One of the fastest-growing expenses for athletics programs at public universities is severance, The Washington Post reported. The Post analyzed spending at 48 public universities in top athletic conferences and found that, in 2014, the universities were spending $28.5 million on severance deals with former coaches. That's a 120 percent increase from 2004.
Evangel University, in Missouri, has announced that it is cutting its budget by $4 million (about 10 percent) to respond to enrollment declines without a major tuition increase, The Springfield News-Leader reported. The cuts include 12 layoffs, and another 32 positions eliminated when faculty and staff members accepted buyout offers.
Miller College, a small private institution with about 275 students, is shutting down due to severe financial problems. The college, on the campus of Kellogg Community College, primarily offers upper division courses. The Battle Creek Enquirer reported that recent audits revealed financial challenges far greater than officials realized they faced, and that there was no way to get the college financially solvent. Among the problems appears to be that hundreds of thousands of dollars in federal aid may have been distributed in unauthorized ways. Western Michigan University announced Tuesday that it would offer assistance so that Miller students could complete their degrees.
Another women's college has decided to go completely coeducational.
The College of New Rochelle on Tuesday announced its plans to begin accepting men into its School of Arts & Sciences in fall 2016. The New York college has been accepting men in other programs for about four decades. Its School of Nursing, School of New Resources (for adult learners) and Graduate School are already coed -- the college's School of Arts & Sciences was the last holdout, and has been women only since the college was founded in 1904.
“This decision was made after very careful thought, evaluation of several key factors, and above all with a great reverence for the college’s mission,” Elizabeth LeVaca, chair of the college's governing board, said in a statement, adding that the board received supportive feedback on the change.
A Facebook page for New Rochelle alumni contained a mix of comments, many supportive and understanding but several quite critical.
The University of Cambridge last week announced a $52.6 million gift from the estate of Ray Dolby, the founder of San Francisco-based Dolby Laboratories, who died in 2013.
The gift is the largest so far in Cambridge's £2 billion fund-raising campaign. It will go to the university's Pembroke College, where Dolby enrolled in graduate school, worked as a research fellow and met his wife, Dagmar.
“The University of Cambridge played a pivotal role in Ray’s life, both personally and professionally,” Dagmar Dolby said in a statement. “At Cambridge, he gained the formative education and insights that contributed greatly to his lifelong groundbreaking creativity, and we also began a wonderful lifetime together there.”
Stability and modest growth. That's what U.S. colleges and universities can expect over the next year to 18 months, according to a 2016 outlook by credit rating agency Moody's Investors Service.
Tuition revenue growth is expected to be between 2 and 3 percent for public and private universities, with overall revenue growing at about 3 percent. State funding for public universities is anticipated to grow between 2 and 4 percent.
Moody's outlook is based off a comprehensive look at the agency's higher education portfolio, which includes 230 public universities and 275 private universities.
Though Moody's predicts most colleges will see some revenue growth, it says between 20 to 30 percent of the colleges it rates will struggle to reach the 3 percent revenue growth figure. The ones that will struggle the most, according to Moody's, are small colleges with limited economies of scale.
A former trustee who was ousted from the board of Johnson C. Smith University is raising questions about the private, historically black university's financial health. The Charlotte Observer reported that Talmadge Fair, the former trustee who is president of the Urban League of Greater Miami, has drawn attention to growing deficits at the institution. Documents filed by the university indicate a $7.5 million deficit for the fiscal year that ended June 30, 2014, and a $10 million deficit for the prior year. The newspaper also quoted an employee who discussed regularly fielding phone calls from vendors who were not being paid.
The university published statements on its website last week that defended the ouster of Fair from the board and said he was not removed for expressing dissent. Further, while the statement acknowledged that the U.S. Department of Education has placed Johnson C. Smith on its list of colleges under heightened financial scrutiny, the statement said the university was financially sound and was being judged that way by the department and its accreditor.
State Representative John Bel Edwards (at right), a Democrat, on Saturday defeated U.S. Senator David Vitter, a Republican, in the Louisiana governor's race. Edwards has vowed to end a series of deep cuts the state has imposed on Louisiana's public colleges under Governor Bobby Jindal, a Republican. Edwards has also pledged to end "cuts and closure" discussions about solving the state's budget problems by closing or merging a public colleges, and to improve what he has called an "inferior" retirement system for faculty members. The Edwards higher education plan may be found here.
Moody's Investors Service is projecting weak growth -- 2 to 3 percent -- in net tuition revenue in the next year. Such growth is a key indicator of financial health for many colleges and universities. In a report released Thursday, Moody's said that these levels are close to the inflationary expense increases faced by colleges, ending many years in which net tuition rates increased at higher levels.
Moody's said net tuition revenue remains "muted" for most of the sector because "a focus on affordability, flat or declining enrollment, and state-imposed tuition limits" restricts institutions' ability or willingness to raise tuition
The report found that first-year tuition discounting is nearing 50 percent for many private universities, although the most highly rated universities continue to maintain stronger pricing power than the sector as a whole. Conversely, Moody's found that private colleges with regional, instead of national, brands -- particularly in areas of the country where the number of high school graduates is declining -- have the least pricing power.
Lower enrollment levels are also contributing to lower tuition revenue growth at colleges and universities. Moody's found that 40 percent of universities estimate lower total enrollment for 2015 compared to 2010.