Can Public College Systems Stave Off Closures?

Some public colleges are already on the chopping block. But as college and university systems brace for incoming state budget cuts, they can streamline services and work cohesively to save money, experts say.

April 22, 2020
 
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The coronavirus outbreak has torpedoed the budgets of public and private colleges alike.

Revenue shortfalls, student fee refunds, possible declines in fall enrollment and unexpected cost increases have set the stage for a difficult financial future. Public college systems are facing all of that and another threat: impending cuts to state higher education funding.

It all means renewed debate over the controversial idea of closing public college campuses.

The Vermont State Colleges System, projecting a near-term operating deficit of up to $10 million this fiscal year, announced plans last week for a “substantial transformation” of its colleges that included closing several campuses. Days later, the board deferred a vote on the plan amid public backlash.

The Pennsylvania State System of Higher Education forecasts a $52 million loss, even after federal stimulus money is applied. The University of Alaska system projects a $35 to $40 million loss. The University of Maine system is looking at a $20 million short-term loss. Many states have announced, or will announce, budget cuts as a result of the coronavirus, and higher education funding is expected to take a big hit.

New Jersey has frozen higher education dollars. New York is expected to cut higher ed funding despite a proposal earlier this year by Governor Andrew Cuomo to boost state support. California hopes to make good on a $217.7 million increase proposed by Governor Gavin Newsom, but he recently called the January budget “no longer operable.”

Despite the hardship, public college systems are rejecting closure proposals and remain focused on collaboration, experts say.

The Pennsylvania state system struggled financially for years and has yet to reverse declining enrollments across the system. Dennis Jones, president emeritus of the National Center for Higher Education Management Systems, remembered proposals by the state Legislature years ago to close “a campus or two or three.”

“There are lawmakers in Pennsylvania that would love to close a campus or two just because they think that’s a way to save money,” he said.

Daniel Greenstein, system chancellor, is adamant about keeping all system campuses open.

“Politically it doesn’t make sense, and from a public policy standpoint it doesn’t make sense,” he said about closures.

Small campuses with fast-declining enrollments and that serve low-income students are most often threatened with closure, Greenstein said. In Pennsylvania, it’s the colleges in the rural parts of the state.

But closing those campuses does damage twofold, Greenstein continued. Any region with a closing campus would lose its largest employer and access to education for local students who need it.

“It is difficult for rural communities to source the rural and business leaders they need,” Greenstein said. “So they use universities as a way of training their teachers and their nurses and their Main Street businesspeople.”

But for a public college system hemorrhaging money, the quickest way to stop the bleeding is to lop off a campus, right?

“No,” Jones said. “Not in the short run, anyway.”

Many colleges have bond debt, meaning they still owe money to investors for buildings, residence halls and other projects.

Closing a campus means losing the opportunity to generate revenue to pay off that debt, Greenstein said.

“That just gets absorbed by the other universities in the system,” he said.

That said, Greenstein emphasized that just because a college remains open doesn’t mean it will continue with business as usual.

“When you say you’re not going to close an institution, that doesn’t mean it’s just going to continue as is,” Greenstein said. “It can’t. It’s bleeding cash.”

He suggested keeping successful programs where they are and moving less popular programs online, to be taught virtually by another system campus that executes them well. Systems can also consolidate services that are required across the board, like payroll, to save money.

The initiatives Greenstein mentioned relate to the idea of “systemness,” a term that Jason Lane and Rebecca Martin use often to describe public college systems working as one unit rather than as a conglomerate of independent colleges. Lane is the director of the Systems Center and dean of the School of Education at the State University of New York at Albany. Martin leads the National Association of System Heads.

“We’re seeing presidents of campuses, in many cases, talking weekly if not daily with system administration. Provosts are meeting with each other to talk about coordinated academic policies and programs,” Lane said. “There is no doubt there’s been an unprecedented level of coordination and systemness that has come out of this.”

But not all campuses are following such a model.

“Vermont treated this as a campus-by-campus problem,” Jones said, “instead of saying, ‘We need to provide access to education … how are we as a system going to do that?’”

The Vermont State College System's plan to overhaul its colleges includes closing Vermont Technical College's Randolph Center campus and Northern Vermont University and laying off 500 employees. After community pushback, the system Board of Trustees chair, J. Churchill Hindes, announced Sunday that a vote on the plan would be deferred by at least a week.

“I have listened to my colleagues on the board and want to give them time to consider the very significant decisions we have to make,” Hindes said in a press release. “But … delayed action increases the profound financial risks facing all four VSCS colleges and universities. Those risks grow daily. We simply do not have the funds to afford a protracted discussion and debate.”

The Vermont State Colleges System did not respond to a request for comment.

As to whether there will be more closure proposals like Vermont’s, Jones, of NCHEMS, said yes.

“The systems that have their act together won’t close them. They may repurpose them,” Jones said. “Those systems that are less able to behave as a system may in fact close some, because I think that we’re going to be in for at least a year or two of pretty tough economic times for higher education.”

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