Survival of the Smartest: Vermont's Colleges Must Adapt as Pool of Potential Students Declines 

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• Rob Donnelly

A large marble statue of St. Joseph the Provider gazes serenely over the Rutland campus of the college bearing his name. Now more than ever, the shrinking school needs the saint to conjure a miracle. With only 128 undergraduates enrolled this fall, a nearly drained endowment, back-to-back operating deficits and its accreditation at risk, the College of St. Joseph is fighting to survive.

And it isn't the only one of Vermont's 21 colleges facing existential challenges.

College enrollment in Vermont peaked at 45,572 in 2010. Since then, more than half of the state's higher education institutions have seen their enrollment decline, in several cases by more than 20 percent.

More worrisome still, a sharper drop is expected in coming years. With birth rates falling, the number of graduating high school students is forecast to decline over the next 13 years by 7.1 percent in the Northeast and 8.5 percent in Vermont — the regions that most of the state's colleges rely on for incoming students.

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"Essentially, we've got overcapacity, and that's a real problem," said Art Woolf, an associate professor of economics at the University of Vermont in Burlington.

Given this imbalance between supply and future demand, it's unclear whether all of the state's universities and colleges can stay in business.

And that matters even outside the ivy-covered walls of Vermont's institutions of higher learning. The schools enrich young minds, shape the culture and train the workforce — important roles, for sure. They have also been bedrocks of the state and local economies.

To educate nearly 45,000 students, the schools employ more than 11,000 people and pay them $588 million annually, according to a 2017 report by the Vermont Higher Education Council. College students write landlords checks and fork over money for food, beer and lift tickets. Much of their cash flows from out of state: About 58 percent of college students in Vermont are flatlanders.

The schools influence Vermont in countless ways. Attorneys trained at Vermont Law School have won key legal battles for environmental groups; bright young grads have stayed in Vermont to start companies such as IDX Systems; and the New England Culinary Institute has trained a generation of chefs.

UVM even spawned the jam band Phish.

The higher ed sector draws more than $1 billion annually in tuition, said Frank Cioffi, president of the Greater Burlington Industrial Corporation and a UVM trustee since 2001. But given the growing cost of college, schools must focus on career development, as UVM has done in recent years, Cioffi said. Students shouldn't accrue $30,000 to $50,000 in debt just to live in their parents' basements because their degree isn't useful in the job market, he said.

Some Vermont schools are better positioned than others to prosper and adapt. UVM is the big kid on the block and relatively healthy, with enrollment growth of 7.1 percent between 2007 and 2016, and some 13,000 students — more than any other school in Vermont. This fall's new class of an estimated 2,500 is the most academically talented in the school's history, based on SAT and ACT scores, according to the university.

UVM has invested heavily in practical fields such as business, math, science and engineering to broaden its reach beyond the humanities, and it recently completed a $500 million fundraising campaign. It has also recruited heavily outside Vermont; today, just one in five students is a Vermonter.

Middlebury College, with an endowment of $1 billion, continues to attract top students and land coveted spots in national rankings despite budgeting bumps. Other colleges around the state have found or maintained a niche.

But some, especially small schools, both public and private, are clearly struggling.

Since 2007, enrollment has declined 6.9 percent at Vermont Law School, 9.1 percent at Saint Michael's College, 24.6 percent at Marlboro College and 25.5 percent at Goddard College. And at least a dozen Vermont colleges have logged budget deficits during the past four years, some repeatedly.

Jobs have been cut or left vacant at St. Mike's, Castleton University and St. Joe's, among others. In July, the president of Vermont Law School revoked tenure from 75 percent of its faculty in a controversial bid to control expenses and recover from an ominous deficit.

In addition to headline-grabbing cost-cutting, schools have launched a blitz of innovative programs to make tuition more affordable, enhance online opportunities and accelerate graduation.

Their aim: to attract more students and eliminate budget deficits — and to stay in the business of education.

Making the Grade?

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• Molly Walsh
• Jennifer Scott, president of the College of St. Joseph

School is back in session at St. Joe's despite worries that the private Roman Catholic school would not reopen this fall. In May, retiring president Lawrence Jensen announced that just 95 undergraduate students were expected this fall, only 10 of whom would be new students. The school's endowment was almost exhausted, he said. Students hissed at the campus meeting where he conveyed the dismal news, VTDigger.org reported. Trustees considered closing the school but decided instead to hire a new president.

In mid-August, 10 days before the start of the fall semester, the grass was freshly mowed and the grounds were immaculate. But an eerie silence hung over the empty hallways, and the new leader, Jennifer Scott, said she hoped that efforts to fill them with new students would succeed.

"We believe we are going to come out of this stronger and better than we were before," Scott said.

The enterprise began as a teachers' college for Roman Catholic nuns in 1956. Old black-and-white photos show the sisters studying in wimples and robes, but the campus gradually grew out of the habit, so to speak, and became a coed school offering a range of degrees for people of all faiths. For many years, the small but stable school maintained an emphasis on teaching first-generation college students.

But in recent years, recruiting has not been easy. New-student enrollment dropped from 84 to 53 between 2014 and 2016. Revenue for 2015 totaled $7.5 million, while expenses were $10.1 million, according to the college's Internal Revenue Service Form 990 filings. On August 15, Scott announced that the college had been placed on probation by its accrediting body.

The New England Association of Schools and Colleges gave the school two years to improve its fragile financial status or expect to lose accreditation. That allows St. Joe's to continue to participate in crucial federal student loan programs while it attempts to rebuild.

Some staff and faculty have been let go, and Scott conceded that those changes will affect which courses are offered.

Last Friday, Scott said the school had made modest progress from the grim enrollment forecast in May. Thirty-six new full-time undergrads have enrolled for the fall, bringing the total to 128. Including grad students, the school has 226 students, according to Scott.

The campus has two dorms, a few classroom buildings, and an 1850s mansion called Clementwood that has been used as office space, a library and faculty housing. Now the college is ramping up efforts to rent out the grand Italianate house for weddings and private parties, and it is reaching out to alumni to host fundraisers in their living rooms and backyards.

Other schools with underused or expensive buildings are selling them off. Marlboro College sold its downtown Brattleboro graduate school building for $3 million this month to dig out from a deficit. The college expects to have 150 students this fall, its lowest enrollment in roughly a decade.

St. Mike's plans to demolish one of its oldest buildings, Founders Hall, because it can't afford renovations. The Colchester school is also considering selling several buildings near Fort Ethan Allen. Its enrollment this fall is projected at 2,004 students, down from 2,575 in 2014.

The college has offered retirement incentives to shrink the number of tenured faculty; it has also cut lecturers and left vacant positions unfilled. As a result, the English department currently has no Shakespearean scholar, according to department chair Lorrie Smith. "We can fill in, but it's a little embarrassing," she said.

The reduction in faculty has driven professors' morale to, "I don't want to say despairing, but close to that," she said. Still, she was encouraged that the number of declared English majors is up this year, to about 20 students.

The Vermont State Colleges System has felt the effects of the downturn, too. Its five institutions have been pared to four. After a decade of declining enrollment at Johnson and Lyndon state colleges, trustees merged the two, effective this summer, as Northern Vermont University. The other schools in the system, Vermont Technical College, Community College of Vermont and Castleton, saw enrollment increase between 2007 and 2016 but in some cases are now hitting bumps.

A drop in fall 2017 enrollment at Castleton contributed to a projected deficit of $1.5 million that president Karen Scolforo confronted when she started her job last December. "We knew we needed to get ahead of it," she said. Scolforo offered early retirement to 17 faculty, laid off 10 staff and cut two people from her executive team.

Further, she is repositioning Castleton with proposals for new degrees: a master's in business administration, associate's degree programs in physical and occupational therapy that would feed into the degree programs at the University of Vermont, and an early childhood education program with a diagnostic center.

"These are high-draw programs that will get people to Vermont," Scolforo predicted. "We have to be able to expand our reach."

Castleton student Megan Greene, 19, was crossing campus August 20 with fellow members of the school's varsity cross-country team who had returned early for practice. She and two teammates noted that their sports and conditioning coach was a casualty of recent layoffs and will not return this fall, to their dismay. But otherwise, they said, they have noticed few changes and are happy at the school.

Greene, a junior, was valedictorian of her upstate New York high school and received a full merit scholarship to attend Castleton. She still expects to accrue $20,000 in debt for living expenses as an undergrad but notes she has friends who will incur triple that amount. She plans to pursue a doctorate in pharmacology.

Knowing she would also face the tab for grad school, Greene was careful about choosing an undergraduate program. She was also admitted to St. Lawrence University in New York and to St. Mike's. But neither offered enough aid, so she chose Castleton's deal. "My parents were like, 'You'd be stupid not to take it.'"

Innovation or Desperation?

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• Courtesy Of Castleton University
• Karen Scolforo, president of Castleton University

Like Greene, many other students fear high debt caused by rising tuition, and it factors into their college choices. Vermont schools are offering creative alternatives to lengthy and expensive programs, providing more aid, and looking for new ways to appeal to budget-minded students.

The private military academy Norwich University in Northfield is offering to reduce tuition by up to $4,000 a year — if a student agrees to pay that back from future income. The income share agreement program is an alternative to traditional loans and is intended to retain students who may have exhausted other sources of financing. This year, about 10 students have signed up for the program at the school, where the full cost of attendance is $57,514.

St. Joe's, too, is trying to appeal to the cost-conscious. It slashed tuition from $23,000 to $17,500 for this school year. Every returning student will receive a free Chromebook and a "deposit match," meaning that if a student puts down a $500 deposit, the school discounts costs by that much.

St. Joe's is also advertising a "degree in three" accelerated bachelor's program that shaves a year off the curriculum, as well as a new varsity e-sports team — jumping into the college craze of video gaming competitions.

Castleton has ramped up its dual enrollment program, which allows high school seniors to complete their final year at the school, either commuting from home or living on campus. Tuition is free, and this fall roughly 40 teens are enrolled — a record.

Sierra Boutin joined the program last year at age 17, after her junior year at Milton High School. She got a head start on college and enjoyed the more rigorous curriculum. "It was definitely the right thing to do for me," said Boutin, and attending for free was "an added bonus." This year she's back at Castleton as a sophomore.

The school is also pushing efforts to counter a recently enacted free tuition program across the border at State University of New York schools. Any out-of-state student who lives in a county that abuts Vermont can now attend Castleton at in-state rates.

And although President Donald Trump's immigration policies don't help, Castleton, like many schools, is trying to recruit more international students. Chidinma Ezugwu was valedictorian of her high school back in Nigeria and is now a senior majoring in math at the Vermont school. "I feel the United States has one of the best education systems. I've always wanted to come here," Ezugwu said. "I just wanted to study abroad and get another perspective."

Many U.S. students, meantime, are looking to abbreviate their campus experience.

Vermont Law School is pitching incoming students the opportunity to complete a full year of its three-year law degree online to help them save on living expenses.

Community College of Vermont is experimenting with giving prospective students credit for their work experience, shortening the time and decreasing the money needed for a bachelor's degree.

Career-oriented Champlain College, while relatively stable, trotted out a new half-price tuition rate for its online programs last fall. Northern Vermont University has advertised "same-day admission" decisions. If students visit with completed applications, they can get an answer that day on whether they qualify to enroll.

Some schools try to boost enrollment with generous tuition aid packages. But that math is tricky. "Net tuition goes down," said David Provost, Middlebury College's executive vice president for finance and administration. "That becomes the spiral that they get into, trying to buy a class." Sometimes the strategy winds up increasing the college's debt but not enrollment.

A few colleges, including Vermont Law School, are trying to improve their standing in influential U.S. News & World Report rankings by offering deeper tuition discounts to the best and brightest in the applicant pool. The strategy is intended to improve the appearance of selectivity — and the college's brand.

The law school dramatically increased aid after enrollment slipped, and last year the discount was 47 percent, according to Thomas McHenry, president and dean. Some of the aid flowed to students with high LSAT scores. These were often not the neediest students financially, McHenry said, but "you are forced to do it because you need to maintain your ranking.''

The discounting contributed to budget deficits, said McHenry, who started as president earlier this year. He said the school's outlook is now much stronger in the wake of cost-cutting and that fall enrollment appeared to be strong, with around 195 new students. But he said the final number wasn't known. "We'll wait and see ... before we open any Champagne,'' McHenry said.

He's not the only college president putting a positive spin on a tough situation.

Marlboro College president Kevin Quigley was still smarting from a Boston Globe story earlier this month about higher education in New England when he spoke to Seven Days. The story reported a gloomy outlook for small private colleges from the ratings company Moody's and used the word "struggling" in the headline.

"That's not a word that I accept for Marlboro, for a variety of reasons," he said. "I don't agree with it."

Quigley acknowledged operating deficits and drops in enrollment, which, at an already small school, can translate to proportionally large revenue loss. But the college has a $37 million endowment and relatively low debt — positioning it more securely than some of its peers, he suggested.

He insisted the college will recover from the strong "headwinds" that all schools are facing.

Big Endowment, Big Cushion

A seeming world apart, Middlebury College occupies a unique position. Its endowment topped $1 billion in 2016, making it the largest in Vermont. In 2018, the highly selective private school tied for sixth-best national liberal arts college in the U.S. News & World Report rankings. And while its outlook remains strong, even a very wealthy college, with many students from families that can pay the full sticker price of roughly $70,000 a year, has to balance its budget.

In June, Middlebury announced that after posting operating deficits for several years, it would cut its salary budget by 10 percent through buyouts, retirement incentives and other measures. Enrollment is steady, and the budget problems are not the result of declining demand, according to executive veep Provost. But the college must live within its means, he said.

"Basically, in a period of time from 2012 to 2016, the college's operating expenses were going up between 5 and 6 percent and operating revenues were only going up between 1 and 2," Provost said.

Trustees ordered president Laurie Patton to balance the budget, according to Provost. To do that, Middlebury has taken steps large and small. It introduced a new swipe card system in the dining halls, which previously had been notorious for freebie eating, according to Provost. "There was no screening system and, in fact, the folklore is that athletic teams from other institutions knew you could stop and get a free lunch at Middlebury. It was known as 'riding the panther,'" he said, referring to the school's mascot.

Provost is also determined to balance the budgets of some money-losing programs, including the Middlebury Institute of International Studies at Monterey. The graduate program in California logged a significant deficit last year and will be subject to the same compensation budget trimming under way on the main campus back in Vermont. But Provost says Middlebury has no plans to shed the program. It gives the school a valuable foothold on the West Coast, which some of its competing colleges on the East Coast don't have, he said.

The school's renowned summer language program is making money, and the college will hang on to that, as well, according to Provost.

A former administrator at Champlain College and an alumnus of St. Mike's, Provost has long observed the higher ed scene in the state. He wasn't surprised when tiny Burlington College folded after taking the big risk to purchase the sprawling Vermont Roman Catholic Diocese property and then attempting to dramatically grow enrollment.

In coming years, schools may be inclined to team up, Provost said: "I think you'll see more conversations around mergers rather than institutions taking big gambles or just institutions closing."

Merging can be a good option, he said. Provost pointed to the defunct Woodbury College in Montpelier, which merged with Champlain College in 2008. The Woodbury campus became part of the Community College of Vermont system, while Woodbury's 150 students were given the option to transfer to Champlain, which absorbed some of its programs.

"Quite frankly, that's a good outcome," Provost said. "The closing institution has a soft landing, and what's good about it can be absorbed and kept going by a larger, more viable institution."

Over the years, Vermont Law School and UVM leaders have discussed merging. Sometimes the law school has been the eager suitor, and other times UVM has, according to law school president and dean McHenry. But for various reasons he doubts they'll wed anytime soon.

UVM itself is not immune from the demographic challenges facing the state's other schools, but it has repositioned itself with a stronger emphasis on science, technology, engineering and math. Graduate programs launched this year include a doctorate in physics and a master's in biomedical engineering. A new $200 million STEM center looms on central campus. The university has adopted a take-no-prisoners style of budgeting that starves departments that aren't bringing in the students.

"I think we've had to make some difficult decisions," said UVM provost David Rosowsky. "The result has been a robust enrollment, and I think the university is in pretty good shape."

If other colleges fold, might UVM benefit?

UVM purchased the adjacent campus of Trinity College in Burlington after that school closed in 2000, for example. Rosowsky declined to speculate on how other possible closures might affect UVM.

"We would hate to see any college or university in the state of Vermont end up in that kind of situation," he said. "We only wish them success, that's all I can say."

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