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Excess credit hour policies increase student debt

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A new research paper finds that excess credit hour policies don’t lead to completion, just more student debt.

Shuttered Military College Can't Pay Faculty

Wentworth Military Academy and College, now defunct, reportedly can’t afford to pay its former faculty members, as it previously promised. Michael Lierman, college president, told faculty members via email in mid-May that they’d continue being paid until the end of their contracts, and the campus closed two weeks later, according to the Associated Press. But a campus caretaker emailed instructors at the end of June, saying that Wentworth doesn’t have the money to make additional salary payments now. The academy’s board hopes to liquidate campus assets and collect unpaid tuition to honor the duration of faculty contracts. An attorney for the Missouri college, which dates back to 1880, did not respond to requests for comment.

Wentworth announced it was closing in April, citing lowered enrollments, rising costs and an aging campus, the AP reported. Some 220 cadets were boarding there at the time, most of them two-year college students. Several hundred civilians also were enrolled in college courses there. The Higher Learning Commission placed Wentworth on ongoing probation in 2015 over concerns about finances and resources to support academic programs.

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Revamp Governance but Don’t Close Universities, Pennsylvania System Told

The Pennsylvania State System of Higher Education should not close, merge or spin off any of its 14 state-owned universities, according to a much-awaited set of consultants’ recommendations presented to its Board of Governors Wednesday.

But the recommendations did call for wide-ranging changes to the way the system is governed and higher education policy in Pennsylvania. The state should amend the system’s founding legislation to replace its Board of Governors with a Board of Regents and change its governance structure to revamp the relationships between university leaders and system leaders, according to recommendations.

Notably, the recommendations also called for Pennsylvania to create a statewide entity to coordinate policy and make funding recommendations across postsecondary institutions. No such entity exists currently, leading to criticism that the state does not pursue a consistent strategy across its many higher education institutions. In addition to the PASSHE system, Pennsylvania also has state-related institutions like Pennsylvania State University and a scattered set of local community colleges.

“The way the system is now structured and the way decision authority is allocated does not work when you’re faced with the current set of challenges,” said Dennis Jones, the president emeritus of the National Center for Higher Education Management Systems, the firm that created the recommendations after months of review. Jones delivered a presentation on the firm’s findings to the Board of Governors Wednesday. A full report will be available next week.

Jones delivered an at times blistering assessment of the state system, first laying out how it is under intense pressure from falling enrollment and constrained state support. Enrollment varies from campus to campus, but across the system, enrollment has gone up among students from high-income families, remained relatively stable for students from low-income families and dropped for students from middle-income families. The system enrolls a large number of students from low-income families and is in many cases their primary college option.

“You can’t keep raising tuition to cover the gap because students’ ability to pay just isn’t there, and more importantly it’s going to be easy to reach the point where you drive down enrollment,” Jones said.

Pennsylvania’s population trends make it clear that the number of high school graduates is expected to shrink. Yet the system has not cut expenditures to keep up with revenue that is no longer increasing. It has also largely ignored adult students.

“In this state, the mind-set very much is that college is for recent high school graduates, and everything you do, particularly your institutions, focuses on residential full-time high school graduates,” Jones said. “That’s a culture in your institutions, and it constrains in many ways your ability to do anything different.”

Other recommendations include changing the focus of the system’s Office of the Chancellor, reconfiguring universities -- possibly with a consortium model geared toward sharing system resources -- adopting a strategic financing model, striking better collective bargaining agreements in the future, committing to a shared governance process with faculty, and considering offering early retirement incentives to allow institutions to adjust staffing levels to match enrollment. Some of those changes would require legislative approval.

Closing or merging institutions within Pennsylvania’s state system has long been discussed. Officials referenced the possibility when they announced the strategic review that NCHEMS carried out and presented Wednesday. The proposition is difficult, however, in part because many of the institutions are isolated geographically. Those that are financially weakest also enroll students who are members of underserved populations or who would not have other local college options in Pennsylvania’s unbalanced patchwork of college campuses.

The president of the Association of Pennsylvania State College and University Faculties, a union representing faculty members and coaches in the state system, called the recommendations "a bit vague" in a statement. Union leaders were to meet with the NCHEMS team Wednesday night.

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Cornell Ends Contract With Nike

Cornell University has announced that it is ending its contract with Nike, saying the athletic apparel company was unwilling to sign a "standard" agreement pledging to follow a code of conduct for its workers, a code developed and endorsed by many colleges and universities. If Nike will agree to the code, Cornell is willing to resume discussions about a continued relationship. Nike says it is using its own code.

A Nike statement to The Ithaca Journal said that the company was "disappointed" by the Cornell decision. "We are deeply committed to protecting workers across our supply chain and have worked tirelessly to raise standards across the industry," the statement said.

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Illinois leaders re-evaluate higher education after first state budget in two years

College and university leaders are happy to see the first state budget in two years, but many prepare for less state support in the future and confront lingering impacts of cuts and uncertainty.

Year-Round Pell Could Help Community Colleges

The resumption of year-round Pell Grants, scheduled for July, could help offset the enrollment declines many community colleges are experiencing, according to Moody's Investors Service. The restored grant eligibility, often called Summer Pell, allows students to receive up to 150 percent of a typical Pell award amount during the course of a year.

Nationwide, enrollments at community colleges have been slumping for several years, due in part to the recovering economy. When the U.S. Congress in 2011 discontinued the availability of year-round Pell Grants -- with the Obama administration's backing -- the average grant amount per recipient fell by 11 percent, Moody's said. The return of year-round grants will make it more affordable for community college students to enroll throughout the year, which Moody's said would accelerate degree completion and bolster enrollment.

"Although we do not anticipate substantial enrollment increases from the Pell expansion," said Moody's, "the incremental additional credits that summer Pell Grant student will take will help to offset some of the countercyclical enrollment declines due to improving employment opportunities and economic conditions in most states."

Bar graph: Community college enrollment continues to decline due to improving economic conditions. Graph shows enrollment of 5.75 million in 2006, increasing to nearly seven million in 2010, then decreasing to just over six million in 2015.

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Large, Growing Losses at Bethune-Cookman

Bethune-Cookman University lost nearly $18 million in the fiscal year that ended in June 2016, more than 12 times the loss of the previous year, reported The Daytona Beach News-Journal, based on tax records filed by the private, historically black college. During the year covered by the most recent tax report, salaries increased by nearly $8 million to $49.2 million. Further, the 13 top leaders' salaries averaged $207,000, compared to the previous year, when there were only eight executives earning an average of $175,000. Investments took an 11 percent loss for the year, and the college borrowed $7 million from its endowment, about 13 percent of the total.

Joe Petrock, chairman of the college's board, released a statement to the newspaper: “As you know, Bethune-Cookman University is a private educational corporation governed by a Board of Trustees. Like any other private company, we are not required nor is it our policy to discuss our fiscal or other affairs in the public. As a board, we are focused on making B-CU a top-ranked university, doing what is best for our students and the university at all times. We are always working diligently to address and improve our financial matters.”

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Westminster Choir College Backers Sue Rider

Supporters of Westminster Choir College have filed a class action lawsuit in federal court arguing Rider University cannot legally sell the choir college’s campus in Princeton, N.J.

The filing marks an escalation in a battle that has been playing out for months between Rider and a group called the Coalition to Save Westminster Choir College in Princeton Inc. Facing budget deficits, Rider has explored moving Westminster and selling the college and its campus, which is located several miles away from Rider’s main location in Lawrenceville, N.J. That sparked resistance from faculty members, students and alumni who believe Rider is improperly trying to find a way to make money off a financially healthy Westminster in order to make up for its own financial deficiencies.

The Coalition to Save Westminster Choir College in Princeton has proposed spinning the choir college off from the university. But negotiations did not materialize, according to the coalition’s president, Constance Fee. As a result, the group is turning to legal action.

The lawsuit, filed Tuesday, says Rider has considered selling the Westminster campus to real estate developers. But it argues Rider does not have the right to sell the campus under a 1991 agreement. Westminster merged into Rider under the agreement, which calls for Rider to continue Westminster’s mission and ensure its separate identity, the lawsuit says.

The class action suit was filed in U.S. District Court for the Southern District of New York on behalf of former Westminster board members, current students, their parents, past students and donors. It alleges breach of contract and asks for a judgment that would allow Westminster to operate as a separate nonprofit higher education institution. Alternately, it asks the court to direct Rider to find another entity to operate Westminster on its Princeton campus. It also asks that Rider be barred from selling the Westminster campus to any group that will not keep the choir college in its current location.

Rider disagrees with assertions of the lawsuit and does not believe it serves the best interests of the choir college, said a university spokeswoman, Kristine Brown, in a statement. The university believes it has a strong defense and will prevail.

“As we’ve told the Westminster community, we firmly believe that the choir college’s legacy can best be achieved with an institution that is better positioned to make the necessary investments,” she said. “Working closely with the Board of Trustees and an outside firm, we’ve made significant progress on our search to find a new institution willing to acquire Westminster Choir College and continue its rich tradition.”

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Hickey College Will Shut Down

Hickey College, a small for-profit career institution located in St. Louis, will shut down due to low enrollment, the St. Louis Post-Dispatch reported.

The college, founded in 1933, offers degrees and certificates in accounting, culinary arts and graphic design, among other programs. It enrolls 391 students, according to federal data. Hickey is overseen by the Accrediting Council for Independent Colleges and Schools, a national accreditor that the Obama administration decided to terminate last year.

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Some Employees Questioned Louisville Spending

This month has not been kind to the University of Louisville.

A June 8 report detailed unbudgeted spending, unapproved activities and endowment losses at the university’s foundation. Just a week later, the NCAA announced penalties stemming from a prostitution scandal involving the university’s men’s basketball team’s past recruiting.

Some are taking note, however, of instances when officials raised red flags about the foundation’s behavior. The Courier-Journal of Louisville highlighted the case of one official who wondered whether she was being paid too much. It’s detailed in the report on the foundation.

In a memo dated Feb. 1, 2012, the university’s provost and executive vice president, Shirley Willihnganz, worried she was being overcompensated.

“I don’t remember anything being in the contract about additional $50,000 annual contributions from 2010, [2011] and [2012],” she wrote.

“Obviously if the foundation and president want to give me this, I’ll be grateful,” she wrote. “But I also don’t want to take advantage if this was a mistake … and if I just misread everything and all is well, will be very happy to be wrong.”

She later received a reply from Kathleen Smith, at the time the chief of staff for James Ramsey, who was president of both the university and its foundation before being ousted last year. Smith said that Willihnganz had a good point but that the ambiguity was deliberate and in the employee’s favor. Smith said $50,000 was included in an amendment to Willihnganz’s contract.

“Jim needs you, as does the university, as his provost,” Smith wrote.

The report listed total compensation for Willihnganz between 2010 and 2016 at almost $6.8 million. She spent 13 years as provost before in February 2015 announcing she was leaving. At the time, the university said her salary was $342,694. But the Courier-Journal reported she received $1.8 million in deferred compensation from the foundation in 2012.

Smith’s lawyer told the Courier-Journal the email exchange was a discussion about contract terms, not about whether Willihnganz was paid too much in “absolute terms.”

The lawyer, Ann Oldfather, went on to tell the newspaper that the audit made incorrect suggestions.

“They made everything that was a business judgment call sound like a scheme to rip off the foundation,” Oldfather said, according to the newspaper.

The Courier-Journal report on the foundation also described a September 2013 warning from Justin Ruhl, director of accounting operations, that “off the top” spending from the endowment could cause problems.

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