A Small New England College Struggles to Survive

England, February 03, 2019: Two weeks ago, Hampshire College warned of financial problems that could keep it from enrolling new students next fall. The school’s president, Miriam Nelson, insisted, “We are not planning to shut down.” But speaking as a Hampshire alum, I was not reassured by her words. If anything, her statement only sharpened my alarm according to reports published in nytimes.com

Hampshire opened in 1970 as an idealistic experiment in higher education. When I enrolled in 1972, my father got so angry he stopped speaking to me. The campus was situated on 800 acres among bucolic fields and orchards outside Amherst, Mass. The first time I went there, I drove by the entrance without realizing it was a college. I thought I’d gone past a farm. As it turned out, however, there were a few brick and concrete buildings just up the hill, and my classes were lively, challenging and intimate. Creative problem solving was emphasized. Our professors encouraged us to consider the big picture and the long view, and embrace risk as a life strategy. Failing spectacularly in pursuit of an ambitious goal was thought to be salutary, and the shellacking instilled some humility. Whatever success I’ve had is rooted in those lessons. (Though even at Hampshire, one of my final academic projects — a four-week expedition to Alaska to attempt a very difficult peak in Denali National Park — provoked a fierce debate with the dean.)

There are no majors or grades at Hampshire. Instead, each student is responsible for creating his or her own course of study, and then devising a series of six “exams” that must be passed to graduate. Attaining a bachelor’s degree might require four years of study, or six. Or three, for that matter.

Hampshire was, and remains, too avant-garde for many prospective students, but thousands of kids who took the plunge have been propelled by their experience there into careers in education, medicine, law, business, science and the arts. Two-thirds of the school’s graduates went on to earn advanced degrees. Twenty-five percent have started their own businesses or organizations. Hampshire grads have been honored with Fulbright scholarships, Pulitzer and Hillman prizes; Peabodys, Grammys and Emmys, and at least four Oscars. Alumni include the filmmaker Ken Burns, the actors Lupita Nyong’o and Liev Schreiber, the theoretical physicist Lee Smolin and the economist Heather Boushey.

Before Dr. Nelson agreed to take the helm in April 2018, she had spent most of the previous 30 years at Tufts University as a distinguished scientist in health and nutrition, an admired professor and an associate dean. Last May, two weeks after she accepted the job, and 10 weeks before she was to begin her duties as president, she received an urgent phone call from the outgoing Hampshire president, Jonathan Lash. He warned her that the next batch of new students was drastically smaller than anticipated. “When Jonathan told me the numbers,” Dr. Nelson said, “I knew it posed an existential threat to the college.”

Hampshire had just undergone a routine 10-year reaccreditation review. Academically, the school passed the review with flying colors. “But they had deep concerns about our finances,” Dr. Nelson said. Those concerns resulted largely from the college’s dependence on tuition and student fees for 87 percent of its revenue. In response, Hampshire pledged to increase its revenue by significantly increasing the size of the class entering in September 2019. The number of new students who committed to enroll did indeed increase, but not by nearly as much as the school had promised, causing projected revenues to drop by millions of dollars.

With a $54 million endowment and some very wealthy alumni, Hampshire would seem to have the means to weather a temporary shortfall without going under, just as it has survived lean years in the past. But after the abrupt shuttering of several small, underfunded New England colleges recently left their students in the lurch, the regulatory environment changed dramatically for schools like Hampshire. A consumer-protection policy now being formulated by the Massachusetts Board of Higher Education is likely to require private colleges to abide by stringent new financial sustainability rules. According to Dr. Nelson’s interpretation of the proposed policy, Hampshire is legally and ethically required to keep enough cash in the bank to fund the school for four years so that first-year students will have the opportunity to graduate.

If her assumptions are correct, the college, with a $42 million operating budget, needs to set aside at least $168 million before it can enroll the next freshman class. This isn’t likely to happen. Dr. Nelson is adamant that the only way out of this conundrum is to cancel that class and merge Hampshire with a much wealthier “strategic partner.” Otherwise, she told a group of prominent alumni, donors and former administrators this week, Hampshire will be forced to close within the next three or four years according to nytimes.com

As she explained it, the demographic changes threatening Hampshire’s future are a serious concern to all but the most well-endowed universities. Increasingly, America’s colleges and universities will be competing more and more fiercely for fewer and fewer applicants from a rapidly shrinking pool of high school graduates. This reality has almost every school with an endowment less than $500 million quaking in its boots right now, she said.

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