A Venerable Nontraditional School Faces Cuts

Discussion in 'General Distance Learning Discussions' started by Rich Douglas, Jun 25, 2002.

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  1. Rich Douglas

    Rich Douglas Well-Known Member

    The Chronicle of Higher Education reports today that Goddard College in Vermont has decided to cut its residential undergraduate program, which affects about 200 students--and will result in some job losses. They're losing money on it, and the New England Association put them on notice to get their financial affairs in order by September or lose accreditation.

    Goddard will continue its adult and distance learning programs, considered their core competencies.

    Goddard was once home to Vermont College and the Adult Degree program. Bear reported that Goddard sold these programs to Norwich University because Goddard was in financial trouble. (This was about two decades ago.) Vermont College has since been taken over by Union Institute and University. (Ironically, Goddard was one of the institutions that helped form the consortium that eventually became UIU.)

    Goddard has been looking to partner with other schools, including UIU, but those schools weren't interested in the residential program.

    Sounds like this not-for-profit school had to make a very cold and business-like decision, even though it abandons those almost-200 students. (The program will be cut immediately; they're out.) Students will have to transfer elsewhere.

    An earlier article in The Chronicle reported that Goddard's finances are tuition-driven; that it had only $3.9 million in assets. Tuition-driven? Hmmm.....

    Not-for-profits face the same business decisions as for-profits, and will take whatever means are necessary, including cutting programs and dropping students. And Goddard will shut its doors if it has to, one minute after realizing that fact.
     
  2. Bruce

    Bruce Moderator

    Ah yes, another feel-good decision by a philanthropic non-profit. :rolleyes:

    On a serious note, I would assume (hope) that these 200 students will gain automatic admission and full credit transfer to the non-residential program, should they choose that route.


    Bruce
     
  3. Andy Borchers

    Andy Borchers New Member

    Yes, not for profits face economic issues - but they have an inherent cost advantage. They don't have to make a profit, they don't have to pay taxes and they can take tax deductible donations. Those that have solid endowments are certainly less troubled by enrollment downturns. In my analysis this can constitute a 20-30% cost differential.

    Regards - Andy

     
  4. levicoff

    levicoff Guest

    Rich's comments are accurate, except for the notion that Goddard was once home to Vermont College.

    Vermont College was never affiliated with Goddard. Founded in 1839, Vermont College (originally Montpelier Seminary) was always an independent institution until its merger with Norwich University in 1971. The only connection the schools ever had was that Goddard sold their alternative programs to V.C. in 1981 due to financial straits at Goddard. The contract included a stipulation that Goddard would not reenter the alternative market for three years and, indeed, Goddard started their current programs three years after selling their original programs.

    The affair was chronicled by Peter Plympton Smith (former lieutenant governor and congressman from Vermont, and one of the founders of Vermont Community College) in his doctoral thesis (for his Ed.D. from Harvard) titled The Transformation of Norwich University: 1971-1981 - a little known but humorous document that included much of the nifty gossip surrounding the V.C.-Norwich merger and the acquisition of the Goddard programs. (There are copies in the holdings of both the Gary Library at Vermont College and the Kreitzburg Library at Norwich University.)

    All that said, Goddard has always been in financial straits, and this latest move was, for better or worse, inevitable.
     
  5. Rich Douglas

    Rich Douglas Well-Known Member

    Re: Re: A Venerable Nontraditional School Faces Cuts

    Whoops! My bad.

    More accurate to say that the Adult Degree Programs were sold to Norwich University, of which Vermont College was a part. (Hazy memory and laziness on my part.)

    Thanks, Steve.
     
  6. Rich Douglas

    Rich Douglas Well-Known Member

    Re: Re: A Venerable Nontraditional School Faces Cuts

    Not-for-Profit
    UIU for 3 years: $44,163
    Fielding for 3 years: $44,100
    Nova SE (61 sh @ $440): 26840

    For-Profit
    Capella for 3 years: $40,680
    Touro Intl (52 sh @ $500): $26,000
    Walden for 3 years: $40,260 plus residency fees (substantial)


    All private. All doctoral. All DL. Three each. Two with flat-rate tuition, one charging per-credit.

    I dunno. I don't see the "20-30% differential."
     
  7. Andy Borchers

    Andy Borchers New Member

    Re: Re: Re: A Venerable Nontraditional School Faces Cuts

    Rich - obviously we aren't communicating. I said 20-30% cost differential. That is cost of operation. Tuitions (e.g. revenue) are comparable - that is as it should be in a market.

    But what happens to your tuition dollars? Well, at the non-profits its spent on instruction and student service (and research and public service).

    At the for profits? If Apollo group is any indication - about 20% of their revenue goes to profit and tax. Selling and administration takes 27% of their revenue dollars. What's left for instruction - only about 53%. At Nova Southeastern, 90% of their tutition dollars goes for program services. Further, reaalize that non profits have gift income and endowment. At NSU, 12% of their income isn't tuition

    See my 20-30%? Actually, it is 37%. Bottom line - for profits can't afford to provide the same level of educational services. They are too bound up in making a profit and marketing, IMHO.

    Regards - Andy

     
  8. irat

    irat New Member

    Goddard has been looking for a partner

    Goddard has been looking for a partner to work with for sometime. The Board of Directors were very close to shutting down.
    This is the 2nd small local college on the ropes. Trinity College, a small catholic womans school closed last year.
    There are a couple other small colleges which are having problems.
    Goddard is interesting because it has been a leader in non-traditional approaches in decades past. However, it has not found a way to enter the internet generation.
    As a digression, former community college of vt pres., and former congressman Peter Smith lobbied to come back to vermont from his job in calif. to be president of the university of vermont. someone else was hired instead. Peter lost his reelection bid to the US House to current congressman, progressive bernie sanders. The bumper stickers at that time that were the most damaging to Peter were used without bernie sanders permission and referred to Peter as the "big lie". The showed a Peter with a long nose. Entertaining. but atypical for vt politics.
    All the best!
     
  9. aa4nu

    aa4nu Member

    Touro is a NON-Profit school !

    Rich,

    When did Touro become a FOR-Profit school ?

    Billy
     
  10. Tom

    Tom New Member

    Excellent Article!!!!

    By the way, Nova's tution for their DBA program is at about $37K.
     
  11. Tom

    Tom New Member

    Re: Touro is a NON-Profit school !

    Touro is and has remained to be a Non-Profit University.
     
  12. Rich Douglas

    Rich Douglas Well-Known Member

    Re: Touro is a NON-Profit school !

    My mistake. I know better, but I think of Touro International as a very separate and profit-oriented operation.

    What a school does with its excess revenues ("profits") doesnt affect the student as much as Dr. Borchers might imply. If the not-for-profits offered to rebate their excess revenues to students instead of using them for whatever, you'd see a stampede to the Bursar's office.
     
  13. Andy Borchers

    Andy Borchers New Member

    Re: Re: Touro is a NON-Profit school !

    I don't see how this can be so. The for-profits and non-profits charge fairly similar tuition rates, as you have pointed out. But I've shown that at one well known for-profit spends only 53% of its tuition intake on educating students, while another well known non-profit spends 90% of its tuition dollars in educating students.

    How can this not matter?

    Does dollars spent on education matter? Well, US News thinks so. In their ranking they include spending per student:

    "Generous per-student spending indicates that a college is able to offer a wide variety of programs and services. U.S. News measures the average spending per student on instruction, research, student services, and related educational expenditures."

    Dollars alone aren't the only measure - but they are one measure. All other things equal I'd rather be at a school with higher per student spending than a school with lower spending per student.

    As for excess revenues being returned to students, non-profits have to maintain some reserves against downturns. In NSU's most recent year, the "excess" was a mere $15 million out of revenues of $276 million - a scant 5%. In the same year, Touro actually lost money.

    If I were a student at a for-profit school, I'd sure be more interested in getting part of their 20% pre-tax margin and outrages marketing expenses rebated. But then for-profits exist to profit their shareholders - not the broad array of stakeholders that non-profits serve. Are non-profits perfect - heavens no. But there are fundamental differences in their operation compared to for-profits.

    Perhaps we should agree to disagree. Meanwhile, I'm waiting to see a single for-profit university make any of the major college ranking lists. I doubt it will come in my lifetime...

    Regards - Andy

     

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