Four years ago, there were at least a dozen private liberal arts colleges scattered across the small state of Vermont. Today, just eight remain, with one planning to fold into a Massachusetts college and another at risk of closing if it doesn't shore up its finances.
In Vermont, the late Clayton Christensen's infamous prediction that half of all colleges and universities would close or go bankrupt in the next decade appears to be coming true. The Harvard Business School professor, who later dialed back his dire prognosis, blamed the advent of online education for the eventual demise of much of the sector.
But small liberal arts colleges are more concerned with other headwinds. Enrollment of traditional-age students will likely slide further in many parts of the country over the next decade due to a projected drop-off in high school graduates. Competition for these students has led to increased tuition discounting at many private institutions. And Americans are increasingly doubting the value of higher education.
Those issues factored directly into the closures of many of the now-shuttered Vermont colleges. But in some cases, a constellation of other problems borne from attempts to address those woes hastened their decline.
Officials at Vermont's remaining colleges say they aren't going to make the same mistakes. And they're working to assure students and other stakeholders that they're well-positioned to survive the challenges headed their way over the next decade.
"It's too simple for the CEOs of these colleges or for reporters to say this is the result of inevitable decline," said Matthew Derr, president of Sterling College, in an interview with Education Dive. "These are institutions — some of which have survived the Civil War (and) the Great Depression — that have historically demonstrated all kinds of resilience."
Restoring public confidence
Some higher ed observers posit that these colleges' centuries-old business model may no longer work as well as it used to.
"They became good at teaching a certain kind of student with a certain kind of curriculum," Richard Price, a higher education research fellow with the Clayton Christensen Institute, told Education Dive in an interview. "When the circumstances around you change, it can be very difficult to pivot away from that."
Although Moody's Investors Service predicted about 15 colleges nationwide will close this year, fears of immediate and widespread shutdowns may be somewhat overblown. Enrollment at private nonprofit colleges has held steady over the last few years, and it is up slightly from two decades ago.
Still, colleges in Vermont are working to restore faith in the liberal arts model and in their operations.
"We want to reassure the community and anyone who inquires about the health of our institution," said Nicole Curvin, Middlebury College's dean of admissions, in an interview with Education Dive.
Middlebury is hosting an event next month called "Vermont Day," which means to help local high school students learn about the college application process and institutions within their home state. Ten other Vermont colleges will be there, including several liberal arts schools.
Although the college — which has a $1 billion endowment and stable enrollment — appears to be well-positioned for the next decade, waning trust in Vermont's colleges is a real concern.
A spokesperson for Saint Michael's College declined to comment for this story, saying that media coverage of the closures in the state "has begun to erode the public's confidence in Vermont as a destination for higher education."
But Vermont's challenges extend beyond public perception. The state's K-12 school systems have far fewer students than they did a decade ago, cutting into colleges' recruiting pipeline. Moreover, rising tuition discount rates are eating away at liberal arts institutions' revenue.
To shield themselves from enrollment declines, leaders from several institutions told Education Dive that they're fine-tuning their recruiting efforts and exploring new income streams.
Officials at Champlain College are no strangers to change.
The 142-year-old institution has served stints as a for-profit school, a two-year college and, most recently, a pioneer in online education. In the 1990s, the college transitioned to four-year programs and now offers career-focused degrees in fields such as video game design, computer science and applied mathematics.
"These are institutions — some of which have survived the Civil War (and) the Great Depression — that have historically demonstrated all kinds of resilience."
Matthew Derr
President, Sterling College
Champlain's enrollment, split between online-only and on-campus students, has mostly grown over the past 10 years. Even so, its leaders have been mulling ways to ensure the school can withstand the next decade, said Lisa Bunders, vice president for enrollment management. That includes using demographic and other kinds of data to pinpoint pools of prospective students across the nation who may be interested in its undergraduate campus-based programs, instead of merely relying on recruits in their "own backyard," she added.
Other institutions in Vermont see an opportunity to recruit more local students and strengthen ties with different types of postsecondary institutions in the state. Bennington College, for example, is interested in creating transfer agreements with Vermont community colleges that would let those graduates finish the last two years of a bachelor's degree at the liberal arts institution.
"(We) saw this as an opportunity, particularly as other colleges are closing in Vermont, to support pathways for students," said Zeke Bernstein, the college's dean of research, planning and assessment, in an interview with Education Dive.
Some colleges are doubling down on their unique offerings.
Sterling College, which only offers degrees related to ecology, agriculture and the environment, limits its enrollment to about 125 students. The curriculum's unique focus helps the college attract potential donors, Derr said.
"The work that our graduates will do is important to addressing issues like climate change and biodiversity loss and the kinds of social crises that we are facing, so the base of support for Sterling is much broader than its alumni," he said.
Sterling brought in nearly $2 million in donations in the 2019 fiscal year and is on track to raise $2.5 million this year, Derr said. The college's enrollment levels have been steady in recent years, and it had $3.2 million in net assets in 2018, according to federal tax documents.
But the school's community was "particularly connected" to the closure last year of Green Mountain College, a Vermont institution with a similar focus on ecology, Derr said. About a dozen of Green Mountain's roughly 400 students transferred to Sterling after it shuttered.
Sterling also recently expanded its footprint into Kentucky, where it opened a two-year farming program for transfer students, funded by the NoVo Foundation, a social justice organization. Its support allows students to attend tuition-free.
The college is actively seeking out similar opportunities. However, Derr said it will remain focused on serving the Vermont community, noting that he's confident his institution and others can make decisions "that have them thriving, not just surviving."
Holding the line
The story of Burlington College, which folded in 2016, is similar to that of other colleges to close. Its demise started more than a decade ago when the institution was looking for ways to address enrollment concerns and a tight budget.
Some speculate that it could have survived if it hadn't spent $10 million to buy waterfront property it hoped to turn into a campus that would attract more students. It used the promise of donations to help secure a loan it later struggled to pay back. Leaders cited the "crushing weight of debt" from the land purchase as the reason for its closure in 2016.
In early 2019, the College of St. Joseph, Green Mountain College and Southern Vermont College also announced they were closing.
Falling enrollment and rising tuition discounting are often cited as contributing factors to a college's closure, but Sterling's Derr contends that "there's a multifaceted story" in each of those institutions' downfalls.
Southern Vermont, for instance, was struggling to make payments on roughly $6 million in bonds used to finance a new dorm and other campus improvement projects. Likewise, the College of St. Joseph had mounting debt and spent endowed funds on the failed launch of a physician assistant program.
Now, eyes are on Goddard College after its accreditor, the New England Commission of Higher Education, placed it on probation in 2018 over financial and governance concerns.
Enrollment at Goddard, which offers self-directed programs in areas such as the arts, psychology and education, plunged from 800 in 2010 to around 350 today. The resulting loss in tuition revenue led financial auditors to express doubts that the college would be able to continue operating.
But Goddard's president, Bernard Bull, who took the helm in late 2018, is optimistic about the college's future. Over the past year and a half, the college has slashed its expenses by nearly 30% through layoffs and other cuts. It also launched a $4 million fundraising campaign to grow its cash reserves.
Because a large majority of Goddard's students are age 25 or older and many are looking for a career change or to "step it up in their life in some meaningful way," he said, the school could be less susceptible to declines in traditional-age students.
Goddard officials don't plan to grow enrollment significantly over the next few years. Instead, they hope to hold the line at roughly 350 students, Bull said, adding that colleges can "sometimes get in trouble" when they set unrealistic enrollment goals.
"If they say, 'Well, we're going to have a thousand students,' and they budget for a thousand students' worth of tuition, then they don't have to reduce their expenses," he told Education Dive in an interview. "The problem is, if you don't hit that goal ... now you have a deficit and you could be experiencing a serious crisis."
