Looming demographic cliff - avoid colleges with less than A financial rating?

[Anonymous]

DCUM has been telling me for 10+ years that all small colleges outside of the top 20 are going to fail. I just don’t buy it any more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Endowment matters. Another thing to look at is competitiveness of the applicant pool and whether schools are filling their classes. The NEASACs and better midwestern SLAC might have to go deeper in the applicant pool, but will still fill classes. The schools that still have slots when the “still open for applications/reopening applications” list comes out on 5/1 (may be 5/15 this year) are more concerning. That means even going to the WL they could not fill a class. If it happens once (I think Purdue once had underenrollment in arts & sciences), it could be an odd year in terms of admissions calculations. But, I’ve been sad to see schools like Earlham pop up on the list consistently. That’s a problem and I’d think twice. (I believe Earlham is also in a cash crunch though, so… which is too bad, I know a couple of amazing grads from there, and am aware of their financial situation because my own kids considered it. Did not apply because of the endowment plus not filling classes issues).

Earlham gets an A+ from
Forbes and has a 1/2 billion dollar endowment, but it has under 1000 students.

Earlham has a strong endowment, but its flagging enrollment is forcing it to dip into that endowment to keep operations running. If that happens too many years in a row, financial trouble could loom. They need to find a way to get back over 1000 students without having to "buy" those students by discounting tuition too much. The same issue is happening at schools like Bennington and Bard that occupy the same narrow woke niche as Earlham.

I was right there with you until “woke,” which is the sign of a non-serious person at best and a concern troll at worst. Find better words. Maybe by attending a SLAC?

So you agree with everything the PP said but because they used one word you don't like, they must be an uneducated troll?

Not the PP, but it definitely denotes one attribute or the other.

Either you’re a troll, using the term deliberately to fire up an emotionally-charged debate; or you’re a sincere poster, but most of what you know about the world today is drawn from bot-infested social media memes. Or that alarmist Facebook post shared by your Aunt Brenda.

I dunno, the PP seemed to know a lot about the financial machinations of random LACs to be an ignorant rube who forms their worldview through Facebook memes.

[Anonymous]

I agree Earlham may be in trouble, which is too bad because it’s a great little school. But if you’re looking at slightly larger or higher ranked schools in slightly better locations, I don’t think you need to worry.

[Anonymous]

Anonymous wrote:I agree Earlham may be in trouble, which is too bad because it’s a great little school. But if you’re looking at slightly larger or higher ranked schools in slightly better locations, I don’t think you need to worry.

I don't get why people think the national LACs like Earlham want to increase their enrollment. Schools have a specific enrollment target based on their housing, their faculty capacity, their dining capacity, the licenses they pay for software/digital library resources etc. It's not like schools just want to get more and more students--they have an enrollment target that matches their capacity. Small private LACs have a lot of flexibility and very few have experienced financial trouble. Smaller regional publics and parochial schools are the most under threat because a larger body holds decision-making power over them --the state or the church. The state could decide that a school like Roanoke or Old Dominion would be better as a community college or as a specific training institution. The Catholic church can decide (and has!) to sell off its low-enrollment colleges rather than invest in them.

[Anonymous]

My mom’s college went under. It was a Catholic women’s college so served a niche that doesn’t really exist anymore. And it was a very slow sink — probably at least thirty years for it to finally go under.
This indicates to me that these schools can limp along for a long time. I’d be more worried about cuts in programs than actually belly-up closure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree Earlham may be in trouble, which is too bad because it’s a great little school. But if you’re looking at slightly larger or higher ranked schools in slightly better locations, I don’t think you need to worry.

I don't get why people think the national LACs like Earlham want to increase their enrollment. Schools have a specific enrollment target based on their housing, their faculty capacity, their dining capacity, the licenses they pay for software/digital library resources etc. It's not like schools just want to get more and more students--they have an enrollment target that matches their capacity. Small private LACs have a lot of flexibility and very few have experienced financial trouble. Smaller regional publics and parochial schools are the most under threat because a larger body holds decision-making power over them --the state or the church. The state could decide that a school like Roanoke or Old Dominion would be better as a community college or as a specific training institution. The Catholic church can decide (and has!) to sell off its low-enrollment colleges rather than invest in them.

No one is saying Earlham wants to be Arizona State, but it needs to increase its enrollment from current levels just to be able to meet expenses without having to dip into its endowment or shut down departments or services. The difference between 600 and 1,000 full time students represents millions of dollars in working capital each year. That's a big deal for a school that size. The fact is that many of the artsy, creative, woke niche LACs outside the top 50-75 or so (Earlham, Bard, Bennington, Hendrix, etc.) have enrollment numbers 20+ percent below what they were a decade or two ago. Unless they find a way to turn it around, they're going to be in trouble when the demographic cliff hits in a couple years. Earlham, with its solid endowment, might hang on longer than the others, but its current trend is absolutely not sustainable long term.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I agree Earlham may be in trouble, which is too bad because it’s a great little school. But if you’re looking at slightly larger or higher ranked schools in slightly better locations, I don’t think you need to worry.

I don't get why people think the national LACs like Earlham want to increase their enrollment. Schools have a specific enrollment target based on their housing, their faculty capacity, their dining capacity, the licenses they pay for software/digital library resources etc. It's not like schools just want to get more and more students--they have an enrollment target that matches their capacity. Small private LACs have a lot of flexibility and very few have experienced financial trouble. Smaller regional publics and parochial schools are the most under threat because a larger body holds decision-making power over them --the state or the church. The state could decide that a school like Roanoke or Old Dominion would be better as a community college or as a specific training institution. The Catholic church can decide (and has!) to sell off its low-enrollment colleges rather than invest in them.

No one is saying Earlham wants to be Arizona State, but it needs to increase its enrollment from current levels just to be able to meet expenses without having to dip into its endowment or shut down departments or services. The difference between 600 and 1,000 full time students represents millions of dollars in working capital each year. That's a big deal for a school that size. The fact is that many of the artsy, creative, woke niche LACs outside the top 50-75 or so (Earlham, Bard, Bennington, Hendrix, etc.) have enrollment numbers 20+ percent below what they were a decade or two ago. Unless they find a way to turn it around, they're going to be in trouble when the demographic cliff hits in a couple years. Earlham, with its solid endowment, might hang on longer than the others, but its current trend is absolutely not sustainable long term.

Where are you finding that fact?

[Anonymous]

Anonymous wrote:Endowment matters. Another thing to look at is competitiveness of the applicant pool and whether schools are filling their classes. The NEASACs and better midwestern SLAC might have to go deeper in the applicant pool, but will still fill classes. The schools that still have slots when the “still open for applications/reopening applications” list comes out on 5/1 (may be 5/15 this year) are more concerning. That means even going to the WL they could not fill a class. If it happens once (I think Purdue once had underenrollment in arts & sciences), it could be an odd year in terms of admissions calculations. But, I’ve been sad to see schools like Earlham pop up on the list consistently. That’s a problem and I’d think twice. (I believe Earlham is also in a cash crunch though, so… which is too bad, I know a couple of amazing grads from there, and am aware of their financial situation because my own kids considered it. Did not apply because of the endowment plus not filling classes issues).

is there a list of schools not filling their classes? how would we find this info?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Endowment matters. Another thing to look at is competitiveness of the applicant pool and whether schools are filling their classes. The NEASACs and better midwestern SLAC might have to go deeper in the applicant pool, but will still fill classes. The schools that still have slots when the “still open for applications/reopening applications” list comes out on 5/1 (may be 5/15 this year) are more concerning. That means even going to the WL they could not fill a class. If it happens once (I think Purdue once had underenrollment in arts & sciences), it could be an odd year in terms of admissions calculations. But, I’ve been sad to see schools like Earlham pop up on the list consistently. That’s a problem and I’d think twice. (I believe Earlham is also in a cash crunch though, so… which is too bad, I know a couple of amazing grads from there, and am aware of their financial situation because my own kids considered it. Did not apply because of the endowment plus not filling classes issues).

is there a list of schools not filling their classes? how would we find this info?

A list of still accepting applications is published 5/1 every year. I imagine it will be on 5/15 this year. Some schools that are meh, some you’ve never heard of, and always some surprises. It’s a place to look for a second shot if your kid misjudged their applications. Someone always links to it on here.

[Anonymous]

These sorts of schools are my jam. I love what they do, and I think they’re the best bargain in education right now. So I’ve been paying a fair amount of attention to this.

If you’re serious about a school, I recommend looking at more than just the most recent Forbes grade. Check out the trend line over the last decade. Also, where does it fall on Forbes list relative to other schools? Is it above the median? Below? (Remember too that there are far more colleges out there than are graded by Forbes.)

Ffor every school that closes, other schools will absorb students. Plenty are going to be just fine.

[Anonymous]

I’m curious whether/why people think regional publics will fare better than regional privates. I get that they’re subsidized by the state, but doesn’t this just place them at the mercy of state politics/ politicians?

And sure, they’re less expensive than non-merit privates, but the real cost of attendance is often on par with many of the merit privates.

What am I missing?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Endowment matters. Another thing to look at is competitiveness of the applicant pool and whether schools are filling their classes. The NEASACs and better midwestern SLAC might have to go deeper in the applicant pool, but will still fill classes. The schools that still have slots when the “still open for applications/reopening applications” list comes out on 5/1 (may be 5/15 this year) are more concerning. That means even going to the WL they could not fill a class. If it happens once (I think Purdue once had underenrollment in arts & sciences), it could be an odd year in terms of admissions calculations. But, I’ve been sad to see schools like Earlham pop up on the list consistently. That’s a problem and I’d think twice. (I believe Earlham is also in a cash crunch though, so… which is too bad, I know a couple of amazing grads from there, and am aware of their financial situation because my own kids considered it. Did not apply because of the endowment plus not filling classes issues).

is there a list of schools not filling their classes? how would we find this info?

A list of still accepting applications is published 5/1 every year. I imagine it will be on 5/15 this year. Some schools that are meh, some you’ve never heard of, and always some surprises. It’s a place to look for a second shot if your kid misjudged their applications. Someone always links to it on here.

It doesn't mean a school is in decline or anything--they just didn't predict their yield correctly. With students applying to 20+ schools it can be very challenging.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Endowment matters. Another thing to look at is competitiveness of the applicant pool and whether schools are filling their classes. The NEASACs and better midwestern SLAC might have to go deeper in the applicant pool, but will still fill classes. The schools that still have slots when the “still open for applications/reopening applications” list comes out on 5/1 (may be 5/15 this year) are more concerning. That means even going to the WL they could not fill a class. If it happens once (I think Purdue once had underenrollment in arts & sciences), it could be an odd year in terms of admissions calculations. But, I’ve been sad to see schools like Earlham pop up on the list consistently. That’s a problem and I’d think twice. (I believe Earlham is also in a cash crunch though, so… which is too bad, I know a couple of amazing grads from there, and am aware of their financial situation because my own kids considered it. Did not apply because of the endowment plus not filling classes issues).

Earlham gets an A+ from
Forbes and has a 1/2 billion dollar endowment, but it has under 1000 students.

Earlham has a strong endowment, but its flagging enrollment is forcing it to dip into that endowment to keep operations running. If that happens too many years in a row, financial trouble could loom. They need to find a way to get back over 1000 students without having to "buy" those students by discounting tuition too much. The same issue is happening at schools like Bennington and Bard that occupy the same narrow woke niche as Earlham.

I was right there with you until “woke,” which is the sign of a non-serious person at best and a concern troll at worst. Find better words. Maybe by attending a SLAC?

Get over yourself.

[Anonymous]

Anonymous wrote:My mom’s college went under. It was a Catholic women’s college so served a niche that doesn’t really exist anymore. And it was a very slow sink — probably at least thirty years for it to finally go under.
This indicates to me that these schools can limp along for a long time. I’d be more worried about cuts in programs than actually belly-up closure.

I think if you stick to the National Liberal arts colleges in the top 100 of USNWR, you'll be fine.
Significant problems/changes are more likely for regional privates (limping or changing into very pre-professional quasi trade schools instead of liberal arts). Catholic colleges are likely to continue closing--as are schools that are expensive to run like art schools or culinary schools. Regional publics are also in danger.