Can small colleges survive?

Cash crunches and enrollment challenges are taking a toll here and around the country.


It’s a peaceful time on Massachusetts college campuses. Prospective students tour excitedly, anxious parents in tow. Some incoming freshmen arrive for summer orientations. Faculty travel or do research in quiet labs and offices on lazy, leafy campuses of meticulously maintained red brick and ivy.

But the tranquillity belies continuing upheaval in higher education. An accreditors’ report has identified financial woes at Wheelock College in Boston. Gordon College in Wenham is preparing for layoffs as it faces a nearly $4 million budget shortfall over the next two years. And shortly after its commencement, Marian Court College in Swampscott announced that it would close. It joins 169 colleges and universities nationwide that have closed since 2000, nearly 70 of them private nonprofits.


Problems such as these are of particular concern in Massachusetts, which boasts a disproportionate number of the kind of private universities and colleges most at risk — and where higher education is one of the principal industries, along with financial services, biotechnology, and tourism, accounting for billions of dollars a year in direct and indirect spending. The state is known for its prestigious colleges and universities and is dependent on their graduates to supply an economy heavily reliant on well-educated and creative people.

Like leaders in the auto industry, the music business, and, for that matter, newspapers before them, college administrators are clearly starting to react to the many threats they face after years of stubbornly doing business largely as they always had. But now they can’t help but see the red ink on balance sheets.

Private nonprofit colleges with 3,000 or fewer students saw a 2.4 percent decline in enrollment this spring, according to the National Student Clearinghouse. Meanwhile, 12 Massachusetts colleges were among more than 300 nationwide that in May reported space remaining in their entering fall classes, including Dean, Springfield, and Wheaton. Doubtless far more also face enrollment challenges than answered that voluntary survey.


The bond-rating company Moody’s projects that enrollment pressures this year, coupled with higher expenses, will translate into the lowest revenue growth for four-year colleges in more than a decade. Among the hardest hit, Moody’s says, will be heavily tuition-dependent private colleges and universities that draw students from mostly within their own regions. Many institutions fit that description in this state, where figures show that schools are quietly becoming less selective to fill seats.

Colleges are clearly facing pressure from students and their parents, who are far more price-sensitive than in the past. But, as the critical report about Wheelock shows, they’re also up against tougher scrutiny from once little-noticed accreditation agencies, which are being pushed by Congress, the White House, and education reformers to do more than rubber-stamp the approvals colleges and universities need to keep collecting tens of billions of dollars in taxpayer-funded financial aid. The number of citations brought by accreditors against the colleges they monitor were up by about 50 percent between 2009 and 2011, Moody’s reported. But more needs to be done.

US Senate education committee chairman Lamar Alexander, a Republican from Tennessee, proposed at a hearing in June that accreditation reports on colleges more effectively measure quality and that more information be provided to students and their families. “It’s crucial that accrediting of our colleges improve,” he said.

Not all colleges and universities are in imminent danger. Harvard’s famous $42.8 billion endowment — nicely augmented in the past 10 months or so by two gifts totaling $750 million — and the $15.2 billion held by MIT are among the cushions largely protecting those schools from worrying too much. But they’re among the 10 wealthiest US universities that collectively hold a third of all the sector’s assets. Wheelock, by comparison, only has an endowment of about $54 million. And even that’s more than some other colleges around here.


Yet heavy taxpayer subsidies and sovereign and sometimes out-of-touch governing boards, among other things, have largely insulated these institutions from change. There are also competing vested interests inside campuses and a culture that dismisses or excuses problems or keeps them out of view.

Other schools have justified such things as high administrator salaries and unsustainable discounts on tuition by simply saying their competitors give them, too. (The president at Wheelock said the challenges there were no different than at many other places.) And when pushed to articulate what students and their families are getting for their huge investments in a higher education, former Indiana governor and now Purdue University president Mitch Daniels has griped, many just respond, “Take our word for it.”

Chronic financial problems and more competition for fewer students finally may be changing all of this. And that’s a good thing, not just because of colleges’ effect on the economy, but because of their place in their communities. After the planned shutdown of Sweet Briar College in Virginia made it the poster campus of dysfunction, its alumni came together and devised a rescue plan to keep it operating. (Students at Marian Court unsuccessfully tried something similar.)


Sweet Briar brought broader focus to how serious things have become. So have the examples of Wheelock and Marian Court. The world, for them, has irreversibly changed. The question is, when will the rest of higher education change in response.

More coverage:

Why some small colleges are in big trouble (April 14, 2013)

Wheelock College report finds financial, faculty woes

What is it like to be poor at an Ivy League school?

Everything counts in the campus visit

Nine Mass. colleges face federal scrutiny over financial aid

Jon Marcus is a Boston-based writer who covers higher education. Send comments to magazine@globe.com.

Due to a reporting error, an earlier version of this essay misidentified colleges that reported space remaining in their entering fall classes.