Saint Paul's College, a historically black institution in Virginia founded in 1888, will close at the end of this month. While college officials did not respond to reports over the weekend of an imminent closure, the Associated Press reported that the Southern Association of Colleges and Schools confirmed that it had been formally notified by the college of plans to close. The college has been in danger of closure since SACS announced a year ago that it was stripping the college of accreditation, making its students ineligible for federal aid. There had been some hope that the college would be rescued by merging with Saint Augustine's College, a historically black college in North Carolina. Both institutions were Both founded by the Episcopal Church. But last month, Saint Augustine's announced that it did not consider that plan viable.
A new paper sponsored by several divestment advocacy groups and written by the Tellus Institute, a think tank that works on issues of sustainability, attempts to chart a course for institutions to follow in order to divest fossil fuel holdings from their endowments and overcome administrators' objections that divestment would be too costly and onerous. In the past few months, several university governing boards and endowments have become the target of a coordinated national campaign, which most wealthy institutions have so far resisted.
In the paper, author Josh Humphreys, a fellow at the Tellus Institute, lays out a three-step path of freezing and divesting investments in coal companies, investing in renewable energy companies and "strategic reallocation across all asset classes in order to manage climate risk and embrace sustainable opportunities in a holistic way." The paper does not present any new calculations on the potential costs or benefits of divestment, instead relying on previous works, though it does express a belief that colleges that divest will likely see higher returns than institutions that continue to invest in fossil fuels.
Student services employees at Evergreen State College went on strike Tuesday, The Olympian reported. The union and the administration differ on salaries and procedures for firing employees. Some faculty members moved classes off campus to avoid crossing picket lines.
Faculty leaders at Marshall University are raising questions about athletic spending, particularly in light of budget cuts to academic programs, The Herald-Dispatch reported. Faculty members say that they have been promised for years that athletics would become self-supporting, but that it remains a serious drain on funds. Last year, the athletics budget was nearly $25 million, and 46 percent of that was financed through student fees or direct university support. Professors are asking why those funds shouldn't be used to minimize academic cuts. Pamela Mulder, a psychology professor, told the newspaper that athletics was helping "very few people and not remotely connected to the physical well-being of our overall student body." David Steele, Marshall's associate athletics director, said that the university spends less on athletics than many of its peers. He added: "We're part of the institution, and we have to work together to make it work."
Colleges have faced increased pressure in the last year from student and environment activists to sell off investments in fossil fuel companies, but most colleges that have acted on those requests have very small endowments, and relatively few such investments to start with. Brown University (which has a substantial endowment) on Friday announced that its board had discussed but not voted on the recommendation of the Advisory Committee on Corporate Responsibility in Investment Policies that the university sell holdings in 15 companies that mine or burn coal. A university statement said that no formal action was taken on the advisory panel's report.
A Brown statement said: "During the business meeting of the corporation, members asked the university to identify ways to work with students, faculty, staff, peer institutions, and other strategic partners to develop a robust response to climate change and to assume a greater leadership role on the issue of CO2 emissions. Corporation action on the issue of divestment was not expected at this meeting, and the corporation confirmed that the complexity of the divestment issue warrants further discussion before responding to the ACCRIP’s recommendation."
Wisconsin Governor Scott Walker, a Republican, is seeking the right to sell buildings on University of Wisconsin campuses, as well as buildings owned by other units of the state, The Milwaukee Journal Sentinelreported. Some legislators and student groups are opposing the plan. They note that, in the case of some facilities, buildings were paid for by student fees with the understanding that they would be used for students. Further, the governor's plan does not require that proceeds from any sales go to the university, so a campus could lose control of a building and gain no revenue.
Swarthmore, under pressure to divest from fossil fuels, puts the price tag at about $200 million over 10 years, saying removing its investments would require a fundamental shift in how the college manages its endowment.
Individuals unhappy with Cooper Union's recent decision to end its 111-year practice of providing a full-tuition scholarship to all students issued a fake press release Tuesday as MetLife, which lent the university $175 million in 2006 to finance construction of a new academic building, promising to forgive the loan on the condition that the university remain free.
THE FAKE PRESS RELEASE:
METLIFE FORGIVES $175 MILLION LOAN TO COOPER UNION, KEEPS TUITION “FREE AS AIR AND WATER.”
NEW YORK - May 14, 2013 - MetLife, Inc. (NYSE: MET) announced today that it will conditionally forgive a $175 million loan made in 2006 to the Cooper Union, a treasured New York institution currently consumed by a financial crisis.
Cooper’s interest-only payments to date, which amount to approximately 72 million dollars, will be applied to the total, netting a total forgiveness of $103 million dollars. MetLife’s decision will allow the Cooper Union to preserve its 154 year meritocratic tradition of tuition free education. “Cooper occupies a special place in the soul of New York City, the city which MetLife calls home.” said MetLife CEO Steven Kandarian, “We had to do something.”
“The actions of the Free Cooper Union students who have occupied President Jamshed Bharucha’s office have inspired us to reject the inevitability of this situation. MetLife believes in the transformational power of capital to catalyze growth and increase opportunity. And we take that responsibility seriously; we see ourselves as stewards, in a sense, of our investments. So, though we don’t take lightly the moral hazard which today’s action represents, we didn’t feel we had any choice but to protect the legacy of empowerment Cooper Union embodies.”
“The institution is simply too big to fail,” Kandarian continued, “metaphorically speaking, of course.”
The Cooper Union for the Advancement of Science and Art was founded by industrialist Peter Cooper in 1859. It’s mission reflects it’s founder’s fundamental belief that an education “equal to the best” should be accessible to those who qualify, independent of their race, religion, sex, wealth or social status, and should be “open and free to all”.
In recent years the board of trustees has pursued an expansionist agenda of which the ill-advised 2006 loan is a part. The loan, taken in part to fund an exorbitant new, $111.6 million “landmark” building by Thom Mayne of Morphosis Architecture which a capital campaign had failed to adequately fund, requires annual interest-only payments of approximately $10.3 million, the majority of Cooper’s operating budget shortfall. In addition, a majority of Cooper’s managed endowment assets were recklessly invested in hedge funds which have diminished the endowment substantially since 2006. In light of these facts, in April 2013 Board of Trustees Chairman Mark Epstein announced that the Board had approved a plan to reduce the full tuition scholarship by half, ending a 154 year tradition and effectively abandoning the Cooper Union’s founding principles.
“In retrospect,” said Kandarian, “when we were offered Cooper’s ‘golden goose’ as collateral for a risky loan, we should have passed.”
MetLife’s actions are intended to stabilize the institution and allow it to continue offering a top quality education which is “as free as water and air,” however they should not be mistaken for a panacea. “These are drastic measures,” said Kandarian, “and as such they are conditional on Cooper’s continued status as a top quality tuition free college. The tuition free model is an essential part of the character of the institution and it’s stakeholders understand that without it the school will be unable to count on the high quality student body to which it is accustomed. The Free Cooper Union students and their faculty and alumni supporters are fighting for this unique, and uniquely American, institution.”
“My concern,” continued Kandarian, “ is that the current President [Jamshed Bharucha] and Board of Trustees do not appear to share in this vision. If Cooper is truly to emerge from this mess, they will need some new faces.”
MetLife continues to be the largest portfolio lender in the insurance industry with $43.1 billion in commercial mortgages outstanding at year end 2012.
“MetLife was a very active lender domestically and internationally in 2012, as we continued to focus on top quality properties in major markets,” said Robert Merck, global head of MetLife Real Estate Investors. “Our strategy for growth is based on prudent risk management and a long-term approach that enables us to execute quickly, process large transactions and provide our customers with world-class service.”
St. Mary's College of Maryland, a public liberal arts college, is likely to face a budget shortfall of about $3.5 million after commitments from incoming freshmen came in short of what the college expected, The Washington Post reported. Aiming for a class of about 470, the university has received commitments from only about 360 students so far. Administrators said the college is trying to attract more applicants and enroll students off the waitlist, as well as figure out how to cope with the lost tuition revenue. Administrators said they are not yet sure why the college saw a decrease in commitments after receiving a 14 percent increase in applications, but are looking into it.