institutionalfinance

$140 Million Gift to 3 Private Universities in N.C.

Wake Forest University, Queens University of Charlotte and Wingate University will collectively receive more than $140 million under a wealthy donor’s bequest.

The three private universities in North Carolina will use the money for scholarships. About half of the gift, more than $70 million, will go to Wake Forest, the universities announced Monday. The remaining portion will be equally divided between Queens and Wingate, meaning each will receive over $35 million. The gifts are the largest made by an individual to each of the three universities.

Charlotte businessman and attorney Porter Byrum left the money to the universities. Byrum, who graduated from the Wake Forest University School of Law in 1942, served on the university's law Board of Visitors and served on the Board of Trustees at Wingate. He died in March at age 96.

His giving to the three universities now totals more than $235 million and includes a Charlotte shopping center. Several buildings on the universities' campuses bear his name, and Wingate’s school of business is also named after Byrum. (This paragraph has been updated to note that Byrum's giving to the universities, including his bequest, totals more than $235 million.)

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Stevens Names Building After Gianforte Family

In June, Greg Gianforte pleaded guilty to a misdemeanor assault charge after he was accused of body slamming a reporter the night before the Republican won a House of Representatives seat in a Montana special election.

Now, Stevens Institute of Technology in Hoboken, N.J. says it will no longer name a building directly for Gianforte, an alumnus who donated millions to its construction. The institute will instead name the building after the Gianforte family.

The institute’s first new academic building in over a decade had been slated to be named the Gianforte Academic Center after Greg Gianforte and his wife Susan gave $20 million toward the project through a charitable trust. But opponents criticized the name because of Greg Gianforte’s long history of controversial socially conservative views and actions, which includes funding a creationist museum in Montana, lobbying against an LGBT anti-discrimination ordinance in Bozeman, Mont., and donating to organizations opposed to abortion and same-sex marriage.

Trustees appointed a committee to consider the building’s name in June. It was charged with evaluating feedback from various constituencies, including faculty, staff, students and alumni.

Trustees then decided this week that the building will be named the Gianforte Family Academic Center. Greg and Susan Gianforte agreed to the change.

“This name acknowledges the principal legacy of Mr. Gianforte from an institutional perspective as a successful technology entrepreneur and loyal and generous alumnus,” said a statement from trustees. “It also recognizes others in the Gianforte family including: Susan Gianforte, a Cornell engineer with an MBA from New York University, who has worked in partnership with Mr. Gianforte on RightNow Technologies and Brightwork Development Inc.; and Mr. Gianforte’s mother Dale and father Frank Gianforte ‘58, a mechanical engineer who worked in the aerospace industry before launching a career in real estate development and management.”

The president of the institute, Nariman Farvardin, praised the decision in another statement Thursday.

“I am extremely pleased that the Board of Trustees and Mr. Gianforte reached this alternative solution, as it demonstrates that both parties have kept the best interests of Stevens -- and, in particular, the best interests of our students and the education we deliver to them -- in mind in resolving an issue that has caused concern to members our campus,” he said “The Gianforte gifts will have a transformational impact for Stevens, providing support for our planned, state-of-the-art academic and research building scheduled to open in Fall 2019. This gift also comes to Stevens without any requirements or restrictions.  As a charitable organization, Stevens would never endorse or promote any political, religious, or other position by a donor or otherwise. Stevens’ only obligation in accepting this gift is to build the academic center.”

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Report Looks at Mergers' Benefits and Costs

Mergers between colleges should be part of a long-term strategic plan and not driven solely by narrow goals like cost savings or growth for growth’s sake, according to a new report released Thursday by the TIAA Institute.

The report also looks at details needed for successful mergers. Its findings include the following:

  • The decision-making process around mergers is almost always costly and painful.
  • Mergers shouldn’t be considered only in difficult situations when institutions have low levels of resources or assets available.
  • Opportunities for financial savings, leveraging scale and re-energizing stakeholders exist with mergers.
  • Costs include branding, opportunity costs and the expenditures of political capital.
  • Costs are immediate in mergers, but gains are delayed.

Seven key elements for mergers are also listed: a compelling unifying vision, a committed and understanding governing body, the right leadership, an appropriate sense of urgency, a strong system of project management, a robust communication plan and sufficient dedicated resources.

The report comes at a time of high interest in merger-and-acquisition activity across the higher education spectrum. Several institutions have announced merger plans recently. Boston University and Wheelock College are in merger talks, they announced in August. In North Carolina, Piedmont International University and John Wesley University are planning a merger next year, they said this month.

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DeVos: Borrower-Defense Rule Offered ‘Free Money’

Education Secretary Betsy DeVos's comments that Obama administration regulations written to protect student borrowers entitled anyone who sought relief to "free money" are drawing fire.

The so-called borrower-defense rule was set to take effect July 1. But DeVos in June said she would block the rule and pursue a rewrite through a bureaucratic process known as negotiated rule making.

Speaking at the Mackinac Republican Leadership Conference Friday, DeVos defended her actions and said the rule was "rushed" through without review by Congress, according to reporting on her remarks by The Detroit News. She also said the rule could have cost the federal government $17 billion -- a reference to estimated costs over 10 years. “While students should have protections from predatory practices, schools and taxpayers should also be treated fairly as well,” she said. “Under the previous rules, all one had to do was raise his or her hands to be entitled to so-called free money.”

Democratic attorneys general from 18 states and the District of Columbia have sued DeVos, seeking to have the Obama-era rule enforced. Meanwhile, more than 65,000 borrower-defense claims made under previously existing regulations are pending review. But a Department of Education official told Democratic lawmakers in July that no claims had been reviewed since the beginning of the Trump administration.

Ben Miller, the senior director for postsecondary education at the Center for American Progress, said the comments from the secretary showed an inability to express basic levels of empathy for suffering borrowers. "Even a cursory review of Obama policies on this matter would reveal a structured, lengthy process for forgiveness," he said.

Senator Patty Murray, the ranking Democrat on the Senate education committee, said in a statement that it was telling that DeVos would blame students who were victims of fraud over for-profit colleges. "Secretary DeVos needs to stop listening to the for-profit and corporate executives she hired at the Department of Education and start providing the legally required relief to the students who have been cheated out of their education and savings," Murray said.

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UC President to Pay Half of Security Costs for Shapiro, Yiannopoulos

The University of California Office of the President will pay half of the cost of security for conservative speakers at UC, Berkeley, this month.

That includes $300,000 of the $600,000 bill for security for conservative commentator Ben Shapiro’s appearance on Sept. 14, during which Berkeley regulated access to much of campus. It also includes an as-yet-undetermined, but likely greater, amount for security when provocateur Milo Yiannopoulos and other conservatives hold a planned Free Speech Week at Berkeley.

Normally, an individual campus would be responsible for paying security costs associated with hosting a speaker. But the extraordinary cost associated with the controversial appearances at the free speech focal point of Berkeley led UC President Janet Napolitano to help foot the bill, she said Wednesday in an interview with reporters in Washington.

The speakers are not appearing in order to have an academic debate but instead want to put forth “controversial and noxious ideas,” Napolitano said. She went on to call colleges and universities places where noxious ideas are exposed but also admitted institutions are in a difficult position, stuck between protecting free speech rights while also protecting the safety and security of students and staff.

“This will be a test for Berkeley, no doubt,” said Napolitano, a former Homeland Security secretary in the Obama administration. She has communicated with Berkeley’s chancellor and chief of police to run through security plans, she said.

Napolitano also discussed the Deferred Action for Childhood Arrivals program, Education Secretary Betsy DeVos and federal guidance on campus sexual assault cases during a wide-ranging interview.

The UC system estimates it enrolls about 4,000 undocumented students, most of whom have protections under DACA. Napolitano helped to put the DACA in place when she was Homeland Security secretary, and the UC system filed a lawsuit trying to stop President Trump from repealing the program, which allows undocumented immigrants brought to the U.S. as children to apply for temporary protection from deportation and authorization to work. The UC system is urging students who are eligible to apply for renewal of their DACA protection before a deadline early in October, and it is raising money to pay for their renewal fees, Napolitano said.

Napolitano met with DeVos for about 30 minutes earlier this year shortly after Trump’s “skinny budget” was unveiled.

“I got the impression that her learning curve where higher ed is concerned is quite vertical,” Napolitano said, adding that she was being descriptive, not critical, and also recalling a conversation in which the new education secretary required an explanation of Supplemental Educational Opportunity Grants, called SEOG.

Napolitano does not anticipate any change away from the UC system using a “preponderance of evidence” standard for resolving cases of sexual assault. She has previously criticized Trump administration plans to replace Obama administration guidance on campus adjudication of rape cases, noting that California enacted a law requiring that evidentiary standard for higher education institutions receiving state money.

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John Wesley Merging Into Piedmont International

Two Christian colleges in North Carolina, Piedmont International University and John Wesley University, plan to merge next year -- three years after Piedmont completed another merger.

Piedmont, located in Winston-Salem, enrolls 750 students, the Winston-Salem Journal reported. John Wesley, located in High Point, enrolls 150. Administrators consider the two institutions the largest evangelical universities in the Piedmont Triad in the north-central part of North Carolina.

The merged university would keep Piedmont’s name and have its chapel and school of leadership named after John Wesley, who helped to found Methodism in the 1700s. University leaders said both institutions are stable financially but will have more influence together. John Wesley University brings a business management school and nursing partnership to the merger, while Piedmont has been increasing enrollment and has strong online programs, administrators told the Winston-Salem Journal.

Trustees at the two institutions have approved the merger. It’s expected to take effect June 1, provided the Transnational Association of Christian Colleges and Schools gives approval.

The merger would come about three years after Piedmont absorbed a financially struggling Christian college, Tennessee Temple University in Chattanooga, in May of 2015. Some Tennessee Temple students enrolled at Piedmont, and it hired some of Tennessee Temple’s faculty members and administrators.

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Lynn University Will Buy Digital Media Arts College

Lynn University said Wednesday it has reached a deal to buy Digital Media Arts College, a for-profit college located about a mile away from its main campus in Boca Raton, Fla.

The asset sale will have Lynn, a 3,000-student nonprofit university, acquiring the for-profit Digital Media Arts College, which has about 300 students. After the deal closes, Lynn plans to offer Digital Media Arts College programs and combine them with its own, turning its College of International Communication into the Eugene M. and Christine E. Lynn College of Communication and Design. The university will also take on roughly 34,000 square feet of space about a mile from its main campus, which will be used for studios and offices for faculty and staff.

A teach-out provision will be offered for Digital Media Arts College students, and they will be able to continue in their programs without interruption or added cost. They will also be able to transfer to Lynn. Digital Media Arts College administrators will stop managing operations as of Oct. 19, however.

Lynn touted additional student services it can offer Digital Media Arts College students, including student housing and a career center.

Like many other for-profit institutions, Digital Media Arts College lost its accreditor and was at risk of its students losing access to federal financial aid after the Obama administration revoked its recognition of the Accrediting Council for Independent Colleges and Schools in December 2016. Digital Media Arts College had until June 2018 to find a new accreditor. It had applied to the Accrediting Commission of Career Schools and Colleges.

Lynn’s purchase must still receive approval from regulators. The university is not disclosing financial details other than that payments will be made over several years. University officials expect additional revenue from the acquisition to offset costs.

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Session takes an early look at results from FAFSA filing changes

Students filed earlier and universities mailed awards earlier, but some ran into snags with setting tuition.

Anonymous $75 Million Gift for Kenyon

Kenyon College announced Friday an anonymous $75 million gift, the largest in the history of the college. The funds will be used for a new library and academic quadrangle.

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New Site on Higher Education Finance

Nate Johnson, a consultant and expert on higher education finance, has created a new website that seeks to spark a broader discussion about the sources of funding for higher education and their implications for low-income students.

The Bill & Melinda Gates Foundation supported the project, which is dubbed Understanding Higher Education Finance and features a briefing report. Johnson said the project covers the full range of financial sources that the nation's postsecondary system depends upon, including state appropriations, institutions themselves, students' parents and state and federal tax expenditures. "I'd like to have people think about it as more of an ecosystem," he said, rather than as discrete funding sources.

Competing priorities help shape much of higher education's revenue, according to the site.

"The result is a set of incentives and a competitive economic environment that makes it difficult for low-income students and the institutions that serve them to thrive," the report said.

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