Wednesday, April 16, 2014

 

Outrunning the Bear



There’s an old joke about two campers who run across an angry bear.  The campers start running away, and as the bear gains on them, the first camper yells to the second “this is crazy!  We’ll never outrun the bear!”  The second yells back “I don’t have to outrun the bear!  I just have to outrun you!”

I was reminded of that in reading a recent piece in Bloomberg about Dowling College, and the predictably counterintuitive followup piece in Slate.  Dowling is a small, private college on Long Island, and it has fallen upon hard financial times.  Bloomberg suggests that small, expensive, non-elite private colleges like Dowling are likely to start failing in significant numbers soon.  Slate adds “and a good thing, too,” suggesting that failures of low-performing colleges are signs of the market working.

Given that we’re talking about people’s careers, I find Slate’s puerile nyah-nyah posturing inappropriate.  But it’s also needless.  Because if you peel away the snark, there’s actually some truth to what they’re saying.

In most of the Northeast, and much of the Midwest, the number of local 18 year olds has started to decline.  It’s projected to continue to decline significantly for the next decade or more.  And the decline is most pronounced among the demographic groups likeliest to attend college.  

That’s a major issue for the colleges that draw most of their students locally.  (I don’t imagine it mattering as much for colleges with strong national and international reach.  Harvard isn’t sweating this.)  In this part of the country, small private colleges are everywhere, and most of them depend almost entirely on tuition to fund operations. That worked tolerably well when costs were lower and the demographic growing, but with costs growing and the target market shrinking, it’s tough to balance the books.  You can only discount so far before you run out of money.

Given a panoply of options, a small, private college has to be able to answer the question of why someone should pay premium tuition for a nothing-special degree.  (My back-of-the-envelope test: sometime when you’re two or more hours from home, ask people if they’ve heard of the local college.)  Elite institutions can brag about status.  Lower-cost institutions can argue from value.  But a non-elite, high-cost institution needs a distinctive hook.  That could be a religious identity, if the campus has a relative monopoly on that one.  It could be a single program in which it’s widely considered a national leader.  It could be a unique location.  But it has to be something, and the something has to be clear, easy to explain, and attractive to a non-trivial number of people.  You can get a business degree anywhere.  Why pay extra for it?

In a way, Dowling is a terrible case to use as an example.  Unlike many small private colleges, it actually tried to carve out its own niche (in this case, aviation).  It picked the wrong niche and is paying for it now, but the basic idea was there.  Now it has to try to reinvent itself, which is no small task.

From the standpoint of working at a community college, I’m acutely aware of the demographics of the region.  And since the great cost shift of the last ten years has made us much more tuition-dependent than we once were, our economics are starting to resemble those of private colleges.  Enrollments matter to institutional budgets more than they used to.  That cushioned the devastating cuts of 2009, since the initial shock of the Great Recession brought a surge in enrollment.  Now that the enrollment surge has dissipated, we’re starting to come to grips with what the local demographics mean for us.

In my perfect world, of course, the idea of public higher education as a public good would return, and we’d have enough state support to focus on quality rather than quantity.  Hope springs eternal.  In this more muddled world, we’re doing all the things one would expect: focusing on improved success of students we have, using online and other modes to reach students we haven’t reached before, and doing targeted outreach, for example.  By continuing to notch steady gains in each area over time, we’re hoping to offset the impact of the high school decline.  

I just hope it doesn’t come down to outrunning the bear.  It may be true that some small private colleges won’t make it, but I don’t see that as cause to celebrate.  I see it as cause to work like hell.

Comments:
Why is there the assumption that it's a "nothing special" degree? The SLAC I attended, when I was there, was small. Locally known but certainly not nationally. Students from my alma mater are consistently told by employers that they are better prepared than students coming out of our state R1 or the rest of the state system.

Doesn't it really boil down to name recognition? Since regional accreditation and state requirements mean that a business degree from state school and private school are essentially the same, you aren't getting a "better" degree. If anything, picking the more expensive school probably means smaller classes, more interaction with professors (no TA's), closer access to administration, among other things. Worth paying for in my opinion.
 
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