Private colleges feel financial woes
By Meagan Sextonmsexton@siouxcityjournal.com | Posted: Sunday, November 16, 2008
Morningside College psychology major Emily Domayer prepares to place her lab rat into a learning cage Friday in class. Morningside officials say the school is not among private colleges in Iowa that are suffering from the economic slump but that they are continuing to control costs.
SIOUX CITY -- The economic slump is causing Iowa's private colleges some anxiety, but school leaders say they're doing their best to get through it without harming education or the student experience.
In the worst case, Vennard College in southern Iowa will close at the end of the semester, citing debt caused by stagnant enrollment.
The picture is a lot less grim in Northwest Iowa, where for the most part, private colleges say they haven't been hit hard by the nation's economic woes but are continuing to watch their budgets.
At Northwestern College in Orange City, a $10 million project to replace aging residence halls has been delayed for at least a year, President Greg Christy said. But he said he was hopeful the economy would turn around and added that students at Northwestern have adequate access to financial aid because the institution received a $250,000 gift to keep tuition down.
Rick Wollman, spokesman for Morningside College in Sioux City, said Morningside is financially sound.
"We enrolled a total of 1,906 full- and part-time students for the fall 2008 semester," Wollman said. "That's the seventh consecutive year of enrollment increases for Morningside."
Wollman said Morningside is fortunate but nevertheless always monitors expenses for optimal efficiency. "The current economic situation has not changed our ongoing efforts to control costs," he said.
At Dordt College in Sioux Center, John Baas, vice president for college advancement, said he is closely monitoring the regional and national economic situation but that so far, it hasn't affected the institution.
"At this point we have not taken steps like raising tuition or deferring any capital projects or investments in campus infrastructure," Baas said.
And at Briar Cliff University in Sioux City, William Mangan, vice president for academic affairs, said the university is not doing anything differently because it is always conservative with spending.
"We don't typically commit to a lot of long-range expenses because we always know the ground can shift on us," Mangan said. "We're the type of institution that likes to have the money in the bank to build (or make any improvements)."
In eastern Iowa, officials at Luther College in Decorah say they've delayed a $10 million campus project, and Coe College in Cedar Rapids has frozen faculty and staff salaries. Officials with Cornell College in Mount Vernon may delay projects and shift investments.
"I think we are all experiencing a high level of anxiety, given the uncertainty that comes at us from many different directions," Luther President Richard Torgerson said. "We're all in the same boat."
College leaders say they can't rest on the assumption that people will look to academia as a preferable alternative to a slumping job market, as has happened during other economic crises.
According to an August report from The Chronicle of Higher Education, some private colleges without big endowments could be forced out of business if the economy remains bleak for too long.
While other colleges around the country may cut jobs, college presidents in eastern Iowa said that's not on the table for now. To get through tough times, they suggest diversified investing combined with growing enrollments and careful spending.
"We've had several years of enrollment growth and excellent returns on our endowment," Cornell College President Les Garner Jr. said. "That gives you a cushion to fall on, but it doesn't insulate you."
The college officials say the main goal is to strengthen enrollment because as much as 80 percent of private college budgets typically comes from tuition, with endowment earnings and gifts making up the rest.
That means a balancing act for officials when it comes to setting 2009-10 tuition increases next spring. They must keep costs low enough to attract struggling families while maintaining income to support programs.
At Luther, Torgerson expects the increase will be much lower than in typical years. Luther's tuition rose about 7 percent this year.
Other presidents said it's too early to know how the economy will affect tuition.
Returns on Cornell's $75 million endowment were down 11 percent from July through September, making enrollment all the more important, Garner said.
"A very small gain in enrollment can offset what appears to be a relatively large, percentage-wise, decline in the endowment," he said.
The Associated Press contributed to this report.
Issue at a glance
The problem
Leaders at some private colleges in Iowa say their colleges and universities are struggling to stay afloat as the economy continues to decline.
The solution
In an effort to protect the quality of education and the student experience, schools are monitoring budgets, cutting costs, shifting investments and, in some cases, delaying projects. Strengthening enrollment is considered key because private colleges rely on tuition for as much as 80 percent of their funding.
In the worst case, Vennard College in southern Iowa will close at the end of the semester, citing debt caused by stagnant enrollment.
The picture is a lot less grim in Northwest Iowa, where for the most part, private colleges say they haven't been hit hard by the nation's economic woes but are continuing to watch their budgets.
At Northwestern College in Orange City, a $10 million project to replace aging residence halls has been delayed for at least a year, President Greg Christy said. But he said he was hopeful the economy would turn around and added that students at Northwestern have adequate access to financial aid because the institution received a $250,000 gift to keep tuition down.
Rick Wollman, spokesman for Morningside College in Sioux City, said Morningside is financially sound.
"We enrolled a total of 1,906 full- and part-time students for the fall 2008 semester," Wollman said. "That's the seventh consecutive year of enrollment increases for Morningside."
Wollman said Morningside is fortunate but nevertheless always monitors expenses for optimal efficiency. "The current economic situation has not changed our ongoing efforts to control costs," he said.
At Dordt College in Sioux Center, John Baas, vice president for college advancement, said he is closely monitoring the regional and national economic situation but that so far, it hasn't affected the institution.
"At this point we have not taken steps like raising tuition or deferring any capital projects or investments in campus infrastructure," Baas said.
And at Briar Cliff University in Sioux City, William Mangan, vice president for academic affairs, said the university is not doing anything differently because it is always conservative with spending.
"We don't typically commit to a lot of long-range expenses because we always know the ground can shift on us," Mangan said. "We're the type of institution that likes to have the money in the bank to build (or make any improvements)."
In eastern Iowa, officials at Luther College in Decorah say they've delayed a $10 million campus project, and Coe College in Cedar Rapids has frozen faculty and staff salaries. Officials with Cornell College in Mount Vernon may delay projects and shift investments.
"I think we are all experiencing a high level of anxiety, given the uncertainty that comes at us from many different directions," Luther President Richard Torgerson said. "We're all in the same boat."
College leaders say they can't rest on the assumption that people will look to academia as a preferable alternative to a slumping job market, as has happened during other economic crises.
According to an August report from The Chronicle of Higher Education, some private colleges without big endowments could be forced out of business if the economy remains bleak for too long.
While other colleges around the country may cut jobs, college presidents in eastern Iowa said that's not on the table for now. To get through tough times, they suggest diversified investing combined with growing enrollments and careful spending.
"We've had several years of enrollment growth and excellent returns on our endowment," Cornell College President Les Garner Jr. said. "That gives you a cushion to fall on, but it doesn't insulate you."
The college officials say the main goal is to strengthen enrollment because as much as 80 percent of private college budgets typically comes from tuition, with endowment earnings and gifts making up the rest.
That means a balancing act for officials when it comes to setting 2009-10 tuition increases next spring. They must keep costs low enough to attract struggling families while maintaining income to support programs.
At Luther, Torgerson expects the increase will be much lower than in typical years. Luther's tuition rose about 7 percent this year.
Other presidents said it's too early to know how the economy will affect tuition.
Returns on Cornell's $75 million endowment were down 11 percent from July through September, making enrollment all the more important, Garner said.
"A very small gain in enrollment can offset what appears to be a relatively large, percentage-wise, decline in the endowment," he said.
The Associated Press contributed to this report.
Issue at a glance
The problem
Leaders at some private colleges in Iowa say their colleges and universities are struggling to stay afloat as the economy continues to decline.
The solution
In an effort to protect the quality of education and the student experience, schools are monitoring budgets, cutting costs, shifting investments and, in some cases, delaying projects. Strengthening enrollment is considered key because private colleges rely on tuition for as much as 80 percent of their funding.
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dcw wrote on Nov 16, 2008 8:36 AM:
ER wrote on Nov 16, 2008 8:10 AM:
Since 1985 tuition at colleges and universities has increased 439%. Compare that to medical costs which have risen 251% and energy which has risen 108% in the same time period. My source is the Bureau of Labor Statistics from an article in Money magazine Sept 08.
You sacrifice and pay through the nose so your kids can make a better future for themselves. Instead, they come home indoctrinated rather than educated. What a deal! "