(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.
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, 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.