General Education

Why So Many Colleges Are Closing—And How to Know Yours Is Financially Stable

Why So Many Colleges Are Closing—And How to Know Yours Is Financially Stable
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Francesca Friday March 7, 2019

A number of independent colleges are wavering beneath financial pressures. How can you ensure your dream school is financially stable?

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On January 15, Hampshire College’s prospective 2019 freshman class received a letter.

This wasn’t the much-anticipated letter of admission that arrives either in a fat orange envelope, conjuring visions of hallowed halls and lush, leafy quads. This wasn’t even the smaller, dread-inducing envelope whose contents usually airs on the side of disappointment.

The high school seniors on the receiving end of these letters had already made the cut, and were most likely comparing offers from Hampshire, a progressive liberal arts college in Western Massachusetts, to their other institutions of choice.

“Dear Hampshire Community," began Hampshire President Miriam E. Nelson, “I’m announcing today our intent to find a long-term partner that can help us achieve a thriving and sustainable future for Hampshire."

Hampshire’s endowment of $52 million dollars, a pool of donations that the school invests for financial growth, may seem huge. Unfortunately, it’s not enough to support Hampshire's declining admissions rates while also meeting the the Massachusetts Board of Higher Education's financial requirements to safeguard the interests of students.

The letter went on to state that as the administration searches for a strategic partner to help sustain its financial woes, the school board is “carefully considering whether to enroll an incoming class this fall."

Wait... students were turned away after already being accepted?

That’s right. In mid-January, past the application deadline for many colleges, Hampshire’s incoming freshman were left in admissions purgatory, with no idea whether they’d be able to attend in the fall.

__(Food for thought: How NOT To Choose A College Major, Based On Your Myers-Briggs Personality Type)__

A few weeks later, the board reached a decision: a highly-curtailed freshman class would be admitted, reserved to early admission and gap year admittees.

Hampshire College isn’t the only institution to shutter in the face of poor financing.

Green Mountain College, a private liberal arts school in Vermont with a focus on environmental studies, announced in January that it will shut down at the end of the spring semester due to declining enrollment. At that point, Green Mountain's undergraduate body of 468 students will be forced to transfer.

According to a Moody’s report published 2018, roughly 15 private colleges will close each year in 2019 and 2020—and not just smaller private schools.

So how can prospective students avoid getting stuck at a school that might not even be able to afford to stay open in the long-run?

Most students weigh a variety of factors during their college search: which schools have great academic programs, exciting sports teams or extracurricular activities, and a safe and beautiful campus. You know, "the basics."

What many students don’t think about, unfortunately, is financing. The best way to ensure sure your dream school is financially stable? Do your research.

The U.S. Department of Education requires all educational institutions to report annually on their finances, and then it scores each school's financial health. Download a spreadsheet of those composite scores to understand whether your school of choice qualifies as fiscally responsible.

The Department of Education’s IPED database is another resource for information on retention rates and student aid programs—both of which provide a sense of how much funding each school can provide to its students.

Finally: Don’t be afraid to ask the hard questions! Email the admissions offices of your top colleges, and speak up on tours to ask about the institution’s finances. Most colleges are required to disclose this information by law.

The bottom line? Not every school is at risk of closure, but it is one of the many harsh realities that accompanies a changing economy and educational climate. Be extra vigilant during your college search, especially when it comes to smaller private schools at a higher risk of underfunding, to understand a school’s financial health before you make the jump!

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