any college president or Board of Trustees is that short-sighted.</p>
<p>American University just announced that they have a surplus that they will spending on expanding. Very unuusal for these times.</p>
<p>bclintonk read the article “the endowment provides 3% of its operating
budget compared with 15% at Wooster.” It also implies that Beloit spends
25%.</p>