Liberal Arts, Post-Recession

With its discount rate rising, Augustana makes adjustments in curriculum and considers whether the best way to preserve a college's mission is to broaden it.
October 15, 2010

Augustana College has never been a pure liberal arts institution.

The Illinois college has long had programs like education and business amid the traditional liberal arts disciplines. But those programs have been relatively few in number and, faculty members say, have never defined the institution's ethos, which is solidly in the liberal arts tradition. The college is proud of its general education program, of its study abroad offerings, and of its emphasis on critical thinking and building of community, not just on job preparation.

Now, in the face of the economic downturn, the college is making some adjustments -- which Steven C. Bahls, its president, calls the "post-recession strategic plan" for a liberal arts college. That means several new majors focused on pre-professional interests. With new majors, Bahls says the college may need, over time, to move away from a tradition (rare among American colleges) of paying faculty members equivalent salaries across disciplines; the plan also means symbolic and real steps to be sure that the college can attract diverse students, beyond its historic (and shrinking) base of Swedish Lutheran families.

No one will mistake Augustana for a vocational institute. Even with the changes, this is a college that offers numerous modern foreign languages as well as the classics, a college that, true to its immigrant roots, has a Scandinavian major and instruction in Swedish, a college with majors in philosophy and art history and theater at a time when such programs are being threatened at much larger and wealthier institutions.

But the changes are nonetheless significant and, to some, jarring. The art department has added a major in graphic design, physics now has an engineering track, and the college has added a second business major -- this one in international business. While the faculty has signed off on the additional majors, some longtime professors are dubious of the changes -- and many in traditional liberal arts fields are worried about the likely impact on faculty salaries down the road.

Bahls insists that he doesn't want Augustana to ever be identified as anything but a liberal arts college, but he also sees it as essential to colleges like Augustana that they cast a wider net for students -- including those who want (or whose parents want) more programs that reflect a career path. Quite aside from the philosophical debates over the role of higher education, Bahls says that there is ultimately no choice for colleges like Augustana but to change. "I believe the world is different now" than it was just a few years ago, before the economic downturn, he said. A few years back, he "thought the economic model for liberal arts colleges would break down" at some point in the future, "but it's breaking down right now."

By many measures, of course, and Bahls would be the first to say this, Augustana is not only healthy but thriving. It has 2,500 students and balances its budget, and while its endowment lost about 20 percent of its pre-downturn value of $110 million, it is bouncing back. While private higher education is commonly associated with some of the wealthiest research universities and liberal arts colleges in the country, most of the 1,600 private colleges and universities in the United States are much more like Augustana than like Stanford or Carleton.

Endowments have never been large enough at these institutions to ease the dependency on tuition; enrollments have never been so large as to provide great economies of scale; student to faculty ratios are low; and history has landed these colleges all over, many times in locations that don't shout out "college town" to high school seniors looking for excitement. (Augustana is in Rock Island, Ill., roughly midway between Chicago and Des Moines.)

So why the concern?

Like many private colleges that don't have big-time name recognition, Augustana has been looking for ways to bolster its attractiveness to students, and was doing so well before the economic downturn hit with full force. It created a program that would finance students' junior- or senior-year study abroad, internships, or independent research projects, for example. When the downturn hit in the fall of 2008, the college committed itself to announcing tuition increases earlier in the year than had been the case, and to minimizing those increases.

Generally, the college is pleased with the results of these initiatives. But Bahls says they aren't enough. For him, the key indicator that the college must change is its discount rate, which has been going up -- in the past two years from 38 to 42 percent. That means that to fill its class (and the college was a few dozen short this year), the college is offering more aid (need-based and otherwise) and thus is bringing in less revenue than it would with a stable discount rate. While that increase is not at all shocking for similar colleges these days, and many institutions would be thrilled with that rate, Bahls notes that if it were to increase by 2 percentage points a year for the next 30 years, it would hit 100 percent. And while that's not going to happen, sustained increases of the sort that the college has been experiencing would quickly get the college's budget seriously out of balance.

The college has cut various costs -- contracting out more non-academic services and eliminating its magazine, for example. But Bahls says that the key to making the economics work is attracting more students who will want to go to Augustana badly enough that they won't need to be lured with big merit aid packages. That means building "buzz" about the quality of the academics, and it means having the majors that more students are demanding (another recent addition is environmental studies).

Private colleges that fail to build such buzz and to attract such students, he predicts, will face tough times. Two of Augustana's fellow Lutheran colleges provide ample evidence of the risks. Waldorf College, in Iowa, was sold to a for-profit university in 2009. Dana College, in Nebraska, died this year after its accreditor refused to transfer accreditation to a for-profit group that wanted to purchase the institution. Both of those colleges lacked the students or finances of Augustana for years, but they are far from being the only small private colleges struggling these days.

Bahls also says that colleges like Augustana need to push to broaden their student bodies. Seventeen percent of Augustana's students are from minority groups -- a figure that's unusually high for a largely white, rural area. Lutherans make up only about 20 percent of students, while Roman Catholic students now are almost twice that share, and a smattering of other faiths are represented as well.

Diversifying the student body means changes beyond the curriculum. For instance, last year was the first in which the baccalaureate service for graduating seniors included non-Christian prayers (representing Muslim and Jewish traditions). Bahls says the additions were well-received on the campus, but that he heard complaints from another group that attends the service: those observing the 50th anniversary of their graduations. For some of those alumni, who attended Augustana when the institution was overwhelmingly Lutheran, the changes were not welcome, but Bahls says the college will continue to include multiple faiths.

Holding On to Egalitarianism, For Now

While Bahls says he has no reservations about opening up the religious service to more faiths, there is another value of the college that he says will be more difficult to change. Augustana has long had a tradition of paying faculty members on similar scales by rank -- regardless of their discipline -- going against the norm in American higher education. Bahls says that he favors "keeping the egalitarian model as long as we can hire outstanding faculty," which the economic downturn has enabled the college to do.

He says there may be a little stretching on a few appointments, but that, by and large, the college hasn't deviated from its philosophy. But he thinks that there is no doubt that this will erode. "It's not sustainable for the next 10 years," he said. And while he applauds the way the faculty considered -- and approved -- the new majors and some of the changes the college has made, Bahls said that it will probably be "very hard to find consensus" from the faculty about the salary issue in the years ahead.

Not surprisingly, some of the biggest champions of the changes at Augustana are those faculty outside the traditional liberal arts. But many of them argue that programs are being constructed in ways that also support the liberal arts.

Craig V. VanSandt, who is chair of both business administration and international business, says that the impact of globalization is such that students want an international approach. So far, the program has attracted about 15-20 prospective majors, but it is just starting to be promoted and hasn't been around long enough to be attracting many new students to the college.

VanSandt notes that international business students will have an experience that is arguably more focused on the liberal arts than will business students. International business students will be required to study or work abroad and to take two years of a foreign language (as opposed to the requirement of a single year for students in the regular business major). They will also have requirements for "global perspectives" courses in fields such as sociology and political science. "Most of our students are straight from high school, and they arrive with exposure to international cultures fairly limited," he said, but they should leave with a broader base of knowledge that will make them more competitive job candidates.

Jason R. Peters, a professor of English, says he is of two minds on the changes. "I think a lot of liberal arts colleges are going to fail. I think we are going to see schools go belly-up, but some are going to survive, in part by getting students to come by offering these kinds of majors."

But at the same time, he says that there is a real cost for these shifts -- in the way people think about a college's purpose. "If you are teaching at a school that is bankrolled by business or pre-med, it's a different sort of thing from teaching at a college where there is a critical mass of people who are interested in becoming fuller human beings," he says. "And I really dislike talking about higher education as if it is a minor league to the job market."

And Peters said that he sees the idea of paying different salaries based on discipline as "seriously divisive" and one reason "to think very carefully" about expanding pre-professional majors. It's not about money per se, he says. "Many of us didn't get into this for money in the first place," he says. "But it's not good to see a pecking order among faculty established by market terms."

Peter J. Kivisto, professor of sociology, says he believes the faculty has been increasingly split in recent years about how pre-professional to go, and that Bahls and other administrators were trying to keep all sides happy -- at least until the economic downturn hit. He says administrators started to show "panic" and to "speak at faculty meetings about whether or not the 'high tuition, high discount' model was dead and about whether or not small private liberal arts colleges were an endangered species."

There was fear, he says, "that everyone in the Chicago suburbs was now going to send their kids to community colleges and then to public universities." He sees the new majors "as an act of desperation on the part of the administration" and he argues that Augustana is better off strengthening itself as a liberal arts institution. "Will these programs attract students to Augustana? To be honest, I don't know. However, if they do and if we become more professionally focused, it is to the detriment of the liberal arts. Of that I am certain."

Many liberal arts faculty are more supportive of the changes. David W. Crowe, chair of English, was chair of the Faculty Senate last year, as many of these shifts were being debated. "There was skepticism and questioning," he says, but there was also understanding of the need to consider some changes to strengthen the college's position. He says that the addition of creative writing to English has generated attention and enhanced student interest there; such additions, he thinks, can add to traditional fields.

To Crowe, "it's all a matter of degree," whether about adding some majors or even changing the salary structure a bit. "Departments have to live with the market, and in order to get good faculty in business they may have to be paid more," he says. The question is how much, and how the overall pool changes, he says.

As for the curriculum, Crowe says he'll be wanting to hear from admissions officers in a few years about the impact of the new programs in attracting students and bringing about the kinds of changes the college's leaders want to see. "If it's a few new majors coming along, and that works, and people don't feel that the liberal arts are being neglected," Crowe says he is comfortable with trying these changes.

But even if Augustana has had non-liberal arts majors, "we do want to be known as a classic liberal arts institution."


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