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AMHERST — A drop in enrollment this fall has contributed to a $2.6 million budget deficit for Hampshire College, school officials say.

To cover the deficit, trustees are collectively donating $1.3 million, and Hampshire is leaving 15 positions unfilled from all areas, including the faculty ranks.

The enrollment decline hits particularly hard at Hampshire, which depends heavily on tuition for operating expenses. When school starts next week, the college expects to see 54 fewer students compared to last fall.

President Jonathan Lash attributes the dip — to 1,350 students — to several factors, including a change in admissions and financial aid strategies to become more selective and improve student-retention rates. Lash also said student protests last spring over racism and other issues prompted some accepted students to choose other colleges and some enrolled students to transfer.

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College officials say that increasing selectivity will attract more students who are better matches for the school's non-traditional approach, which places a higher value on independent thought than on tests, grades and other typical measures of student success.

Lash said trustees and school leaders are taking the financial challenges in stride because they predicted there could be lean years when the school shifted strategy.

Hampshire, a 51-year-old liberal arts school in the heart of the Pioneer Valley, has an operating budget of $56 million and endowment of $40 million — modest compared to many institutions of higher learning. That means even relatively small drops in enrollment can have a big impact on the school's finances.

In 2014, Hampshire stopped accepting SAT and ACT scores in admission decisions; previously the tests had been optional. Now, the school relies more on full high school transcripts, recommendations, and numerous essays added as part of the change.

Despite the budget deficit, Lash believes the shift in strategy was the right move for Hampshire. The fall 2015 entering class was indeed more selective than previous years. According to college data, the percentage of students Hampshire admitted went from 70 percent in 2014 to 63 percent in 2015. Lash said his goal is to get the school's admitted rate below 50 percent.

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"When it's over 70 percent, you're not really selective. Most people get in," he said. "We saw a change in quality of students pretty quickly."

Lash said an internal study suggested that the SAT and ACT were much less helpful than recommendations and essays in identifying students who make the best match at Hampshire.

"These are people who view their professors as partners. They don't like competing. They think grades are bogus. But they really want to dig deeply into ideas," he said.

Still, a decision to drop use of standardized tests can be risky because it means Hampshire is not included in the popular US News & World Report college rankings.

Psychology professor Neil Stillings has mixed feelings about the change, but for the most part believes it is a worthwhile experiment.

"Going test blind is an unambiguous statement that Hampshire welcomes any applicant who wants to take on the challenge of a Hampshire education," Stillings said.

Meanwhile the school has adopted a new financial aid strategy that awards money to students in greatest need rather than a general "discounting" of college costs.

By other measures, Hampshire's financial health appears to be stable. Fund-raising under Lash is up from roughly $5 million in 2011 to $13.1 million in 2016, according to the college.

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Higher education experts said it is not unusual for board members to step up and donate, as they did at Hampshire.

"Often trustees are the lead donors for a college, especially a small college," said Scott Carlson of the Chronicle of Higher Education, who often writes about college management and finance. "What might be unusual is if it is done under duress."


Laurie Loisel can be reached at laurieloisel@gmail.com.