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Small schools sidestep Sweet Briar’s struggles

Colleges reset tuition, expand programs to withstand higher ed market pressures
University Business, May 2015
Seniors line up by Sweet Briar’s library prior to commencement. (Photo: Photo by Andrew Locascio/Sweet Briar College)
Seniors line up by Sweet Briar’s library prior to commencement. (Photo: Photo by Andrew Locascio/Sweet Briar College)

The wave of first-generation and low-income students now seeking higher ed access is placing unprecedented financial strain on the full spectrum of liberal arts institutions, says James F. Jones, the interim president of Sweet Briar College.

But while other higher ed leaders acknowledge this and other challenges, many say the shutting down this year of the 532-student Virginia women’s college does not signal doom for small institutions, including those that are single-sex, rural or religiously affiliated.

“What schools like Sweet Briar are doing is as important as the GI Bill was to those boys returning from the second World War,” says Jones. “(Sweet Briar) is opening doors to kids who never would have been able to go to school—but it can’t do it if 62 cents of every income dollar goes to financial aid.”

Sweet Briar’s closure has forced many presidents at smaller institutions to provide their boards with reports on their schools’ outlooks. They have reassessed enrollment, endowments, fundraising, operating budget and other key financial indicators, says Richard Ekman, president of the Council of Independent Colleges.

Many also have aggressively pursued new sources of revenue, including launching new programs and resetting tuition. “I don’t see Sweet Briar as the harbinger of all kinds of terrible things happening,” Ekman says. “You will find most presidents pretty calm and steady in the way in which they’re assessing the relevance of Sweet Briar’s experience to their own circumstances and most them are concluding they have challenges but are not in danger of closing.”

Costs of Sweet Briar’s “nurturing”model

A declining interest in single-sex institutions has been well-documented across higher education. Compounding that problem, says Jones, is that students who are still eager to attend a small institution, particularly a women’s college, have been seeking greater financial assistance over the past three decades.

“The people who are attracted to very small, very nurturing, residential liberal arts environments are coming from different kinds of socioeconomic backgrounds,” he says.

Sweet Briar legal challenge update

An attempt to block the closing of Sweet Briar College was denied in April by a judge ruling on a legal challenge brought by the Amherst (Va.) County attorney. The judge, however, granted the attorney’s request for a 60-day injunction against Sweet Briar paying for the shut down with any charitable funds raised for its general operations.

The county attorney, Ellen Bowyer, is expected to file an appeal and seek another injunction to keep the college from shutting down in August. Meanwhile, the group, Saving Sweet Briar Inc., continues to raise funds to keep the college open, and has received more than $5 million in pledges, according to its website.

Also in April, a small, separate group of graduates, students and parents filed its own lawsuit to prevent the college from closing, according to the Lynchburg News & Advance.

At Sweet Briar, 43 percent of the students are Pell Grant recipients and 37 percent are first-generation. To support these types of students beyond just Sweet Briar, the nation needs a second GI Bill similar to the legislation that funded college for millions of World War II veterans, Jones says.

But Sweet Briar had been struggling with market shifts for the last 20 years, Jones adds. In response, the college launched an engineering program, built a new athletic facility, and renovated classrooms, housing and a dining hall.

This year’s 154-student first-year class, however, was one of the smallest in years, and its yield was its lowest ever. “We had a huge influx of applicants; it’s just that the applicants did not turn into matriculants,” Jones says.

Ultimately, the college was forced to make deep tuition discounts that it could no longer sustain, with the discount rate reaching 62 percent for the current first-year class. Meanwhile, the number of students who stayed for all four years fell to 54 percent for 2013-14.

Before deciding to close, administrators spent several months exploring mergers with other institutions and also did a philanthropic survey to see how much money Sweet Briar might be able to fundraise, says Jones. “Every one of the indices went in the wrong direction.”

Critics have cited Sweet Briar’s much-publicized $85 million endowment as a reason the school should have stayed open. Jones says $65 million of those funds are restricted, and can’t be used for operations or salaries. The college could have remained open until the middle of the next fall term, but then would have had to shut down immediately without being able to help students transfer or possibly have any funds remaining to offer employee severance pay, he says.

The small, liberal arts model is “the most expensive model there is,” Jones says. “It’s not just the little jewels like Sweet Briar that are struggling. I think all of American higher education is in for a period of flux the likes of which we’ve never seen before.”

Successful tuition resets

While Jones says the #SaveSweetBriar campaign mounted by alumni has no chance of succeeding, there is precedent for a small women’s college remaining open after a board decision to close. Wilson College in Pennsylvania almost shut down in 1979 but was saved by a legal challenge mounted by alumni.

And this fall, Wilson, with 805 students, had its highest enrollment in 40 years. That benchmark came after the school made the tough decision in 2013 to begin admitting men, says Barbara Mistick, president since 2011.

“Wilson was seeing enrollment pressure, a lot of it driven by the single-gender limitation,” Mistick says. “We recognized that we needed to reimagine the institution.”

The process of going co-ed started with creating a commission to examine the process. It also took a lot of open discussions among the trustees, administrators, faculty, staff, students and alumni. “I believe if you don’t have a transparent process then you have the kind of reaction that you’re seeing at Sweet Briar,” Mistick said.

But going co-ed was just part of a wider plan to advance the college. Confronting the affordability question, Wilson dropped tuition by 17 percent and also launched the nation’s first debt buy-back program, Mistick says.

The school will buy back up to $10,000 of Stafford-loan debt from any student who maintains a certain grade-point average and graduates in four years.

Another women’s college that reset tuition is Converse College in South Carolina. Beginning last fall, the 1,200-student college’s sticker price dropped 43 percent—from $29,124 to $16,500. The result was a 15 percent increase in new students, President Betsy Fleming says. The number of undergraduate students has grown 24 percent in the past two years.

“Everyone wants to pigeonhole and make it about single-gender or religious or rural colleges,” Fleming says. “We find students may not be looking for single-gender but they are looking for the distinctiveness we offer, access to our academic programs and the outcomes we offer—and they really buy into our culture.”

Converse also has focused more closely on undergraduate student outcomes over the last few years. The school has looked less at what students say they might major in and more at employment opportunities and “what the world needs from college graduates,” Fleming says.

Converse plans to launch undergraduate degrees in health care administration and—building on one of its long-standing arts programs—contemporary music.

Sewanee: the University of the South, located in Tennessee, also reset tuition after newly appointed Vice Chancellor John McCardell in 2010 recognized gradual drops in enrollment and slight increases in discount rates. The school cut tuition by 10 percent and locks the price in for a student’s entire four years. Applications are up 50 percent and the discount rate is falling, though the 1,620-student school still awards some merit-based scholarships, McCardell says.

For the good of the nation, small schools must find ways to accommodate academically deserving students who need financial assistance, he adds. “The sense that there is a crisis among small liberal arts for financial reasons doesn’t seem borne out by the evidence. All of us are going to have to continue to take a good close look at how we allocate precious financial aid dollars, lest we see serious socioeconomic effects.”

ROI on diversity

Enrollment has been steadily increasing at Whittier College, a Los Angeles-area institution with a legacy of serving a diverse student body, including first-generation and low-income students. Sixty-one percent of Whittier’s students identify as people of color.

“We’re really a model for the student body that is going to be coming to college in the future,” says President Sharon Herzberger. “One of Whittier’s strengths and why we’re not experiencing the difficulties of some colleges is that we have, throughout our history, tried to be a college that was attractive to a very diverse student body.”

Whittier’s tuition discount rate has remained stable, even though the colleges provides substantial aid to attract economically diverse students. Recruitment and retention get big boosts from diversity, which extends to the faculty—where 27 percent identify as people of color, Herzberger says.

“Students who come to look at the school see students like them and they immediately feel more comfortable,” she says.

Over the last several years, Whittier has ratcheted up the supply of students by establishing strong relationships with community colleges in and outside the region. The college works with community college departments and faculty to identify talented students who might transfer to Whittier. “So many students who start out at community colleges think they are aiming to get into a UC or CSU school,” she says. “We have to tell them there is a private school world and you can go there.”

Supporting the core mission

The key to progress at Mary Baldwin College, another Virginia women’s institution, is buffeting the core residential, liberal arts mission with a range of other revenue-generating programs, says President Pamela Fox.

“It centers around constant cycles of innovation whereby we maintain the women-centered focus with the residential college,” Fox says. “We have protected and surrounded it with highly innovative projects that give us a mission-appropriate, diversified revenue stream.”

While the enrollment of the women’s college has remained stable at around 750 students, the college has expanded elsewhere. It launched a series of graduate programs in health sciences as a separate college last year and established its graduate education program as its own unit this year. While tuition discounting and financial aid remain necessary for the undergraduate programs, the graduate programs require very little price adjustment.

Manchester University in Indiana expanded its academic offerings with a College of Pharmacy in 2009, building a facility in Fort Wayne, which is 35 miles from its main campus. A $35 million gift from Lilly Endowment Inc. covered the facility’s construction as well as program start-up costs, says President Dave McFadden.

“We have a long tradition of sending graduates into health professions, so pharmacy was a natural,” McFadden says. “Our visibility and reputation in Fort Wayne and Northeast Indiana have skyrocketed and the secondary benefits have been tremendous.”

The revenue generated by the pharmacy program is committed to new initiatives and capital expenses, rather than to existing programs. “At the end of the day, our undergraduate programs need to continue to be financially healthy on their own,” McFadden says.

But it can be hard for administrators to predict how hard such major changes will be. “I’ve learned to anticipate how difficult a particular change will be and then double it,” he says. “There is certainly risk in what we are doing, but the more significant risk is not changing and starving your mission.

Matt Zalaznick is senior associate editor.

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