Future of Division III

[Ron Boerger]

Giving Hopkins credit, the pausing of raises only for those making over 80K is a great move.

One thing that absolutely breeds resentment at a time like this is some VP or Department head making several hundred thousand a year telling the $40,000 rank-and-file workers that we're all in this together

Reminds me of the time my employer cut everyone's salary by 5%, but made a big deal about cutting directors by 10%, execs by 15% - only most of their income came not from salary but stock options/grants which we later found out were increased.  I know JHU won't be doing anything like that but it certainly did breed resentment among the rest of us. 

In other news, the latest president at Averett (the third in three months) claims the school, which as previously noted recently discovered it had somehow spent almost all of its endowment ($20M of $24.7M), is "so far from closing" and that the financial difficulties which forced the school into that action while not consistently paying many of its vendors is "not fatal".  Somehow a plan is being crafted that will repay the vendors and the endowment despite the continued downward trend in enrollment - this year's class expected to be smaller than last year's 256, which in turn was less than the previous year's 287.  Oh, and they want to adjust their tuition downward to be more comparable to other schools in the area (incorporating a large portion of the discount rate into the list price, no doubt). 

The prognosis for any school that has basically spent its entire endowment, has constantly declining enrollment, and no visible means of raising a substantial amount of money is pretty dire.  The school's net assets (as of the most recent audit, June 30, 2023) were only $44M, and $40M of that is plant, property, and equipment.  The cash and other liquid assets are offset by $5.5M in accounts payable, $20.7M in outright debt (secured by the school's real estate, an airplane, and a variable rate margin loan secured by $13.5M of the $20.7M remaining in its investment portfolio), and nearly $4M in lease right-of-use liabilities.  And this audit was done before the ransacking of the endowment was discovered, so the current situation is markedly worse.

[CNU85]

I wonder how much of the ROU liability is offset by a corresponding ROU Asset? The entire ASC 842 is creating havoc with some balance sheets. I had to get our bank to redefine some of the debt covenants that were written before ASC 842 and impacted some ratios.

[Ron Boerger]

Clark University (MA) will "lay off up to 30% of faculty and 5% of staff while restructuring degree programs due to enrollment and financial challenges" as they missed their enrollment target for the class of 2029 by 80-100.  Their "facts" page shows 486 first-year students in last year's class so that's a big miss.  Endowment is somewhere in the half-billion dollar range (according to the same facts page) so they're not in imminent danger of closing.

Edit:  their balance sheet is strong with nearly $500M in investments, over $750M in total assets with only a $155M in bonds payable as a major liability.   But they have shown losses on paper each of the last four years totaling around $80M. 

[DagarmanSpartan]

Clark is a university whose star has definitely fallen in the last few decades.

Consider this.  Clark was an original CHARTER member of the elite Association of American Universities (AAU); a membership it held until 1999.

Today, however, it doesn't even rank as a Carnegie Foundation Tier One research university (Clark is now considered R2 by that group).

For comparison, two of my alma maters are AAU (CWRU and Illinois), and a third is R1 (Houston).  R2 puts Clark on the same Carnegie Foundation tier in terms of research productivity as Central Michigan U.

Not sure exactly what went wrong at Clark, institutionally.

[maripp2002]

Not sure exactly what went wrong at Clark, institutionally

I think you could argue that being defined as a tier-1 research university is not the sum total of the worth of an institution. As schools shift focus to undergraduate education, or away from the fairly narrow version of research that the AAU defines for its members, there are a lot of reasons you might shift away from research as an institution. I know Clark's graduate students unionized a few years back, which might have had an impact to some extent, but I think the cat was far out of the bag by that point.

The sizes of the graduate student body could also be a factor as to why they've gone down in Carnegie classification. According to the Carnegie website, Clark has ~1800 grad students, whereas CRWU has ~6000, Illinois ~21000, Houston ~9000, and CMU ~4400. Knowing that not all of those graduate students are going to be in fields that best fit with the AAU or Carnegie's research profile you could definitely see why they left the AAU a quarter century ago. Looking at the Carnegie site, Clark spends just 12M annually on research, whereas Illinois has 821M and CWRU has 553M if you look at those even as a percentage of graduate students that number is still much higher.

They're right in that geographic belt where we've seen a population shift/closures recently, which may also be a factor.

[WUPHF]

Clark is interesting in that it was arguably the first research university and in the beginning, only offered graduate programs.  But the university never started or absorbed a medical school and is not a land grant institution and hence, the historical trajectory of the institution was never going to allow it to resemble a Case Western Reserve or Ohio State University.