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AICUMass In The News

Boston Business Journal:
Opinion: Regulation of Small Colleges Must Tread Carefully on these Economic Engines


August 19, 2020

There is no question the sudden closure of Mount Ida College was shockingly disappointing and disruptive for 1,500 students and their families, and the faculty and staff at the college. Therefore, no one should begrudge efforts by regulators and policymakers to consider reinforcing the guardrails and guidelines aimed at avoiding a similar outcome in the event of future college closures.

But if we want to protect one of the most vital drivers of this state’s economy, we need to move carefully and thoughtfully to be certain we don’t end up making things worse for colleges across this state working to restructure and reinvent themselves in a rapidly evolving higher education environment.

Small colleges are incredibly entrepreneurial, finding niches, developing new academic programs to respond to the needs of our innovation economy and, in the end, evolving from challenged institutions to ones that thrive. They revitalize their missions and remain economic drivers.

Right now our congressional delegation is — rightly — outraged at a company laying off 160 workers in Fall River and moving those jobs to Mexico. Recently, Boston and the state pledged millions in tax breaks in exchange for General Electric’s promise of 800 jobs. The town of Agawam just announced $150,000 in tax breaks to create 10 new jobs at a local factory.

In Newton, Mount Ida issued regular paychecks to almost 500 faculty, staff and contract employees. Its students and staff were the regular customers of surrounding stores, salons, restaurants and coffee shops. It was a bulwark against more intensive, less green, development on its 72-acre campus. In other words: Every small college in our state is a local economic engine. In dozens of towns and cities, they are the heart of the community. If we are going to move forward with new regulations on how they operate, and dictate at the same time where they might fall on a spectrum of financial metrics, we need to understand we could inadvertently be tipping some schools into an even more precarious situation.

To understand the scope of the economic impact: There are nearly 300,000 students enrolled in private colleges and universities in Massachusetts, and these institutions employ roughly 100,000 full-time and part-time staff — never mind all the significant spinoff jobs. All of this, according to federally available data, totals $17.8 billion in annual expenditures, including $7.5 billion in salaries and wages and $2 billion in employee benefits.

To put this in context: Thirteen states had total budgets smaller than the $17.8 billion in annual spending by Massachusetts private colleges.

And there is another compelling reason to keep and support our small, private colleges: They increasingly are the most affordable route to a degree. While our public flagship university is now the fifth most expensive in the country for the neediest students, according to a recent study by the National College Access Network, competition and innovation have made smaller, private colleges sharpen their pencils to drive down costs and attract and serve more low-income students. While final numbers are not in, it appears that a significant percentage of the former Mount Ida students are heading to other private colleges that have offered superior financial aid packages and provide the right personal, supportive learning environments only available at small colleges.

Where appropriate, we should encourage thoughtful mergers and well-planned acquisitions, such as the ones we recently witnessed with Boston University and Wheelock College or Berklee College of Music and the Boston Conservatory. But we should also be vigilant to avoid regulatory overreach that could inadvertently lead to more college closings.

Richard Doherty is president of the Association for Independent Colleges and Universities in Massachusetts (AICUM), representing 57 independent colleges and universities throughout the commonwealth.