For-Profit White Knight?
Sierra Nevada College has picked from among its suitors -- and its board believes it has found the outside help it needs to preserve its core mission as a liberal arts institution.
That help is likely to come from Knowledge Universe Learning Group, Michael Milken's education company, which has investments in companies that operate in early childhood education as well as in online graduate and professional education (the latter though Cardean Learning). While details are still being worked out, the relationship envisions the preservation of Sierra Nevada's nonprofit status and liberal arts mission, but an alliance in which the college and Knowledge Universe would offer a range of distance education programs.
Sierra Nevada's board announced in August that the institution was seeking to find another entity to merge with or to take it over. The college, close to the shores of Lake Tahoe, had seen enrollments dwindle to about 300 in liberal arts and selected other programs, most notably environmental studies. With an endowment of only $4 million, the college was not financially viable for the long run, officials said. A number of traditional universities -- and some for-profit ventures -- have since been vying to establish a relationship with Sierra Nevada.
On Saturday, the board announced that it had agreed to "exclusive" negotiations with Knowledge Universe. John W. Altman, chairman of the board, said in an interview that he believed the deal would almost certainly be finalized soon, and that it would protect the college's mission, students who are in the middle of degree programs, and employees.
Altman also said that he thought the relationship with Knowledge Universe could be a new model for higher education. "The business model of higher education is broken and there has to be some partnership with the private sector to bring accountability and vigor to higher education." Altman said that he expected the college to be able to grow quickly to 1,000 students after the deal is wrapped up.
As various entities made presentations to the Sierra Nevada board, Altman invited some students and faculty leaders to hear them. While Altman stressed that he didn't want any group to have veto power, he said that he wanted everyone to have a chance to analyze options.
Jim Keranen, president of the student government at Sierra Nevada, said "every single student who has a clue about what's going on is totally excited." Keranen said that he wasn't sure about some of the proposals from other bidders, but that when Milken outlined his vision for a partnership with the college, "I was shaking through his presentation because I was so excited."
Milken's career has had highs and lows. He earned a fortune as a financier, was nicknamed the "junk bond king," entered into a plea agreement (on what he characterizes as technical violations) after he faced a massive indictment on various securities charges, and rebuilt a career as an investor and philanthropist, with an emphasis on research and education. Keranen said that the controversies in Milken's past were things "to read about in textbooks," and not a matter for concern now.
For-profit higher education has been growing much faster than traditional higher education, with most of that growth coming through the companies opening up their own new campuses and programs. But in the past few years, there has been increased discussion that alliances with nonprofit institutions (or outright purchases) could be a new direction for growth -- and for the rescue of small nonprofit institutions that might not otherwise survive.
In announcing the relationship with Knowledge Universe, Sierra Nevada officials stressed that a key role would be played by Ted Sanders, who will be representing Milken's company in the negotiations and who is chairman of Cardean. Before joining Cardean, Sanders had a long career in (traditional) education and government, including serving as deputy secretary of education, president of the Education Commission of the States, president of Southern Illinois University, and the chief state school officer in three states (Illinois, Nevada and Ohio).
In an interview, Sanders said that the new arrangement would "preserve the mission" of Sierra Nevada, while also letting it expand. He said that Knowledge Universe and Cardean have expertise that could allow for the creation of distance education programs that could significantly expand the reach of the college. One possibility, he said, would be to have students enroll in some distance programs that might involve two-week stays at the Sierra Nevada campus in what he called a "unique blended program." Sanders also said that he thought a master's in environmental studies might be created.
Another goal is to use Sierra Nevada College to create a deeper intellectual and cultural environment in the Lake Tahoe area, Sanders said. He said that the Aspen Institute might be a model for such efforts.
Asked if the Sierra Nevada alliance could signal a greater interest by Knowledge Universe in higher education, Sanders noted that Cardean has already been a part of the company, but said that the answer to the question was "quite possibly."
Chuck Levitan, who has taught environmental science, ecology and physics at Sierra Nevada for 20 years, said that although many details remain unclear to faculty members, people are very excited about the prospect of preserving their programs -- and jobs. He said that Knowledge Universe has seen the kind of growth that "gives credibility" to the college.
On the question of working with a for-profit entity, Levitan said "people aren't worked up about it."