The U.S. Department of Education recently released a list of 114 private non-profit colleges that failed the Department’s test of financial responsibility. These colleges could be headed for shutdown, reported the Chronicle of Higher Education:
Although not designed as such, failing the test can be an indicator that a college is in danger of not surviving. Over the past year, at least five of the institutions that show up as failing the financial test based on data from their 2007 or 2008 fiscal years have either shut down, merged with a wealthier nonprofit college, or sold themselves to a for-profit college company.
Every year there are usually two or three colleges that kick the bucket or get swallowed by an entity higher up on the college food chain. But a list of 114 colleges at risk because of their fiscal friskiness? That seems extraordinary. Surely not all of them will be shark food?
According to the Chronicle, the Department of Education applies special scrutiny to the at-risk colleges: “Colleges that fail the test are subject to extra monitoring on their use of federal student-aid funds,” and “Those that scored below 1.0 (on a scale of minus-1 to 3) must post letters of credit with the department equal to 10 percent of the federal aid they award.”
Among the colleges on the list are Eureka College, the alma mater of Ronald Reagan, as well as John F. Kennedy University, which joined the National University system this spring. Of the 114, three are historically black colleges, many are liberal arts-focused, and 75 have religious affiliations. Most of the latter are Christian schools and seminaries.
One, the Tai Sophia Institute in Maryland, provides training in acupuncture and herbal medicine using holistic Eastern teachings such as “Oneness.” Tai Sophia’s devotion to cosmic oneness, however, hasn’t come close to the earthly nirvana of 1.5 – the passing grade on the DOE scale. The acupuncturists, alas, are barely pricking the skin with a score of 0.1.
JFK U, incidentally, also offers a program in holistic studies, in which students are urged “to explore the deepest dimensions of personal identity” and deepen their “self-awareness and wholeness of being.”
This is not to single out Eastern spirituality as a risk factor. The largest category of endangered colleges, after all are heirs to Western spiritual traditions: Presbyterian, Lutheran, Catholic, Jewish, Baptist, Dominican, Episcopalian colleges are having trouble achieving one-point-fiveness as well.
They are schools like Nyack, taking “the whole Gospel to whole world,” in New York; Concordia U, “Commissioned by Christ” in Irvine, California; and Evangel U, “Boldly Christian, Unquestionably Academic” in Springfield, Missouri.
Why are so many religious colleges struggling financially? Dale Burge, the director of finance at Central Christian College (CCC) of Kansas, suggests, “Historically it may be a problem for small Christian colleges to raise money because they have a small support base. It’s difficult. Colleges are maintained through two things: enrollment and contributions. If you struggle with raising one or both of them, you’re going to have trouble.”
According to Mr. Burge, Central Christian College of Kansas, which scored 0.4 on the financial test, has been below the threshold for several years but has not had a problem continuing its operations, nor is it in danger of folding. “We have been posting our letter of credit and following the regular procedures for securing federal aid dollars. It hasn’t been a huge problem for us,” he said. Besides, things are looking up for CCC: “We anticipate a significant increase and there’s a good possibility we may surpass the 1.5 level. It’s been a good year. We received a significant contribution through an estate, and we have a good increase in enrollment this fall.”
Central Christian College belongs to a corporation called the Association of Business Administrators of Christian Colleges (ABACC), whose mission it is to “improve the standard of business management in evangelical schools of Christian Higher Education by providing professional development, networking and mutual support to their business leadership.” ABACC has 176 member colleges; 16 of them (9 percent) are on the Department of Education’s list. This seems ominously high, but Mr. Burge was not daunted. He viewed the number of ABACC institutions scudding along the financial bottom with good cheer, thankful that that the number was so low.
While Central Christian whistles and works, some colleges I researched do show traces of poverty. A few that I looked up don’t even have their own websites, and one of my calls went to a catch-all voice mail, the poor man’s version of a switchboard with a staff directory. An uncharitable suspicion comes to mind that some of these colleges may be more a tissue of dreams than actual institutions, but surely the U.S. Department of Education wouldn’t have been taken in by a Post Office box and an answering machine, would it?
A few of the colleges deny that they should have appeared on the DOE list of the fibrillating 114. The assistant to the vice president of finance and operations at General Theological Seminary, for example, told me that GTS had been placed on the list by mistake. She said that a letter confirming this had been sent to the Chronicle editor.
So perhaps not all 114 colleges are actually headed over the edge of the cliff—they’re just leaning really far over the rail. It’s a good thing the protective Ed Department parent is there to yank them back by the shirt.
Still, as we continue to assess what the nation’s economic turmoil has done to higher education, the DOE class of 2009 strikes us as an index to pay attention to. Do we have so many schools of acupuncture that we can afford to lose the Tai Sophia Institute?