Mills College is trying to do it all as it seeks to balance its budget -- and it’s trying to do it all very quickly.
The small private college in Oakland, Calif., wants to end a string of daunting deficits within three years by putting in place a mix of significant cuts, curricular changes and new partnerships designed to bring in more students. That’s a substantial set of tasks for a small women’s college that, despite a coed graduate student body, is best known for focusing on a relatively small niche of undergraduates who want to be at a single-sex institution. It’s also a challenge considering the history at Mills, which has a long record of faculty and students resisting large-scale changes.
Mills has faced financial troubles for years, but those troubles escalated to a new level in May, when the college declared a financial emergency and announced steps to overhaul its curricular approach while cutting costs. Mills outlined its planned changes further last week by releasing a draft financial stabilization plan detailing cuts and revenue-producing efforts. The plan could be approved at the end of June.
Among the proposals is a new, yet-to-be-defined “signature experience.” Putting such an experience in place echoes a strategy that has been tried at other women’s colleges in the country, with some success. Other plans at Mills include a tuition reset, layoffs and significant reductions in employee benefits.
Observers have noted that Mills appears to be banking on increasing revenue by bringing in low-income and LGBTQ students who are traditionally underserved by higher education institutions. While that may be a noble goal that’s largely consistent with the college’s identity, the student populations Mills is focused on are not particularly wealthy. That might make it hard for Mills to move its bottom line.
But Mills has no choice other than to double down on its strengths while making necessary cuts, according to its president, Elizabeth Hillman (at left).
“We’re in a pivotal moment for Mills,” Hillman said. “We’re ready to reckon with our financial challenges.”
Seeking New Revenue
Hillman started at Mills in July 2016. She was immediately faced with a $9 million budget gap. The college trimmed that deficit to about $4.3 million through cuts. But Mills was facing a similar gap for the upcoming year, when its operating budget is projected at $57 million.
Mills leaders will be walking a tightrope in making cuts while still trying to bring in new students and revenue. The college’s top enrollment priority is LGBTQ students. Enrolling LGBTQ students is already considered one of its focuses, but Hillman hopes to recruit even more. The college also wants to grow enrollment of women studying science, technology, engineering and mathematics and enroll more transfer students. And the college wants to develop programs like professional certificates and online, evening and weekend programs for working professionals.
Other programs could take the form of partnerships with other institutions in the San Francisco Bay Area. For instance, Hillman wants to develop a master’s in management and an M.B.A. program with the University of California, Berkeley.
“In a sense it is doubling down on the students we have now,” Hillman said. “On the other hand, I think we have to have other types of students. The fastest way to do that is take advantage of our higher ed partners.”
The financial stabilization plan details several steps geared toward raising modest chunks of revenue in the future. Notably, Mills is planning a tuition reset projected to boost undergraduate enrollment by nine undergraduates in 2019 and nine again in 2020, generating $200,000 and $400,000 in additional revenue in the respective years.
Mills currently quotes undergraduate tuition at $44,765 for the 2017-18 academic year. But its tuition discount rate is projected to be about 57 percent.
That’s confusing students and families, Hillman said. It could be dissuading some students from applying, particularly students from low-income families who do not believe Mills would offer enough financial aid to enable them to attend the college.
But Hillman was not ready to say how much quoted tuition could be lowered. The draft financial stabilization plan says the college is in the final stages of a tuition study and did not provide specific details, other than that a new pricing structure will be paired with curricular changes.
“Whether it is a lower price or a more direct and straightforward price, we anticipate that we will also market the new curriculum and a tuition reset together much more heavily than in the past,” the stabilization plan says. “So we anticipate that many first-generation students and families who have previously not considered Mills, due to the sticker price, will now be able to consider Mills.”
Other revenue-boosting measures outlined in the financial stabilization plan include a transfer initiative with Peralta Community College intended to boost enrollment by 25 students in 2019 and 2020. If the initiative can attract enough paying students, it would increase net revenue by $600,000 and $1.1 million in those years.
A master’s in management and an M.B.A. program with Berkeley would boost graduate enrollment by a projected 25 students in 2019 and 2020, adding $500,000 in revenue. A new executive education certificate program for working adults is budgeted for 40 students in 2019 and 2020, adding net revenue of $100,000 each year.
Also, athletic coaches would have their contracts extended from 10 months to 11 months. They would have recruitment goals of 15 full-time undergraduates for 2018 and 2019. Adding the month of employment -- June -- is intended to allow coaches to keep up their recruiting, cutting summer melt and drawing transfer students and athletes who were not admitted to their first-choice institutions. The revenue boost is projected at $400,000 in 2018 and $700,000 in 2019.
A Signature Experience
The financial stabilization plan does not go into detail about another agenda item that has attracted attention: the development of a signature experience for undergraduates.
Several other women’s liberal arts colleges have created signature experiences in recent years in an attempt to stand out and attract students. One of the best known, at Agnes Scott College in Georgia, has students focusing on leadership and global dynamics. All students complete courses geared toward leadership, and each student has a board of four advisers to assist them as they study. Students all graduate with a digital portfolio to showcase their time in college. They take part in immersion experiences like a global study tour.
The roots of the program date back to 2011, said Agnes Scott’s president, Elizabeth Kiss. The college was going through its own budget cuts and doing financial planning for the future. It looked at its market strengths and tried to find ways to stress them while presenting students with an experience they couldn’t get at any other college or university.
Agnes Scott calls its program SUMMIT. But a carbon copy wouldn’t work at another college with another identity, Kiss said. The trick is to find the blend of programs that fits with an institution’s identity while making it stand out.
“The phrase I use is ‘mission aligned and market relevant,’” Kiss said. “The answer is not the same for every school.”
Agnes Scott studied the idea and then took two years to develop the curriculum before launching it in the fall of 2015. The college spent about $20 million developing the signature experience program.
Since launching the program, Agnes Scott has drawn the two largest first-year classes in its history, including a first-year class of 272 in the fall of 2016. About three-quarters of incoming students said the SUMMIT program was important to them, Kiss said.
The larger classes translated into a $3.4 million increase in net student revenue per year -- no small jump for an institution with an overall budget of about $51 million. But the college hasn’t quite yet eliminated budget deficits. It enrolled 943 students this year and has a goal of reaching 1,100.
“It’s going to have to play out over time as we get more bigger classes,” said Kiss, who recently announced plans to step down from the Agnes Scott presidency next June after 12 years in the role. “There is this encouraging outcome.”
Mills does not plan to take as long or spend as much on its signature experience development as did Agnes Scott -- the goal is to have it in place at Mills for the fall of 2018, Hillman said. She plans to seek money from foundations and put some already awarded grant dollars into the process, but the amount will not approach the $20 million Agnes Scott spent.
Hillman believes Mills can be quick and efficient in developing a program in part because its faculty members have already been looking at its academic identity. The college just revised its core curriculum for 2016. Mills can also learn lessons from other colleges that have put signature experience programs in place previously, Hillman said.
There is, however, a question of differentiation -- if many colleges have signature experiences, can any of them truly stand out? Hillman maintains that Mills can craft a unique program based on its own identity.
“Mills is in a different geographic region,” she said. “Mills has a different history. Mills has a different set of programs. It’s going to be hard for us to look like anybody else.”
Cuts Still Loom
For all of the talk of new initiatives, cuts still loom large at Mills.
Administrators had previously said they anticipated laying off 30 to 35 faculty and staff members. The financial stabilization plan makes it clear how much could be saved by such moves. It projects annual savings from staff reductions at $1.2 million in the 2018 fiscal year and $1.5 million in 2019. It also spells out another $400,000 in savings starting in 2018 from eliminating some vacancies.
The plan goes on to call for Mills to reduce contributions to employee retirement plans. It would cut its maximum matching of employees’ 403(b) contributions to 2 percent, a move expected to save $650,000 annually. The cut would come after the match was already cut from 9 percent to 6 percent in January.
Looking forward, faculty members would have to wait longer to move up the pay ladder. The length of time between reviews at the full professor rank would be increased from three years to five years, a change the financial stabilization plan says would limit budget growth while minimizing the hit on junior faculty members and those in the middle of their careers. Savings are projected at $50,000 in 2019 and $40,000 in 2020.
Operating expenses, meanwhile, would be cut by a projected $1.4 million annually. The savings would come from a 15 percent reduction in discretionary expenses as administrators would be required to renegotiate or terminate existing contracts, change office supply vendors, review procurement processes and examine spending patterns within each college division.
Two other reorganizations could save at least $1.5 million when taken together -- reorganizing academic program administration and modifying or killing some academic programs.
On the question of reorganization, the plan notes that nine of the college’s 18 departments have three or fewer faculty members. The college has 23 department heads and program heads out of just 78 full-time ranked faculty, meaning almost a third of its tenure-line faculty members receive teaching releases so that they can do departmental or administrative work. Administrative releases in the 2016 fiscal year were the equivalent of 3.33 full-time employees and cost about $150,000, the plan says.
It calls for cutting Mills from a college with four divisions, two schools and 18 departments to one with three divisions, two schools and 13 departments. It also calls for eliminating four divisional dean positions that were created in 2016, saving about $80,000.
The plan does not spell out which programs are under consideration for restructuring, reduction or elimination -- although the philosophy and physics departments are among those rumored to be on the chopping block.
Taken together, the financial stabilization plan is intended to cut the college’s budget gap to less than $4 million in the 2018 fiscal year and less than $1 million in 2019. It is expected to balance the budget in 2020.
Faculty leaders would like to slow down the proposed changes and find a way to avoid cuts to those with tenure. They’ve offered a proposal that would save about $4.5 million while avoiding layoffs through measures like salary cuts and investing the college’s endowment in low-cost index funds.
“If they lay off tenured faculty members, I think that’s going to wound the college for some time,” said Roger Sparks, an economics professor who is the chair of the college’s Faculty Executive Committee. “That’s essentially undermining tenure, and tenure is a job protection that helps colleges recruit people.”
Mills has already gone through furloughs, staff position cuts and layoffs since 2011, shortly after the college’s former president, Alecia DeCoudreaux, took over and moved to close budget gaps. The relationship between DeCoudreaux and faculty members deteriorated over her five-year tenure, although some credited her with making the college’s budget issues known.
Many faculty members are worried that the latest financial plan was put together without following proper procedures, said Stephen Ratcliffe, a professor of English who is a member of the Faculty Executive Committee. He expressed concern that tenured faculty could be laid off without the due process of a formal declaration of financial exigency, pointing out that the college only declared a financial emergency under its bylaws. He also voiced worries that curriculum will be reorganized without enough faculty consultation.
The plans on the table, which the administration has called MillsNext, did not come from the faculty, Ratcliffe said.
“Determining, setting curriculum, that’s our area of expertise,” he said. “The signature experience and the MillsNext language have just materialized. It hasn’t been discussed. It hasn’t gone through division meetings and department meetings.”
Still, faculty members recognize the problem -- that costs are too high and revenues are too low.
“I think at this point we’re trying to put the brakes on it and protect programs and faculty and find a way of bringing the finances into balance,” Ratcliffe said.
Working with faculty and convincing them to help with the restructuring process will be important, said Janet Holmgren, a former Mills president who led the college from 1991 to 2011. She started just after a tumultuous period when students, faculty and alumnae revolted against a plan to have the college admit undergraduate men. The fact that faculty members and the last president of Mills, DeCoudreaux, did not have a good relationship makes it even more important for the current president to work with faculty members, Holmgren said.
“The faculty is outspoken, and it is strong,” Holmgren said. “I think it’s really important in this context -- which I believe ultimately will make Mills stronger -- that the president and the administration work very closely with the faculty.”
Financing the Future
The college has never drawn the wealthiest students, Holmgren said. Half of its undergraduates receive federal Pell Grants, which are widely regarded as a proxy for students from low-income families.
But Mills does draw students who are focused on their education. It also has strengths in a tradition of attracting transfer students and in a coed graduate program that comprises about 40 percent of the 1,400-student body.
“Mills has always had a range of students from a variety of backgrounds,” Holmgren said. “One of the qualities that has kept Mills going over the years is that we do attract very strong women who are really intent on getting the most out of their education.”
The college’s focus on the LGBTQ community gives it a core identity. It solidified its position several years ago as an early adopter of women’s colleges admitting transgender students.
That identity might only be able to carry the college so far, however. Students are first and foremost concerned with preparing for their careers in college, said Rick Hesel, a principal at the consulting firm Art & Science Group. He did work for Mills during Holmgren’s presidency.
“Students are interested, but it’s not the primary question,” Hesel said. “‘How am I going to be prepared for the world of work?’ That’s their first question about a college. They know it’s tough sledding out there.”
Art & Science worked with Agnes Scott when it was putting its SUMMIT signature experience into place. That process takes a large amount of resources, Hesel said.
“Agnes Scott turned things around really rapidly, but they did years of planning and invested a lot of money into it,” Hesel said. “I don’t know if Mills has the resources to make this kind of thing happen.”
Mills does have a substantial endowment with a market value of about $176 million as of the end of March. But it’s 95 percent restricted, meaning the money isn’t necessarily available for the current proposals to stabilize the college’s finances.
Hillman says a path forward is possible, though.
“Mills has been through tough times in the past,” she said. “Mills will work through this. I have real confidence in that.”