Readers Respond: How to Know a Sinking Ship When You See One

Yesterday’s post was a response to a reader who wanted to know whether the college from which she was considering a job offer was doing a good job of coming to terms with enrollment issues. In other words, she didn’t want to board a sinking ship. I offered a few thoughts on how to tell and asked my wise and worldly readers how they could assess a college’s fiscal health from the outside.

My wise and worldly readers rose to the challenge! I’m constantly grateful to have such thoughtful and generous readers.

Some highlights, with commentary:

“There are also questions of the gut that are important to ask. Do I feel like I belong here? What is pulling me towards this opportunity?”

Yes. Many years ago, I went on an interview in which it became obvious in the first five minutes that the position and I didn’t fit. From the outside, I couldn’t tell, but once there it was unmistakable. Bullet dodged.

“Ask people what keeps them up at night regarding the college. Those answers are telling.”

Yes. The presence of fear isn’t necessarily a deal breaker; the issue is whether it’s fear of the right things, and whether that fear motivates coming to grips with the situation or just leads to toxicity.

“If recent, the accreditation self-study and external report will help.”

Honestly, I’m embarrassed that I didn’t mention these. Yes, of course.

“Read 990 filings … they can [show] declining capital, heavy reliance on one admissions company, and more.”

If you see a long-term pattern of funding operations through reserve or endowment draws, that’s a big red flag. As the saying goes, unsustainable trends won’t be.

“Debt statements, if the college has issued bonds, can be found on EMMA (Electronic Municipal Market Access), which is provided by the Municipal Securities Rulemaking Board.”

At the risk of seeming clueless, I had never heard of EMMA. It sounds useful.

“Look for heavy recent turnover among senior leadership (president, board, VPs).”

Qualifier: sometimes new presidents start with purges. I’m not a fan of that strategy -- I don’t take Stalin as a role model -- but it happens. That said, if the turnover is constant, there’s probably a reason.

“Declarations of financial exigency, if any.”

Yup.

“The usual googling.”

Well, yes.

“People who work at nearby colleges.”

I like this one a lot. Although we think of colleges as cosmopolitan, and they can be, they’re also part of thick local ecosystems. When I worked at Holyoke, I heard a lot about Elms College and Westfield State University; at Brookdale, I hear a lot about Monmouth and Rutgers Universities. People know people. As with any grapevine, you have to decide how to weigh what you learn, but it can be enlightening.

Obviously, any final decision is the result of all sorts of idiosyncratic factors; there may be times when it’s worth ignoring the red flags and going for it. But at least you’ll be able to weigh the options more accurately.

Thanks again to my wise and worldly readers! You make this writer proud.