In 2009, Michael Thomas, President of the New England Board of Higher Education, warned in the Boston Globe about the “tough” years ahead for many small private colleges. “Some of these schools are going to have a status change: It may be closure, it may be a merger, or they may sell themselves to a for-profit institution,” he predicted. In fact, a number of small private institutions have been struggling for years—long before the recent recession and Thomas’ warning.
Some of the factors that have negatively impacted such private colleges have improved in recent months: Endowment income is up, the cost of borrowing money is down, and enrollments are being driven higher by the inability of public institutions to accommodate the demand for higher education. Still, life at many small colleges continues to be threatened: Technology is providing new ways for students to get degrees without being a resident on a campus, accrediting agencies are increasing their demands for evidence that students are learning, and the costs for operating an institution (such as utilities and benefits) continue to rise.
Any college not seriously contemplating how it will address such threats is living dangerously close to the edge. And even though every college is distinct and makes changes in its own way on its own timetable, board members and administrators can gain insights from the options chosen by those who have faced the future with courage.
For 25 years I worked with over 30 private colleges across central Appalachia as president of the Appalachian College Association (and its predecessor organization). During those years I watched as one of the colleges closed, another merged with the state system, and all struggled to maintain financial stability. In 2008, I began a study of four colleges across the country that had closed. The following year, I researched half a dozen institutions that had reinvented themselves to avoid having to close. That research of 2008–2009, along with relevant contributions from noted scholars, is included in my two recent books: Changing Course: Reinventing Colleges, Avoiding Closure and Cautionary Tales: Strategy Lessons from Struggling Colleges.
All the colleges I studied had long histories—most had existed for more than l00 years—and had served students who probably lacked the confidence or encouragement encouragement to go to a college far from their homes and the cultures in which they’d been raised. The faculty at the colleges studied provided the special attention and nurturing that insecure students need when having academic or other problems.
Yet all the good that those colleges accomplished was overshadowed by the problems created by the society around them and internal weaknesses. When accrediting agencies required assessment plans that conformed to national standards, the colleges often had no one in charge of institutional research with the training necessary to incorporate standardized testing into the curriculum, nor the funds to pay for the tests. When personnel matters required compliance with equal-employment policies, such institutions had no internal legal counsel to ensure those standards were met. When state funding was available for financial aid, the students most likely to benefit from a small, nurturing environment were driven to large public universities.
A Question of Reinvention
In my research, I found that colleges can reinvent themselves but the process can be challenging. Even at a college where the change seemed highly successful, the turnaround president was known as the devil who “destroyed the soul of the college” at the same time he was called the angel who “saved” its body. To increase the number of courses and students taught or advised, he eliminated tenure and discouraged faculty research. He also significantly reduced the size of the staff and demanded that those remaining assume multiple responsibilities. But, by increasing enrollment from fewer than 500 to more than 4,000 on campus and another 4,000 in off-campus programs, he eliminated a debt of over $l.5 million, maintained balanced budgets each year, raised an endowment that today totals roughly $l00 million, and paid cash to construct many new buildings and buy acres of land surrounding the campus.
From the time of his appointment as president in 1989 until his death in 2006, he transformed a college that was about to close into the fastest growing college in the state. And the success has been sustained by his successor, whom he groomed for the position. Today enrollment is about 10,000 on campus with roughly another 10,000 in off-campus programs, new buildings are completed every year, and budgets are balanced.
Colleges in search of a more prosperous and promising future may also consider merging with another institution. The results, however, are often less positive than those anticipated. One college that initially saw merger as salvation learned in less than two years that it can be just a step to closure. The large institution was happy to help the smaller one when it saw merging as a way to increase its own enrollment with a new population of students who might never have attended. But when the anticipated increases in enrollment failed to materialize and key administrators who had supported the merger left their positions, the large university simply sold the buildings and grounds of the private college. All that remained were the few faculty members who found positions at the large university.
In addition, while a cooperative arrangement between a for-profit institution, a small traditional college, and a city seems to have served all the parties well in one case, agreements made by for-profits that purchased campuses or programs were frequently ignored in the examples that I studied. For example, cooperative arrangements made by small colleges with for-profit educational entities often began with promises of continued employment for faculty members and administrators, but they ended with a new president being appointed from the for-profit company and a loss of employment for others who had been affiliated with the private college.
Closing with Grace
Some colleges conclude that they have only one option: to close. The college I studied that appears to have handled closing with the greatest measure of grace had a president who saw shortly after taking office that the institution no longer served the mission for which it was established: preparing young women to transfer to four-year colleges at a time when many of the top colleges and universities did not accept women until their junior year. But it took a decade for the president to get board members to admit that the college had outlived its original mission and that other colleges in the area were meeting the region’s educational needs.
Finally the president was able, with support from the board, to close the college with a sense of being in control of the decision. He was fortunate to have a boarding high school on the same campus, so he could increase the focus there as the college programs were phased out. The campus facilities remained intact, and most of the faculty members who chose to stay could work at the boarding school.
This astute president knew that when alumnae talked about continuing the college, they were talking about the college of the 1960s and the surrounding decades; he also knew that it was difficult to attract 21st-century students to the 20th-century campus. He did not try to save what he knew no longer served the purpose that had sustained it for over l00 years.
The major lesson I learned in my research was that it is not wise for an institution and its board to wait to consider closing until the choice is no longer theirs to make. Colleges that are struggling to survive should think about the possibility of closing at the same time that they are hoping and planning to expand. Once bankruptcy is imminent, a college may have no say over the time frame for closing, and it becomes increasingly difficult to determine the benefits that can be offered to faculty members, the way the institution can best meet the needs of students currently enrolled, and how concerns of alumni can be addressed.
Advice for Struggling Institutions
Indeed, the worst problems of the colleges I studied could be attributed primarily to the fact that the colleges’ leaders waited until the decision to change or close was no longer under their control. The decision was made by the church that stopped funding the college, the agency that denied accreditation, or the bank that refused to renew the loan. In such cases, even the trustees—as well as the administrators, faculty members, and students—lost the voice they might have had in determining the direction of the institution. While everyone may want to keep hoping for the economy to improve, the enrollment to increase, the endowment to grow, or the capital campaign to succeed, presidents and boards must consider the options a college will have if none of their planning and dreams are realized.
In general, boards and presidents seem to take two approaches during tough times. The first is to “hunker down,” and the second is to exhibit “decisive leadership” and go “full speed ahead.” I suggest some road in between the two—where decisions are based on careful scrutiny of all the options and the degree of risk involved in each one. Planning to transform, merge, or close a college at the same time that you hope to turn it around may seem counterproductive. But it is possible to think about the worst-case scenario, the most likely scenario, and the best-case scenario—and prepare the institution for each possibility.
Based on my research, including interviews with a number of people who have served at colleges experiencing difficulties, I also recommend the following—not only to board members and leaders of small, private colleges, but also to those at institutions of all sizes and types that are near the edge or faced with the possibility of closing:
- Remember that denial is not prevention. Be realistic in assessing your institution. Don’t look at it the way it was or you wish it to be.
- Don’t assume that just because your college survived similar threats in the past, it will survive a new one.
- A strategic plan that can be summed up in one word—hope—is not likely to lead to major improvement in the college’s circumstances. The strategic plan should provide specific actions that will lead to the achievement of goals, not simply broad statements (or wishes).
- As soon as you see continuing signs of decline—decreasing enrollments, unpaid vendors, increasing deferred maintenance, repeated losses in the endowment, and unbalanced budgets—consider the possibility that your college may have to change in some major way or close. Develop a plan for changing or closing.
- Involve everyone who will be affected by any decision to change or close in discussions about various options, but do not announce any decision until the board has approved one. Then announce the decision to all the constituencies of the college—the faculty and staff, students, alumni, and general public—on the same day.
- Prepare for the reaction from many people that, no matter how dire the circumstance, the college should never reinvent itself or close.
- While planning for the future, celebrate the past successes of the college—and encourage alumni and others to do so as well.
- If the institution must close, find a way to keep the mission alive at least in the minds of the alumni and others committed to that mission—even if it is just a scholarship fund or program that supports the kinds of students and disciplines that can no longer be a focus of the college.
As Parker Palmer said in his book Let Your Life Speak (Jossey-Bass, 1999), “By allowing something to die when its time is due, we create the conditions under which new life can emerge.” Neither changing in significant ways nor closing is easy for any college, but for some they are the only choices remaining. The important thing for boards and other institutional leaders is to control the change or closure so the new choices will be viewed as part of a natural evolution—and so the positive impact the college has had on its students and region throughout its history will not be diminished. Ideally, for each college closing, merging, or restructuring into a different type of institution, people will conclude, if not immediately, at least in future years, “It was the right thing to do at the time it was done.”
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