Bill Schubart, a retired businessman, is a regular columnist for VTDigger.
In his State of the State message Gov. Phil Scott said his “biggest concern” was Vermont’s aging demographic and shrinking population.
“If we don’t break this cycle, our institutions, including state and local government, won’t be able to afford what they currently do, or what they would like to do in the future, because costs will continue to rise much faster than our tax base can contain,” he warned.
Population decline has become a focus for many struggling institutions, including the higher ed community. Vermont saw three private colleges close last year, and another is essentially shuttering in June. The well-being of Vermont’s 17 remaining colleges is vital to the state’s economy and life-sustaining to the towns they reside in.
Colleges under stress usually cite demographic change as the challenge. But it only camouflages deeper problems, which, if addressed, might secure a market-appropriate number of colleges for Vermont’s future.
The New England Commission of Higher Education (NECHE) has posited the possible loss of as many as 60 colleges in the Northeast in the next decade. According to the Chronicle of Higher Education, the college-advising company Edmit decided at the last minute not to publish an analysis of the financial runway for 946 private colleges in the country when it was threatened with lawsuits.
Many of Vermont’s recent college failures seem to have caught their boards off guard. Reviewing the same information the board should be seeing, NECHE predicts and warns a college that they’re in trouble long before it fails. Given the responsibility trustees bear for the cost of “teaching out” all students with government loans, one would assume that they were watching finances carefully in their own self-interest.
While the stresses affecting private colleges differ somewhat from those felt by community or public colleges, where relentless declines in state and federal funding have distanced them from their goal of offering affordable college to all, there are common factors affecting both that go beyond both demographics and funding.
Two variables where colleges have some control are tenure and infrastructure costs.
Tenure, originally deployed to protect teaching faculty from removal by donors, religions, or powers inimical to their curriculum has survived its original intent. The First Amendment and civil statutes largely protect employees from “wrongful discharge,” as does the robust tradition of academic freedom in all but the most ideologically driven institutions. The downside of tenure is the guarantee of employment regardless of academic performance and the fixed cost it imposes on an institution that must downsize to survive. With considerable controversy, Vermont Law School revoked tenure for 75% of its faculty in 2018, a move that further secured its future.
Infrastructure is another burdensome variable. For years, U.S. News Best Colleges ranking gave inordinate weight to student amenities rather than academic excellence, which is more difficult to analyze and rank objectively. This set off a race to add such things as pools, spas, climbing walls, and enhanced living quarters to attract students, pushing tuitions to today’s levels which average $45,000 annually for a private college, with the more elite Ivies and privates in the $60,000-$80,000 a year range.
Those tuitions, however, are often highly discounted, constituting an operating loss to colleges that must be filled from other sources such as fees and philanthropy. Middlebury’s full cost is $71,830, Bennington’s is $72,650, Champlain’s $59,698, and St Michael’s $59,765, but the actual average amount paid for attending is much less when discounts for merit and need are factored in. The average discount rate in the U.S. is now about 50% and students have become adept at getting colleges to bid against one another for their applications.
Dorms and rigid educational residency both impose significant costs in both money and time. Many young people no longer have either as they enter a world increasingly hostile to starting a family, finding employment, and affording housing and health care, making low or no-residency models increasingly attractive.
At 23, I was married with two children, attending UVM full-time, and working the nightshift at IBM, and had to focus on making a living from my education.
But the real driver behind the need to dramatically reinvent higher ed is the collapse of its perceived value equation. A recent article in the Washington Post asks “Is college still worth it?”
If Vermont is to have a vibrant higher ed community, we must stop dithering and be realistic about the financial pressures on both institutions and their students. We must respond creatively to the new forces shaping higher ed, looking to new student markets, new curriculum and engagement options, and new learning technologies.
The time is now. Let’s get on with it.
Correction: It was Edmit, not the Chronicle of Higher Ed that decided against publishing an analysis of college financials when it was threatened with lawsuits.
