UPDATED: Burlington College to close as result of ‘crushing’ debt

Burlington College

Carol Moore, president of Burlington College, left, and Coralee Holm, dean of operations and advancement, attend a news conference Monday where they discussed the school’s impending closure. Photo by Elizabeth Hewitt/VTDigger

(Editor’s note: This story was updated and expanded May 16 at 7 p.m.)

BURLINGTON — Burlington College officials announced Monday that the school will close effective May 27 because of the “crushing weight of the debt” incurred with the purchase of a lakefront property on North Avenue.

College trustees voted unanimously Friday — the day before commencement — to close the school.

At a news conference Monday afternoon, college officials described the news as “heartbreaking” and lamented the loss of the model of education that the small institution offered through its 44 years.

“It’s particularly difficult to see this come to an end when in fact this is the cutting edge of higher education,” said college President Carol Moore.

“These students that were served here, it’s going to be very difficult to find another perfect spot like Burlington College for some of these folks,” said Coralee Holm, dean of operations and advancement.

Burlington College

Burlington College held its commencement Saturday. Photo by Elizabeth Hewitt/VTDigger

Fifty-five students graduated this weekend — including Fatuma Bolle, who received her degree in international relations after four years at the college. Standing in the campus parking lot Monday afternoon, she said she had not previously heard about the closure.

Bolle, a Somalian refugee who arrived in Burlington in 2004, said she had looked at pursuing her degree at the University of Vermont or Champlain College. “But it didn’t fit me because I was a single mother and I couldn’t make it coming every day to that school and working,” she said.

Burlington College, with its flexibility around schedules and its small class sizes, was a perfect fit for her, she said. The college offered English classes for non-native speakers and became like a second home for her son, now 7.

“We had a lot of support here,” Bolle said.

Financial difficulties have plagued the college for years. According to college officials, the institution had paid off the bulk of the $11 million owed for the purchase of the property it sits on from the Roman Catholic Diocese of Burlington. But the college is still $3 million in debt.

The school received word Monday that the New England Association of Schools and Colleges will not renew its accreditation, according to Moore.

The college has been on probation with the accrediting agency since July 2014 after concerns emerged about its deteriorating finances. The U.S. Department of Education allows a college two years of probation.

The school’s declining enrollment was still a “major risk” to its long-term viability, according to the NEASC. Enrollment dropped from 186 full-time students in the fall of 2014 to 123 a year later. Burlington College had a plan to increase enrollment to 215 by the fall of 2018, and 165 students were expected to enroll next fall.

As part of an effort to boost enrollment, the college reduced tuition, but it wasn’t enough to save the school.

In mid-April, Moore and other college officials went before the NEASC to make the case for accreditation, but their plea was unsuccessful. They said the accreditation will be lifted as of January 2017.

The three-page letter from NEASC the college received Monday explained that the decision was driven by the institution’s financial situation, according to Moore. The letter will be made public after the decision has been finalized, which could be up to two months out, she said.

Dr. Barbara Brittingham, president of NEASC, said the commission considered the evidence provided by Moore and determined that after two years of probation the college didn’t meet financial standards. Institutions must have sufficient finances to sustain the quality of educational programs and demonstrate the financial capacity to graduate an entering class, according to NEASC’s “Standards for Accreditation.” Schools that are not accredited are not eligible for federal financial aid for students.

Financial woes were compounded in April, when Burlington College failed to renew a $750,000 to $1 million line of credit with People’s United Bank, according to Tom Torti, one of the college trustees. The school owed People’s United Bank roughly $3 million.

According to Holm, when cash flow slowed between semesters, “it was critical for the college to be able to operate to have that line of credit.”

Holm and Moore said Monday they did not know the specific reasons behind People’s United Bank’s decision not to renew the line of credit, commenting simply that the bank did not “feel it was prudent for them.”

“We’re not privy to those kinds of decisions,” Moore said. “Those are bank decisions.”

Moore said college officials had looked into other contingency plans for trying to remain operational.

“This is a great loss to the higher ed community, and so we did explore many other options,” Moore said. “But in the final analysis none of them came through.”

College trustee Tom Torti said the financial situation was a “fairly straight line proposition.” The trustees believed that if they could maintain their line of credit through September they could have kept the school going.

“We ran out of the ability to pull more financial rabbits out of the hat,” Torti said. “To come as close as we did to solve the riddle and fail is a bitter pill.”

Burlington College has established agreements with several other institutions — including the Vermont State Colleges system, Marlboro College and Champlain College — to set up contingency plans for current students. It is also exploring options with Green Mountain College in Poultney, she said.

Some 70 students are part of the way through their academic programs, according to Moore. Those students’ advisers will be reaching out to them over the next few days to help them transfer to the schools of their choice. Some of those institutions have agreed to maintain Burlington College’s tuition rate for students they absorb.

Some 30 students had already submitted deposits to reserve their place at the college to begin in the fall. Those students will also be able to take up their studies at the institutions with which Burlington College has agreements.

Meanwhile, the decision will leave almost 30 staff and faculty members without employment.

Moore said the college is trying to support faculty members to find placements at other higher education institutions. The Department of Labor will be coming in to help get staff signed up for unemployment benefits and other support services.

Burlington College President Jane O’Meara Sanders. Photo courtesy of Burlington College.

Former Burlington College President Jane O’Meara Sanders. File photo courtesy of Burlington College

Burlington College, under the leadership of former President Jane Sanders, the wife of Sen. Bernie Sanders, bought for $10 million the former headquarters of the Roman Catholic Diocese of Burlington in 2010 as part of an expansion plan. The purchase was made with $6 million in bank debt and a $3.5 million loan from the diocese. The college never collected many of the pledges made under Sanders’ tenure that were used as collateral for the deal, and ultimately, the diocese lost about $2 million in the deal. Sanders left the school in 2011 under a cloud and with a $200,000 buyout package.

Moore would not comment on Jane Sanders’ involvement in the college’s history at Monday’s news conference.

Torti says the real problem was student enrollments.

“People ask was it the purchase of the land and the building that doomed the college,” Torti said. “I’m a believer that people make those decisions with the best of intentions, in the best interest of the school. No one is making money off that deal.”

In 2014, the financial situation at Burlington College came to a head. An audit showed that the college failed to collect pledges to pay for the purchase of the diocese. The school was highly dependent on tuition to pay for operating expenses, and enrollment levels fell. As a stopgap, the college used scholarship money and retirement funds to continue operating. Not long after VTDigger reported on the college’s financial situation, President Christine Plunkett resigned. A group of concerned Burlington residents then stepped in to try to rescue the college.

Part of that rescue plan included the sale of much of the Burlington College campus. Developer Eric Farrell purchased 27 acres of the North Avenue property for $9 million and plans to build more than 700 housing units on the lakefront property. The city of Burlington bought 12 acres from Farrell for a public park along the lake for $2 million.

According to college officials, the remaining Burlington College property will now go to Farrell as well.

“Eric Farrell will, under the terms of the sale of previous property, be purchasing the property from the bank,” Moore said.

Reached Monday afternoon, Farrell said the news about the college was still fresh. “It’s a disappointment that they’re closing,” he said.

Farrell said specifics about the property are unclear now, but he noted that his project already involves much of the land around the campus.

“We’re doing a pretty substantial development all around them, so we would want to get control of that building and weave it into our project,” Farrell said.

Farrell offered no information about the likely timing of anything moving forward. As to the use of the building, he said, “It will be something other than residential.” He added that it will be a use that “would complement the neighborhood that we’re planning.”

In a statement, Mayor Miro Weinberger said the college’s closure is “a loss for our community.”

“Although it has been clear for years that the college faced major financial challenges, many individuals and organizations, including the city, hoped today’s announcement would never come and worked to achieve a better outcome,” Weinberger said.

Elizabeth Hewitt

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  • Bradley Riley

    So, because I told Jane Sanders years ago that this move would ultimately resort in the school’s closing, does that make me more qualified to be the President of a College than her or Christine Plunkett?

  • Gary Murdock

    WCAX is reporting the obvious, the connection between the crushing debt and Jane Sanders. Her husband’s policy would do the same for America.

    • Jane Sanders destroying Burlington College through imprudent financial management is small potatoes.

      The Urban-Brookings Tax Policy Center and the Urban Institute of Health Policy Center’s recently released analysis of Bernie Sanders’ programs should he be elected president indicates that the US debt would increase by $18 trillion over the next decade.This is after raising taxes by $15 trillion.

      The Sanders, both husband and wife, cannot be allowed near any position of authority where they would have influence or control over fiscal policy.

      This of course is well known to Democrats and why the are so terrified of a Sanders presidency.

      • Dev Martin

        I have a hard time taking you seriously when the author of the paper who generated the 15 trillion figure wrote an open letter saying his data was misrepresented by the media. 15 trillion for the single payer ignores the substantial savings due to health insurance premiums, well-studied savings in medical costs and the costs of prescriptions, etc. He says the average savings per family is $5000 a year. Your complete omission of the net savings is more than a little dishonest.

    • scott jennings

      I posted this to VT Digger BEFORE the story broke:

      “Dems and the Sanders family ilk are corrupt through and through. Bernie supporters are entitled to their opinion but not the facts.

      http://www.aim.org/aim-column/financial-scandals-follow-socialist-millionaire-sanders/

      Follow the Sanders’ money from the Burlington College scandal to VT Woodworking School in Fairfax. I will donate money to VT Digger if they do a fair investigative report on this.”

      How much did Jane’s daughter, Katrina Driscoll, make out on the deal? Other family members? Jane’s Golden Parachute. Anyone, anyone?

  • Deb Chadwick

    Another fine, liberal minded, smaller college has bit the dust, similar to Trinity College’s mismanagement and financial woes….can you say deja vu?

  • robert bristow-johnson

    i am soooo disappointed.

  • David Usher

    Long overdue. I hope the students find their way to a better education.

    How large is the debt?

  • Tom Wheaton

    Feeling the Bern…….

  • Clyde Cook

    I’m sure Ms. Sanders will do the right thing and return the money.

  • Tom Pelham

    This is a sad but not unexpected ending to a project poorly developed from the beginning. The result is 6 years of educational turmoil and the demise of Burlington College as well as the waste of both public and private financial resources of those involved.

    Following the award to plaintiffs against the Diocese, the Diocese entered into a fire sale agreement with Burlington College as outlined in the comments to the VtDigger article linked below. I voted against this sale for the cited reasons.

    If the Kiss Administration and Diocese had jointly and proactively developed a plan for this special property overlooking Lake Champlain, and jointly marketed the plan, then the land’s development would likely have unfolded in a more orderly, and importantly, successful manner. But, Burlington College was allowed the singular inside track with little scrutiny for the use of this 33 acre parcel and the result speaks for itself.

    http://watchdog.org/167647/sanders-burlington-college/

    http://vtdigger.org/2014/08/06/audit-questions-financial-viability-burlington-college/

    Keep in mind that similarly poor financial entanglements, like Vermont Health Connect, have also unfolded in state government these past years. The only differences is that state government can raise taxes and fees to cover and mask poor decision-making; an option not available to Burlington College.

  • Chuck Shannon

    Another example of failed Liberal education. I am sure she will give back the $250000 bonus that she got.

  • Bruce S. Post

    For years, I wrote speeches about how post-secondary education provided opportunities for Americans. I would defend the Pell Grant and need-based financial aid as necessary and virtuous programs to help young people, who might not otherwise have the means, attend a college.

    Those were just words, however; when I took a course at Burlington College about nine years ago, I saw first-hand how important they were. I met students who were not “to the manor born,” but they had a chance to better themselves. Many made the best of that chance despite having come from difficult circumstances in life. In that class, I learned a great deal, and some of my teachers were my classmates — despite the large gap in our years and experience.

    RIP Burlington College. Best wishes and best of luck to its graduates.

  • bruce wilkie

    This has Shumlin/Clinton stink all over it. It would be interesting to find out who at Peoples United made this decision, and what their political connections are.

    • Roger Hill

      I heard there is a connection to J.P. Morgan/Goldman Sachs through Peoples United Bank and can anyone discuss timing, or it that too forward. Can VT Digger see if there is a link?

      • Jim Christiansen

        There are a dozen banks operating in the northeast that could finance a line of credit for Burlington College. The fact that the administration of the college was not able to secure financing from their existing lender or any other financial institution is very telling.

        This was a risky, legacy building expansion gamble, backed by pie in the sky financials that didn’t pan out.

        The tin foil conspiracy hats can be safely returned to the closet… for now.

  • Susanna Rodani

    Not s single person has commented on where and from whom the supposed pledges used to back up the loans were coming from and why those monies never materialized? Isn’t the point that Jane Sanders’ donors were not confirmed and how she got away with committing this tiny college to such a poor financial plan?
    What lies beneath the obvious?

  • Ken Edwards

    Where can a list of Burlington College leaders be found? I want to add them to my list of do not hire.

    My list is getting longer and longer since I’ve added all the companies, program and project managers affiliated with VHC to the list.

    We, as citizens, need to start making clear to employees and future emploiyees understand there are consequences to making poor decisions and then covering them up.

  • Randy Koch

    Let’s hope digger does a follow up. I’d like to find out whether this wasnt a sort of EB 5 Lite, raids on scholarship and pension funds? predictions of enrollment that were beyond ridiculous? Was all of this even legal? Is any of it “Ponzi-like”?

  • Many who don’t like Bernie will use the closing of Burlington College to attack him through his wife.
    How predictable!

    • Jack Renner

      She’s managing his campaign and as he said, they are partners in this. Therefor, she’s just as open to the criticism as he is.
      She tanked the college and bailed, receiving $200k+ severance package. That’s not attacking Bernie, it’s shedding light on their contradicting positions.

      • (second reply- the first didn’t seem to take) Do you think this would be news generating these responses if her name wasn’t Sanders? Also, it’s virtually impossible for a small college with such a tiny a tiny enrollment (200) to survive, as per Trustee Torti

  • Jack Renner

    If 250,000 Vermonters (less than half the states population) donated $12 to the college, they would be out of the debt Jane Sanders caused.

    • Pi$$ing money down a rat hole.

    • Joe Perry

      Jack
      I’m tapped out. My landlord just raised my rent $200/month due to the increase in his property taxes. The water bill was just increased 30%, that translates into another $800 per year. Please STOP suggesting ways to spend my money.

  • Christopher Daniels

    VT Digger offers no evidence that Ms. Sanders specifically caused Burlington College’s economic problems through nefarious or inept actions, but that does not stop its readership from jumping to strong conclusions about her tenure. Specifically, there is no context for why promised pledges failed to materialize or how the failure rates compare to other periods at Burlington College and/or other institutions. This is not to exonerate her for entering a bad land acquisition if risks were known and ignored. But if something out of her (and the college’s control) increased the pledge failure rate, how exactly would that be her fault?

    To put it another way, let’s say I run a business that has reliable 10 year history of sales with specific customers and that I heard from 10 new customers that were going to purchasing my products several times over the next year. Based on this history and anticipated new revenues, I make a decision to invest in infrastructure and staff to meet the anticipated demand. I meet with my bank and present my business plan. Four of the five bank officers approve the loan, but the one votes no because he thinks it’s risky. The loan is approved and the project is initiated.

    But halfway through the year, I’ve only sold product to one-third of my existing customers and only 1 of the new customers. Three quarters of the way through the year, sales have now dropped by 70% and my ability to make payroll and payments on the infrastructure loan come into question. I try securing another line of credit to make payroll, but the bank now says no. Another three months passes and the business environment has not improved. I have no choice but to close the business because the loan payments and payroll cannot be met.

    The question is, did I make a bad decision to expand? Or did unusual circumstances conspire against me? Without investigating my reasoning and talking to my customers, there’s no way to make that judgement. Similarly, without talking to Ms. Sanders and the pledge donors who failed to follow through, there’s no way to judge Ms. Sanders. Why were these pledges abandoned? Because of some action by Ms. Sanders? Or because of some factor out of her control?

    The declining enrollment at the college deserves further inquiry. Why were students not enrolling? Was it because of leadership? Facility limitations? Unattractive courses and majors? Had the college experienced declines in enrollment at some other time? Or had it always been steady and declined precipitously this year? Answers to these questions would help us understand if they specifically related to Ms. Sanders, or if they were a set of unusual circumstances that combined to do in the college.

    Without answers, it’s all innuendo, and VT Digger should hold itself to a higher standard.

    • Mrs. Sanders raised tuition which may be why students weren’t enrolling. Also, I read that there was a letter by an attorney sent to Bernie Sander’s Senate Office inquiring about the loan….apparently the story is that BS called the bank to ‘push’ them into making his wife this loan. The pledges Jane said she had, she didn’t have….and the school had no way of paying this back so they had to close. Sad.

  • Andrea Desjardins

    I hate to be the grammar police, but *Sanders* is not a plural. Therefore, anything that *Jane Sanders* owns is *Jane Sanders’s*, not *Jane Sanders’ *. Similarly, it’s the (single) *dog’s* toy, but it’s the (pack of) *dogs’ * toy.

    • VTDigger uses AP Style, which adds an apostrophe for the possessive of a name ending in ‘s’.

  • Bradley Riley

    So as expected, there’s a lot of negativity here directed toward Jane Sanders, and it’s deserved, but I’d at least like to thank Carol Moore and Coralee Holm for at least trying to save the college. It was a pipe dream the day they took office, but that didn’t stop them from doing what they could. From one former BC student, thank you for trying.

    • Rich James

      No, it’s not deserved. Sanders got pledges in 2010 and was then completely railroaded out of her job in 2011 by the person who then crashed the school’s credibility, Christine Plunkett. How long was Sanders supposed to run the place after she was forcibly ejected?

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