Editorial Staff

New Study Urges State to Slow Down, Rethink Proposal to Protect Students from College Closings

/in , , , /by Editorial Staff
Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Board of Higher Education proposal risks “false positives” that could doom colleges, creates potential conflict, and ignores ongoing federal process

Read coverage of this report in the Chronicle of Higher Education.

BOSTON – The Baker administration and the Massachusetts Board of Higher Education (BHE) should slow down a fast-tracked proposal to protect students from sudden, unexpected college closings such as what occurred at Mt. Ida College, and use the time to rethink its proposal from top to bottom, according to a new study published by Pioneer Institute.

“This is a serious problem that will only get worse.  By 2017, the rate of closures or mergers among non-profit private colleges was twice the 2004-14 average,” said Greg Sullivan, author of A Risky Proposal for At-Risk Private Colleges: Ten Reasons Why the Board of Higher Education Must Rethink Its Plan.  “Unfortunately, the proposed new regulations are not an effective way to address the challenge.”

Under the BHE proposal, a preliminary assessment of the financial viability of all private colleges in Massachusetts would be conducted using the “Teach-out Viability Metric” (TVM), a tool developed by EY-Parthenon under a no-bid, pro bono agreement.

Colleges identified as being at risk would be subject to monitoring by a newly created Office of Student Protection (OSP) to determine if the college has sufficient financial resources to complete both the current school year and the next.

Those found to be in danger of being unable to complete both years would be required to submit a thorough teach-out contingency plan for OSP approval, and notify students and other stakeholders of their status by December 1st.

Sullivan identifies a number of problems with the proposal.  First, it has the potential to create “false positives” by wrongly identifying schools that are not experiencing undue financial strain.  The required December 1 notification would essentially become a drop-dead date; applications for admission would virtually disappear, current students would look to transfer, and faculty and staff would look for new jobs.

The underlying components of TVM have not been disclosed.  What is known is that it’s based on data from the Integrated Postsecondary Education Data System that is 18-24 months old when it’s released.

The proposal would also create a potential conflict of interest.  Both BHE and the Department of Higher Education (DHE) are statutorily mandated to “act as advocates of public higher education institutions” that directly compete with private colleges.  The BHE exempts public colleges and universities from the review all private colleges would undergo.

The board’s performance during the Mt. Ida crisis does not inspire confidence.  It approved the University of Massachusetts’ acquisition of the college for use as a satellite campus of UMass Amherst, resulting in the termination of all Mt. Ida faculty members and the expulsion of its students from the campus.

At a May 2018 Senate Post Audit hearing, UMass President Marty Meehan said UMass should be “part of the equation” when more private colleges close.

The proposal is also myopic in that it ignores ongoing national efforts to improve early warning about colleges in financial distress.  BHE has minimal experience in campus finance and it makes little sense to develop a whole new state bureaucracy when federal processes are underway that will likely bring to bear much more sophisticated analytic abilities.

“The U.S. Department of Education and its regional accrediting agency, the New England Commission of Higher Education, are the appropriate impartial entities to monitor and assess financial viability,” said Pioneer Executive Director Jim Stergios.  “NECHE needs to up its game, but they have the expertise and the ability to maintain confidentiality of reporting.”

Among Sullivan’s other recommendations is that BHE should completely and exhaustively disclose the underlying components of the Teach-out Viability Metric and its built-in assumptions to allow interested parties to assess its strengths and weaknesses.

He also calls on the Commonwealth to use its existing power to hold boards of trustees at private institutions accountable for carrying out their fiduciary responsibilities.  Sullivan urges the board to consider a DHE proposal to more fully educate, inform, and support boards of trustees.

The Board of Higher Education approved the proposal in January and created an aggressive timetable to implement.  Legislation filed on March 6th would give the board the authority to compel colleges to provide the data necessary “to accurately and fairly determine the institution’s financial condition and to monitor such condition over time” and “to impose sanctions on institutions that do not comply in a timely manner.”

About the Author

Gregory Sullivan is Pioneer’s Research Director. Prior to joining Pioneer, Sullivan served two five-year terms as Inspector General of the Commonwealth of Massachusetts and was a 17-year member of the Massachusetts House of Representatives. Greg holds degrees from Harvard College, The Kennedy School, and the Sloan School at MIT.

About Pioneer

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Get our higher education updates!

Related Posts:

University Presidents Salary Comparison, Pt. 2

See how Massachusetts state schools' presidential salaries match up. Presidents with schools who have less than a 1,000 student enrollment are near the top of the list.

University Presidents Salary Comparison, Pt. 1

See how much each president of a New England public university makes.

Supreme Debt Consideration: Will Biden’s Student Debt Cancellation Get Passing Grade?

0 Comments
/
Joe Selvaggi talks with constitutional scholar Ilya Somin about the merits and likely success of the two Supreme Court cases Nebraska v. Biden and Department of Education v. Brown, which challenge the President’s constitutional right to cancel more than $400 billion in student debt.

Gargantuan Graduation Gift: Biden Writes Check From Taxpayers To College Grads

This week on Hubwonk, host Joe Selvaggi talks with Dr. Beth Akers, AEI Senior Fellow, about the recent presidential executive order to cancel an estimated $500 billion in outstanding student debt. They explore who benefits, who pays, and the likely effects on tuition and the borrowing habits of future students.

With Declining Enrollment, Public Colleges in Massachusetts Cut Back Adjunct Faculty Positions

0 Comments
/
The number of adjunct faculty positions is declining at public colleges and universities in Massachusetts.

Student Debt Cancellation: Paying For Your Neighbors’ College Education

Hubwonk host Joe Selvaggi talks with education financing expert Mark Kantrowitz about the $1.6 trillion in U.S. public student debt - who owes it, who stands to benefit from the Biden administration's recent promise for across-the-board student debt reductions, and what strategies are available to target only those most in need.

Urban Institute’s Dr. Matthew Chingos on the Year of School Choice & the Student Loan Debt Crisis

This week on “The Learning Curve," co-hosts Gerard Robinson and Cara Candal talk with Dr. Matthew Chingos, who directs the Center on Education Data and Policy at the Urban Institute. They discuss the “Year of School Choice,” the welcome 2021 trend of states across America expanding or establishing private school choice programs; as well as the student debt crisis in higher education.

College Debt Explained: Education Pays When Students Choose Wisely

Hubwonk host Joe Selvaggi talks with American Enterprise Institute resident fellow and education economist Beth Akers about the American student debt crisis (totalling $1.6 trillion). They explore who borrows, who is in debt, and which policy choices might best serve the financial needs of every student. 

The COVID-19 Impact on Massachusetts Community College Enrollment & Success Trends

Enrollment at Massachusetts community colleges has dropped 32.61…