Beware of One-Size-Fits-All Regulations for Colleges & Universities

BY BRIAN C. MITCHELL

When its trustees shut down Mount Ida College, they unleashed a debacle that resulted in a torrent of criticism and considerable finger pointing. Rejecting a merger or acquisition (depending on the characterization) with Lasell College, the trustees opted to sell the campus to the University of Massachusetts at Amherst, whose leadership saw the location in the middle of Boston’s high technology belt as an opportunity. UMass Amherst also assumed all of Mount Ida’s debt.

According to UMass Amherst officials, the acquisition permitted them to find a location that would assist their students who held internships with Boston area companies, among other benefits. Mount Ida’s students (and their parents) were caught off guard and speculated openly and angrily about where and even how to continue their education. Transferring to the UMass Dartmouth campus – about 50 miles away – made little sense to students who chose the bucolic, suburban Mount Ida campus for its fit, programs, and location. At their last Commencement, students successfully banned the trustees and president from attending the ceremony.

UMass System Criticized for Favoring Flagship Over Other Campus

The backlash increased as UMass Boston weighed in on the closure. Many at the Boston campus saw the acquisition as an infringement by UMass Amherst on their territory. More significantly, they faulted the UMass system for failing to advocate more directly for the UMass Boston campus as aggressively as for the Amherst flagship.

Local newspaper columnists openly criticized the UMass administration for a lack of transparency and for failing to listen to UMass Boston faculty and staff on this and a wide range of other issues, including the collapse of a recent search for a chancellor for the Boston campus.

State Inquiry May Result in Greater Regulation of Private Colleges

As the navel gazing begins, Massachusetts Attorney General Maura Healey has opened an inquiry into Mount Ida’s closure, suggesting that additional regulations may be needed on private higher education to prevent these kinds of messes from occurring again.

Richard Doherty, president of the Association of Independent Colleges and Universities of Massachusetts (AICUM), has argued that Mount Ida’s failures were specific to that institution and should not be extrapolated to produce more regulation for the other private colleges and universities in the state.

What a mess – on several levels.

Let’s set aside the finger pointing and the effort to condense a slew of bubbling frustrations and emotions into a crisis that shapes bad public policy. Is there anything that can be done to right the ship?  

Core Issue is a Failure of Trustee Leadership

There is, beginning with the understanding that Mr. Doherty is correct when he argues that Mount Ida is one incident and not a more damaging trend. The failure at the core of the controversy seems most clearly to be a failure by Mount Ida’s trustees to lead.

Mount Ida’s trustees did not exercise appropriate, conservative fiscal oversight of the institution. Further, they permitted the college’s financial mishaps to drive the timing and the transparency that led to the closing and resulted in the public implosion and outcry.

College’s Closure Also Points to Accreditation Failure

Second, the accrediting agencies should have known more about the condition of the institution.

When accreditation works well, it’s always a better alternative to state and federal oversight.

The fact is that we need better predictive, analytical tools by which to measure financial health across peers – even if only confidentially for internal institutional use – to determine in consort with accrediting agencies the true financial picture. Knowing earlier will better prevent future debacles like Mount Ida.

New Approaches Needed to Prevent Closures of More Colleges

Third, we need new products and approaches to assist colleges to help ease the inevitable. It is likely that colleges and universities will be forced to cooperate more to improve efficiency and create economies of scale. This is especially likely among small- and mid-sized private colleges and universities.

It is apparent that there will be an uptick in mergers, acquisitions, and occasionally, closures across America. Higher education needs an orderly process and a clear pathway to cause minimum disruption for students.

State governments can help by working to develop new programs like catastrophic insurance that will address how to handle closures, including the disposition of assets, laid off employees searching for work, and displaced students seeking to complete their degrees.

This is especially true if colleges have a reasonable financial stress test against which to measure the need for additional insurance.

Fourth, when public universities play a role, we need a better understanding of regulatory authority. For issues that cross campus lines within a system, the central administrative offices must have more authority to say yes – and no – over how debt shapes opportunities and challenges across the system.

Beware of One-Size-Fits-All Regulations for Colleges & Universities

Finally, beware of state regulators applying a uniform standard developed from a self-inflicted crisis. Government operates on an annual appropriations cycle in most places. Elections further shape how long-term strategy – if any – gets made.

The right kind of regulatory assistance – like catastrophic insurance – makes sense to explore. Intruding deeper into the management of colleges and universities – especially private ones – is unnecessarily bureaucratic.

Let’s hope that we learn the lessons of Mount Ida. It would be a shame to see a sad moment become a harbinger of worse things to come.

This article first appeared on the blog of the Edvance Foundation  

2 thoughts on “Beware of One-Size-Fits-All Regulations for Colleges & Universities

  1. I am a parent of who would have attended Mount Ida in the fall of 2018.

    I’ve had the opportunity to review the IRS 990 forms submitted by the college for the years 2011 through 2015.

    I have a BS in Business Administration from Montclair University, but while not being an accounting major, I was able to do a trend analysis of what was submitted. With my limited skills, I was able to determine that the Trustees at the college essentially rubber stamped every expenditure incurred by President Barry Brown the entire time. Case in point, we have spoken with a previous Mt Ida President who informed us that the renovations done at the school several years ago were completely unnecessary, except perhaps to one of the Trustees, who is a principal in the architect firm that handled that portion of the renovations.

    Unfortunately, by the 2016-2017 school year, the hole was so deep that the only plan to keep the college going (and keep Barry Brown’s $400+ K per year salary) was to sell off land, which finally backfired on him when he tried to sell the wooded area between Mt Ida, and a rather affluent community of McMansions, who didn’t want other properties backing up on them.

    In reality, based on my analysis, Mount Ida should have begun an exit strategy for their students for the 2016-2017 school year. Had they done that, it could have allowed them to not admit new students, teach out the balance of students (particularly those who have few to NO pathways to continue their education in specialized majors like Funeral Science and Commercial Photography). The could have chosen to work with Commissioner Carlos Santiago & the staff at the Mass. Department of Higher Education to begin to move programs to other schools, file the necessary closing plan as required by the DHE, and THEN sell the property to UMass (assuming that there was no attempt to merge with Lasell College). That is what COULD have been done.

    Instead, they chose to sell the students, faculty & staff out, leaving all with uncertainty concerning their futures. The fact that they closed negotiations so quickly with Lasell, and announced the closing 5 weeks after that announcement was made (as they continued to sell students, my daughter included, knowing full well that the college would be closing) to me borders on fraud.

    I had an opportunity to speak with Dr. Barbara Brittingham of the NEASC a few weeks ago to discuuss how they consider the financial strength of a college/university in the accreditation process. I learned that the accounting analyses are performed by volunteers from various institutions that are part of their network. While the volunteer aspect is admirable, perhaps full time employees are needed in that area, because as previously stated, I was able to determine the beginning of the downward financial spiral beginning with the 2013-2014 school year, and for the life of me cannot understand how degreed people in accounting could not see it (unless there is less an emphasis on it within the accreditation process than the academic criteria).

    I submit to you a link from 2016 from Forbes, ranking colleges on their financial stability. They were given grades A through F. You will see that Mount Ida was given a grade of D at that time, certainly not a strong endorsement, though if you spoke with Barry Brown or the Admissions counselors, you would have thought that they could buy and sell UMass.

    https://www.forbes.com/sites/schifrin/2016/07/06/2016-forbes-college-financial-grades-e-through-m/#2353ee944c34

    Of course, most Mount Ida students are first generation college students, meaning that most of their parents don’t read publications like Forbes. I admit as well that most of my information in this response came AFTER we learned of the intention to close Mount Ida. I’m 63, and frankly, when I was my daughter’s age, the thought of any college closing was unheard of.

    I do hope that A.G. Maura Healey, Commissioner Santiago & the DHE, Dr. Brittingham of the NEASC and even Governor Baker have learned something from this debacle. That lesson is, that there are other schools within the state that are also on the financial brink. The scope and latitude of every name and group I’ve mentioned needs to be expanded right away (which I believe that State Senator O’Connor Ives would propose), otherwise all those organizations will again be held hostage as schools close, with the students and faculty suffering as a result.

  2. One of the sub-headlines about half way through above reads:

    New Approaches Needed to Prevent Closures of More Colleges.

    I’m not sure we want to prevent all closures of some more colleges. We probably have too many, especially small precarious low endowment private colleges and some of those probably ought to and will close. Some States have too many state 4-year “universities” and while the politics and economics of closing some of those excess regionals is a precarious minefield, nonetheless the realities of state budgets [and the Medicaid hippopotamus in the wallow] will sooner or later lead to some closures and / or reduction to branch, or rather brook, status.

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