Board of Higher Education agrees to monitor private colleges’ finances
The Massachusetts Board of Higher Education signed off on a new system under which Massachusetts will monitor the financial circumstances of private colleges in the state. The plan, which the BHE agreed to at Tuesday’s meeting, aims to ensure that students are aware in advance if their school is planning to close or merge with another institution, according to a Jan. 23 Boston Globe article.
Under the new plan, each year, state officials will examine publicly available data on private colleges’ finances to determine their financial stability. If a school is found not to have enough funding for the next year and a half of instruction, it will have to create a “teach-out plan” detailing “arrangements with other institutions that have agreed to accept their students, should the school close,” the same article explains. The school will also have to notify both current and accepted students about the situation, according to a Jan. 22 WBUR-FM radio broadcast.
In the last five years, 17 small colleges in Massachusetts have either closed or merged with other institutions, according to the WBUR-FM story. The abrupt closure of Mount Ida College last April, which left students and professors stranded, showed that there are issues with the current regulatory system, the story reported.
There is worry about a “demographic cliff” approaching higher education, caused by a decreasing fertility rate and thus a shrinking college-age population. In New England, the shift is “pronounced,” there are a lot of small liberal arts colleges, explained David Chard, dean ad interim of Boston University Wheelock College of Education & Human Development, during the WBUR-FM report. According to Chard, this combination makes the region particularly susceptible to the financial pressures which force colleges to close or merge.
Forcing universities to disclose their financial peril, however, may scare away potential students and lead to closures that may not have been inevitable, argued Chard.