Dive Brief:

• The Oregon College of Art and Craft (OCAC) announced last week that it will close following commencement on May 19, 2019, following years of financial instability.
• In a statement, officials at the 112-year-old college said closure was "the right and only responsible thing to do" after restructuring attempts could not "sufficiently eradicate the rising costs of running a private arts college in the 21st century."
• The college said it plans to help students transfer, though it didn't name any institutions, and is working with a commercial real estate broker to sell the campus and other property to fund operations through the end of the semester.

Dive Insight:

OCAC has been a critical part of Portland, Oregon's creative community, educating artists across a variety of mediums, including metalwork, photography and the fine arts, Oregon Public Broadcasting noted last week. The college, which enrolled 143 students in the fall of 2017, had tried in recent months to strike separate merger deals with the Pacific Northwest College of Art and Portland State University to stay open, but each fell through.

It's becoming a familiar tune for art colleges across the country. As small liberal arts schools find themselves on shaky operating ground with minimal endowments and declining enrollment, those specializing in the arts have been feeling the burn in particular.

That's largely due to scale, according to Inside Higher Ed, which notes that many larger arts institutions are thriving and their enrollments are on the rise after a few years of decline. Several smaller arts colleges have closed, merged, moved locations or made deep cuts to their tuition in recent years, accounting for about one-fifth of members of the Association of Independent Colleges of Art & Design as of early 2014, the publication noted.

Factors making institutions vulnerable to consolidation include enrolling fewer than 1,000 students, not having strong online education and depending on tuition for more than 85% of revenue, according to a 2016 report from EY-Parthenon.

OCAC's decision to close comes just over a decade after the college added new programming and launched a $14 million capital campaign to modernize and expand its footprint. It hoped the move would raise its own and the region's profile among art institutions. However, officials said in the college's closure statement that "it has been difficult to sustain our high level of academic programming in the arts" after the Great Recession. 

An audit for the year ended June 30, 2017 showed student tuition and fees generated $3.9 million of OCAC's $5.3 million in operating revenue. It awarded $1.8 million in scholarships and about $232,000 in other tuition discounts.

In tax filings for 2017, the college reported a roughly $686,000 loss on $7.1 million in total revenue. The year before, it reported losses of about $44,000 on $7 million in revenue, and it lost about $430,000 on revenues of $7.3 million in 2015.

OCAC had a $1 million loan payment due in 2018 and about $500,000 in payments due by 2022. The college also has fully used a $500,000 line of credit secured by all assets and guaranteed by its foundation. 

It is one of several liberal arts colleges on both sides of the country to close or scale back in recent years, including Marylhurst University, in Oregon, and Green Mountain and Hampshire colleges, in New England, the latter of which recently announced that it will admit a smaller fall 2019 incoming class.