Growing number of small colleges struggling to stay afloat
OAKDALE, N.Y. >> Despite a bucolic waterfront campus on Long Island property once owned by the Vanderbilts, things have not been pretty at Dowling College. The school, 60 miles east of New York City, has been hemorrhaging money, students and faculty.
Enrollment has plummeted 62 percent since 2005. Tuition has nearly doubled, but it hasn't stabilized the college's finances. Multimillion-dollar budget deficits drained a quarter of the college's assets in four years. There's been a revolving door of seven presidents in a decade. And since 2014, the college has had to eliminate 26 faculty jobs.
"It's been a struggle," said the school's latest president, Albert Inserra, who is now negotiating with an unidentified institution in a bid to keep Dowling afloat.
Dowling is among a growing number of small liberal arts colleges facing similar difficulties in the aftermath of the Great Recession. Many of these schools share certain traits: They have minimal endowments and rely heavily on tuition revenue, their tuition is relatively high, and they're in suburban or rural areas where the number of college-age students has dropped.
Trinity Lutheran University, a school of 211 students in Everett, Washington, is closing this spring after 72 years. Marian Court College, a 300-student Roman Catholic school in Swampscott, Massachusetts, shut its doors last June. Sweet Briar College in Virginia was on the brink of closing when a new president and governing board took over last summer. Iowa Wesleyan University, with 470 students in Mount Pleasant, Iowa, laid off 45 employees and closed 16 academic programs two years ago to cut costs.
The Wall Street rating agency Moody's predicts the number of four-year, nonprofit colleges closing annually will triple in the next few years, while mergers will more than double. Between 2004 and 2014, the nation averaged about five closings and two to three mergers per year, the agency said.
"These small colleges are particularly vulnerable because they often don't have the philanthropy and liquidity to keep going," said Moody's analyst Kim Tuby. She said families are becoming increasingly price sensitive and want a college that can demonstrate a return on their tuition investment.
Many small, private colleges are actually thriving, and some education leaders see Moody's forecast as overly pessimistic. Experts point to schools like Hendrix College in Conway, Arkansas, where enrollment has climbed more than 30 percent since 2005, to 1,350 in 2014, even as tuition has doubled.
Still, students are increasingly being drawn to larger urban campuses rather than smaller colleges in suburban or rural areas, said Susan Pierce, former president of the University of Puget Sound in Washington and a consultant to college presidents and boards. Also, a growing number of college students need substantial financial aid, she said, which cuts into schools' bottom line.
Dowling, named after its chief benefactor, philanthropist Robert Dowling, opened in 1968. It has two campuses on eastern Long Island, but its primary home is in the hamlet of Oakdale on land once owned by William K. Vanderbilt, grandson of Commodore Cornelius Vanderbilt, the railroad magnate. An ornate mansion built in 1901 is the centerpiece of the campus and looks out on the Connetquot River.
Dowling's enrollment peaked at 6,379 in 2005 but dropped to 2,453 by the fall of 2014. Tuition and fees have climbed steadily, from $22,530 in 2004-05 for in-state students to $44,672 in 2014-15.
The Middle States Commission on Higher Education has informed Dowling it is in danger of losing its accreditation and is reviewing the school's status. Dowling announced this month it is negotiating with an "academic affiliation partner" in a bid to survive.
Inserra would not comment on the negotiations but spoke about programs the college is exploring to attract students, including a new course on drones.
"Aviation is one of the niches we provide and do very well," he said, adding that Dowling, like others, is "coming to grips to understanding the role of private colleges in this marketplace of higher education."
Dowling students remain optimistic.
"I wasn't too worried about it," said freshman Mcandre Pierre, of New York City, who likes the intimate class settings the college provides. "I figured they would work around it."
Carly Lange, a freshman working in the college bookstore, said she is confident the school her parents attended will survive. "I didn't really think anything about it" when applying, she said. "It was smaller, and I heard a lot of great reviews about the teaching program."
An analysis of hundreds of colleges and universities released in 2014 by the management consulting firm Bain & Co. found that 43 percent were on an "unsustainable financial path," up from a third in 2012.
All kinds of schools are under pressure, and even public universities such as the University of Georgia have consolidated campuses to cut costs, said Jeff Denneen, head of Bain's higher education practice. But small, private colleges are particularly vulnerable, he said, partly because their sticker prices tend to be higher.
David Warren, president of the National Association of Independent Colleges and Universities and the former president of Ohio Wesleyan University, noted that even if the Moody's numbers are accurate, the closings amount to less than 1 percent of all small colleges.
"I do think we will see more mergers and that will play to strengths of some institutions," he said. "Doubling and tripling of closures and mergers does not strike me as an accurate projection. Mergers take an incredible amount of time. We don't see them moving at the speed Moody's has predicted."
Collin Binkley reported from Boston.
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