Catholic colleges fail Department of Education fiscal test

The economy has been tough on institutions of higher education in the United States. This week, the U.S. Department of Education issued a report listing 150 non-profit private colleges and universities that failed to meet federal guidelines for fiscal responsibility, reports The Chronicle of Higher Education. The findings are based on fiscal performance for 2009. The number is 23 more than failed in 2008 and it represents a 70 percent increase over 2007, the Chronicle said.

The failure to meet the fed’s criteria usually represents an institutions “financial fragility,” but the downturn in the economy over the last two years has hit many college and university endowments particularly hard. The determination to list a school is based on several criteria, including debt, assets, and operating deficits and surpluses. The schools are required to participate in the DoE’s evaluation of how they award federal aid to students.

Sixteen Catholic colleges and universities made the list. Two have made the list for three straight years: Ave Maria School of Law in Florida and the College of Our Lady of the Elms in Massachusetts. This is the second year that Thomas More College of Liberal Arts in New Hampshire was listed. The first-timers are Brescia University in Kentucky; Newman University in Kansas; University of St. Mary of the Lake and Dominican University in Illinois; the University of St. Thomas in Texas; Rockhurst University in Missouri; Belmont Abbey College in North Carolina; Chestnut Hill College and Rosemont College in Pennsylvania; Wheeling Jesuit University in West Virginia; and the Dominican College of Blauvelt in New York.

The report also list many for-profit colleges and universities.

9 Responses

  1. I chuckled at your blog comments policy where you state “Jesus had strong views, but he didn’t tear us down to illustrate his points or bring us salvation.”

    Would calling some Pharisees a “brood of vipers” pass your policy test?

  2. Hmm, guess we’d have to give Him the benefit of the doubt. And I guess we’d even let him say they were a “brood of vipers who were going straight to hell,” because at least He would know.

  3. Good question, Jim. However, since Jesus is the son of God and head of the church, he can do whatever he wants. Everyone else has to abide by the comments policy.

  4. Not every college is failing because of the economy. The Thomas More College of Liberal Arts is a case in point and the finances are a matter of public record; the New Assoc of Schools and Colleges — regional accrediting agency had to be alerted.

    A change in administration destroyed this once fine school.

  5. Yes, at least with regard to the Thomas More College of Liberal Arts it is undeniable that the current financial emergency originated before the current academic crisis. It originated in a disregard of the institutional mission and, consequently, in radical changes in practice initiated in 2006-07 by the the second administration. The new administration introduced policies radically different from those that had permitted the College to remain resilient since 1978 despite previous economic downturns. Not surprisingly, these changes proved symptomatic of a radically different philosophy of education on the part of new faculty and administrators. Thomas More is now a different institution from the one that, by grace, prevailed and educated for three decades.

  6. Mary and Mary, I’m curious for more on Thomas More. Where can I find more on what happened there?

  7. Tony,
    I wanted to contact you in regards to this post, which refers to the Chronicle article. Our institution, Siena Heights University, was identified as a “failed” school for 2009. That is incorrect. Although we were on the list in 2008, we are no longer on the Department of Education’s failed list. It is being corrected by the Chronicle and would appreciate removing Siena Heights from this post if possible. By the way, our crosstown neighbor, Adrian College is not a Catholic college. You might want to remove that reference as well.
    Doug Goodnough
    Director of Marketing
    Siena Heights University

  8. Doug:

    Thanks. We’ll remove Siena Heights right away, as well as Adrian. Adrian was my fault. I had it confused with the Adrian Dominican schools. Shame on me for failing to fact check that one!

    We hope this did not cause SHU any problems, and we are happy to set the record straight.

    Hope all is well at Siena Heights. Don’t forget to add CNS to your media distribution. We’re always interested in Catholic higher ed.

    Best regards, Tony

  9. Dear Tony,

    I thought you and your readers might be interested in the following:

    Ed Jones, Director of Marketing
    Belmont Abbey College edjones@bac.edu
    704-461-6848

    FOR IMMEDIATE RELEASE

    Local College’s Score on Department of Education “Fiscal Responsibility” Test Contrasts with Belmont Abbey’s Strong Rebound from Economic Downturn of 2008

    Belmont, NC – The upcoming year is shaping up to be a great one for Belmont Abbey College. This fall, the school boasts an all-time record enrollment—with 1,751 students; the second highest traditional student enrollment in school history; the largest ever number of Adult Degree Program enrollees; and programs on three campuses. The fastest-growing college of all North Carolina Independent Colleges and Universities (NCICU), the Abbey has brought back Latin, introduced Greek, and is offering German classes. The number of Honors Institute students has grown by 37 percent. The new Entrepreneurship program is booming; Sports Management majors have skyrocketed; and Motorsport Management students are racking up key internships with industry players. Majors in the Liberal Arts and Applied Psychology have taken off, and the College continues to attract hundreds of majors in Business and Education. The Newman Guide has named the school as “one of the top Catholic colleges in America for faithfulness and affordability.”

    Yet when the Department of Education (DoE) examined colleges on net worth, operating revenues, and the ratio of assets to liabilities, using audit reports from fiscal year 2009, it awarded the Abbey a “fiscal responsibility” score of “1,” reflecting the fact that the market value of the College’s Endowment declined approximately $3 million in the 2008 economic downturn. A score between 1.5 and 1.0 requires a college to receive the Department of Education’s approval before dispersing funds to the student. Belmont Abbey College’s students received all of their financial aid awards on time and at the levels awarded by the College.

    Happily, the Abbey’s endowment value has now bounced back from the effects of the global economic crisis. In fact, if the same financial snapshot were taken by DoE today (August 21, 2010), using the same criteria, Belmont Abbey College would pass the test with flying colors, with a score of “2.0.”

    When asked about the College’s financial health, Wayne Scroggins, Belmont Abbey College’s CFO, responds: “Belmont Abbey College is in the midst of a remarkable period of growth. The Department of Education’s score, which was based on 2009 figures—shortly after the global economic downturn—is a classic lagging indicator. When the DoE took its snapshot, our endowment value was down by approximately $3 million. Today, our endowment is rebounding, our enrollment is at an all-time high, our retention rate is the highest it’s ever been, and our operating revenues are healthy. We couldn’t be more optimistic about the future of Belmont Abbey College–financially, academically, and spiritually.”

    # # # # # #

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