Becker College, a small private college in Worcester known for its video game design program, is quickly running low on cash and may not be able to remain open much longer, state higher education regulators warned on Tuesday.
The 1,500-student college has been struggling for several years, but the pandemic has deepened its financial woes, like many tuition-dependent schools with small endowments and shrinking enrollments.
In a statement, the Massachusetts Department of Higher Education said Becker’s financial situation has become “sufficiently uncertain” to threaten its long-term viability.
“The Department of Higher Education believes that the institution is unlikely to sustain full operations through the next academic year,” the statement read.
The state, along with the region’s higher education accrediting agency, is working with college officials to consider how to proceed, including the possibility of closing the school.
“The department is working closely with the college to engage in contingency closure planning in the event the institution decides not to sustain operations at or near current levels for the next academic year, and to ensure students will have opportunities to transfer to other institutions of higher education with minimal disruption to their education,” the department said.
Becker’s president, Nancy P. Crimmin, said the college has stopped recruiting activities although preregistration for classes continues.
Becker had been negotiating with a potential partner, but those talks ended in January, she said in a statement posted on the college’s website.
“I, along with cabinet members and appropriate staff, have been working to further analyze the financials, and to develop numerous scenarios regarding our operations,” Crimmin said. “The situation has been dynamic.”
Becker officials have also been in informal talks with the state’s public university system about potentially absorbing some of Becker’s students and programs, University of Massachusetts president Martin T. Meehan said.
In recent months, UMass officials have looked at whether students in good standing in certain Becker programs, such as veterinary technician training, could transfer to UMass Amherst and students in the well-known game design program could continue at UMass Dartmouth, Meehan said.
“We would be in a good position to take in Becker students,” Meehan said. “We’ve been preparing for this. There are many other colleges and universities in New England that are in a difficult position.”
Even before the pandemic, many small private colleges have struggled to remain financially viable, hindered by their high tuition costs and the declining number of college-age young people. The challenges posed by the pandemic pushed many such institutions to their limit and many have avoided closure largely because of federal pandemic relief packages.
Last year, Becker received $3.31 million from the first round of the federal Paycheck Protection Program, according to the federal government. It also received $1.6 million from the CARES Act.
Many students have taken a year off from school or been forced by family illness and economic turmoil to reconsider their college plans, further reducing enrollment. The pandemic has also forced institutions to spend significant sums to make their campuses safe.
“The higher education industry faces unprecedented disruption and colleges are going to close in the next three to five years and the closings are going to accelerate because of COVID,” Meehan said.
Like many small private colleges, Becker draws heavily from its region, with 83 percent of students hailing from New England. The school last year accepted 83 percent of its applicants. Its top three majors are interactive entertainment, nursing, and animal studies.
Becker’s endowment is a modest $4.4 million and has remained roughly that size over the past five years, according to the college’s most recent public financial statements in 2018. Without a sizable endowment to draw from, the college, like many of its counterparts, must rely on student tuition for nearly all its revenue, making unexpected changes in enrollment particularly disastrous. The financial statements illustrate that fragility, showing that the school’s expenses exceeded its revenue by roughly $250,000 in 2018.
Tuition plus room and board at Becker is around $53,000 per year, according to the school’s website, although nearly all students receive some amount of financial aid. Roughly 35 percent of students qualify for Pell grants, federal aid reserved for the neediest students.
Despite its shaky finances, the school’s top officials have continued to earn typical salaries for the industry. In 2018, Crimmin was paid $355,000 plus a $36,000 housing allowance. The school’s executive vice president and chief financial officer, David Ellis, received $369,000. The institution employs 200 professors and 200 staff members.
Deirdre Fernandes can be reached at firstname.lastname@example.org. Follow her on Twitter @fernandesglobe.