Private Colleges Plan Deep Partnerships to Weather Financial Challenges

Wagner College

Administrators of private colleges who met at Wagner College (above), on Staten Island, N.Y., proposed collaborations that would help them cut costs.
June 16, 2010

Administrators from a diverse group of private colleges say a new business model based on collaboration is on the way, and could be critical for those colleges' survival.

Facing a faltering economy and changing demographics, officials met at Wagner College, in New York, this week for an executive summit of the New American Colleges and Universities, a consortium of 20 institutions that share a focus on integrating liberal arts and professional educations. It was the 15-year-old organization's first meeting to bring together several groups of top administrators: presidents, chief academic officers, chief financial officers, and enrollment managers.

The colleges face similar challenges. All of them are tuition-driven campuses that draw students largely from their regions. They are also facing increased competition from for-profit universities at a time when the number of college-aged students is decreasing and endowments are still recovering from the recession.

The solution, the group has decided, is to join forces.

The new proposals differ from previous collaborations, which have included sharing ideas and discussing mutual problems. Administrators hope to combine international programs, share technology, create faculty-training programs across campuses, and share enrollment data, among myriad other efforts. Their plan is not just to share resources, but to fundamentally change the way the colleges operate.

Carl Sgrecci, vice president for finance and administration at Ithaca College, said in an interview after the conference that collaboration has become a higher priority.

"Now more than ever, we've got to do these things to keep our institutions viable," he said "If we don't figure out ways of controlling our costs and making what we offer more accessible, at the end of the day, some of us will be out of business."

'Competition Is Not a Problem'

Partnerships will cut costs, helping the colleges to avoid future increases in tuition, which are already relatively high. But the colleges' leaders see a number of other benefits.

Charles A. Taylor, vice president for academic affairs at Drury University, said partnerships could allow students to have access to courses not offered on their campuses, and to benefit from articulation agreements, through which students who successfully completed their undergraduate studies at one college would be guaranteed admission to a graduate program at another within the group. Valparaiso University's president, Mark A. Heckler, also suggested bringing together "faculty superstars" from across the system to collaborate on research and to potentially teach courses together.

Collaboration could help the colleges maintain their enrollment levels, too. Laurie M. Hamen, vice president for enrollment management, athletics, and student affairs at North Central College, said strengthening the connections could open doors for recruiting and marketing in new areas. At the very least, she said, it would increase visibility.

Competition is not a problem. Though the colleges all have the same mission—integrating professional and liberal-arts education—administrators say they are different enough in size, location, and strengths that they won't be pitted against each other.

Studying Other Industries

Mr. Taylor, of Drury, who says he thinks collaboration is essential, did note that it could threaten the colleges' unique identities. Others, however, say there are ways the schools can maintain their differences within the consortium.

Distinctiveness "is part of the lifeblood of our institutions as we're situated in our regions," Mr. Heckler, of Valparaiso, said. "We're largely not in direct academic competition with each other, so by rethinking that, we can keep our individual brand and positioning quite clear but leverage the power of bringing people together."

Richard Guarasci, Wagner College's president, said the group examined ways other industries have handled similarly tumultuous times, and determined that collaboration was better than mergers, franchising, or using enrollment growth to cope with budget pain.

"It's worth the investigation, given the alternatives ... and it's something we're intent on pursuing" Mr. Guarasci said.

Presidents from the group plan to meet again in January to discuss concrete plans. They expect to move forward quickly, though Bruce E. Arick, vice president for finance at Butler University, noted that the goal is not short-term but long-term change.

"Is it going to have a huge impact in the next five years? I don't think it will be huge. But I think as we look ahead to five and 20 years and 50 years, it will be very important," he said.