Finance
US colleges are cutting majors and slashing programs after years of putting it off
Christina Westman dreamed of working with Parkinson’s disease and stroke patients as a music therapist when she started studying at St. Cloud State University.
But her schooling was upended in May when administrators at the Minnesota college announced a plan to eliminate its music department as it slashes 42 degree programs and 50 minors.
It’s part of a wave of program cuts in recent months, as U.S. colleges large and small try to make ends meet. Among their budget challenges: Federal COVID relief money is now gone, operational costs are rising and fewer high school graduates are going straight to college.
The cuts mean more than just savings, or even job losses. Often, they create turmoil for students who chose a campus because of certain degree programs and then wrote checks or signed up for student loans.
“For me, it’s really been anxiety-ridden,” said Westman, 23, as she began the effort that ultimately led her to transfer to Augsburg University in Minneapolis. “It’s just the fear of the unknown.”
At St. Cloud State, most students will be able to finish their degrees before cuts kick in, but Westman’s music therapy major was a new one that hadn’t officially started. She has spent the past three months in a mad dash to find work in a new city and sublet her apartment in St. Cloud after she had already signed a lease. She was moving into her new apartment Friday.
For years, many colleges held off making cuts, said Larry Lee, who was acting president of St. Cloud State but left last month to lead Blackburn College in Illinois.
College enrollment declined during the pandemic, but officials hoped the figures would recover to pre-COVID levels and had used federal relief money to prop up their budgets in the meantime, he said.
“They were holding on, holding on,” Lee said, noting colleges must now face their new reality.
Higher education made up some ground last fall and in the spring semester, largely as community college enrollment began to rebound, National Student Clearinghouse Research Center data showed.
But the trend for four-year colleges remains worrisome. Even without growing concerns about the cost of college and the long-term burden of student debt, the pool of young adults is shrinking.
Birth rates fell during the Great Recession of 2007 to 2009 and never recovered. Now those smaller classes are preparing to graduate and head off to college.
“It’s very difficult math to overcome,” said Patrick Lane, vice president at the Western Interstate Commission for Higher Education, a leading authority on student demographics.
Complicating the situation: the federal government’s chaotic overhaul of its financial aid application. Millions of students entered summer break still wondering where they were going to college this fall and how they would pay for it. With jobs still plentiful, although not as much as last year, some experts fear students won’t bother to enroll at all.
“This year going into next fall, it’s going to be bad,” said Katharine Meyer, a fellow in the Governance Studies program for the Brown Center on Education Policy at the nonprofit Brookings Institution. “I think a lot of colleges are really concerned they’re not going to make their enrollment targets.”
Many colleges like St. Cloud State already had started plowing through their budget reserves. The university’s enrollment rose to around 18,300 students in fall 2020 before steadily falling to about 10,000 students in fall 2023.
St. Cloud State’s student population has now stabilized, Lee said, but spending was far too high for the reduced number of students. The college’s budget shortfall totaled $32 million over the past two years, forcing the sweeping cuts.
Some colleges have taken more extreme steps, closing their doors. That happened at the 1,000-student Birmingham-Southern College in Alabama, the 900-student Fontbonne University in Missouri, the 350-student Wells College in New York and the 220-student Goddard College in Vermont.
Cuts, however, appear to be more commonplace. Two of North Carolina’s public universities got the green light last month to eliminate more than a dozen degree programs ranging from ancient Mediterranean studies to physics.
Arkansas State University announced last fall it was phasing out nine programs. Three of the 64 colleges in the State University of New York system have cut programs amid low enrollment and budget woes.
Other schools slashing and phasing out programs include West Virginia University, Drake University in Iowa, the University of Nebraska campus in Kearney, North Dakota State University and, on the other side of the state, Dickinson State University.
Experts say it’s just the beginning. Even schools that aren’t immediately making cuts are reviewing their degree offerings. At Pennsylvania State University, officials are looking for duplicative and under-enrolled academic programs as the number of students shrinks at its branch campuses.
Particularly affected are students in smaller programs and those in the humanities, which now graduate a smaller share of students than 15 years ago.
“It’s a humanitarian disaster for all of the faculty and staff involved, not to mention the students who want to pursue this stuff,” said Bryan Alexander, a Georgetown University senior scholar who has written on higher education. “It’s an open question to what extent colleges and universities can cut their way to sustainability.”
For Terry Vermillion, who just retired after 34 years as a music professor at St. Cloud State, the cuts are hard to watch. The nation’s music programs took a hit during the pandemic, he said, with Zoom band nothing short of “disastrous” for many public school programs.
“We were just unable to really effectively teach music online, so there’s a gap,” he said. “And, you know, we’re just starting to come out of that gap and we’re just starting to rebound a little bit. And then the cuts are coming.”
For St. Cloud State music majors such as Lilly Rhodes, the biggest fear is what will happen as the program is phased out. New students won’t be admitted to the department and her professors will look for new jobs.
“When you suspend the whole music department, it’s awfully difficult to keep ensembles alive,” she said. “There’s no musicians coming in, so when our seniors graduate, they go on, and our ensembles just keep getting smaller and smaller.
“It’s a little difficult to keep going if it’s like this,” she said.
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Finance
St. Augustine's says it will eliminate 50% university employees ahead of accreditation meeting
RALEIGH, N.C. (WTVD) — Saint Augustine’s University (SAU) announced Saturday it will eliminate several positions, including non-faculty and vacant, this month ahead of its significant accreditation meeting.
Last December, the Southern Association of Colleges and Schools Commissioner on Colleges (SACSCOC) voted to remove SAU from membership due to its financial status. The university’s appeal was denied in February and then in July, the SACSCOC arbitration committee reversed the decision and reinstated SAU’s accreditation.
The SACSCOC board will vote on the next step for the university in December.
In a news release, SAU said to ensure compliance with the Southern Association of Colleges and Schools Commissioner on Colleges and keep its accreditation, the school has reduced its expenses by approximately $17 million in fiscal year 2024 compared to 2023. Reductions, totaling 50% of university employees, include 67 staff positions (41% reduction); 37 full-time faculty positions (67% reduction); 32 adjunct faculty positions (57% reduction); and stopping several under-enrolled programs.
SEE ALSO | St. Augustine’s alumni hosts celebration amid canceled on-campus homecoming
The university also said it will be actively settling outstanding balances with vendors and adjusting various contrasts.
SAU also reported completing four financial audits for fiscal years 2021, 2022, 2023, and 2024, and restoring employee payroll and health insurance benefits.
The HBCU university — remaining millions of dollars in debt — secured a $7 million loan from Gothiuc Ventures with a high-interest rate. To get the loan, St. Aug’s put up much of the university’s main campus and off-campus properties as collateral.
Gothic Ventures tells ABC11 that the interest rate offered was determined by the financial difficulties faced by the university, which included a recent audit, historical revenue losses, and outstanding debt.
SEE ALSO | Saint Augustine’s University’s high-rate $7 million loan puts HBCU in jeopardy, finance experts say
Many, including SAU alumni and finance experts, are concerned about this loan.
“We are concerned about the partnership between Gothic Ventures and Saint Augustine University because if for any reason Saint Augustine is unable to repay Gothic ventures, the land will be lost and the university as we know it will cease to be,” alum Bishop Clarence Laney said.
The lawsuit against the board of trustees by the SaveSAU Coalition was also recently dismissed.
EDITOR’S NOTE: The featured video is from a previous report.
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Finance
Assess your financial risk before new policies affect the economy
I’ve been thinking about financial risk lately.
Should I change my asset allocation in my retirement portfolio, considering Donald Trump’s successful bid for the White House? Stock market valuations have risen smartly in recent years, which real income growth, productivity improvements, technological innovation, low unemployment rates and healthy corporate profits have largely powered. Yet with the election of Trump, voters have approved a massive economic experiment.
The Trump administration comes into power with many policy goals, but four economic initiatives stand out: Enacting significant tax cuts; imposing broad-based and significant tariffs; sweeping raids, mass deportations and tighter immigration controls; and slashing federal government regulations. The extent that these plans turn into reality and how each policy will interact with the others is uncertain. The risks are obvious. The outcome isn’t.
Enter risk management, a critical concept in finance. Professionals often associate risk with volatility. The tight link makes sense, since owning assets with high volatility hikes the odds of losses if there is a pressing need to sell the asset to raise money.
However, for the typical individual and household, risk means the odds money decisions made today don’t pan out. Managing risk means lowering the negative financial impact on your desired standard of living from decisions gone wrong and when circumstances take an untoward turn.
“Anything that makes reaching or maintaining that more likely reduces your risk, and anything that makes this less likely increases your risk,” writes Bob French, the investment expert at Retirement Researcher. “Everything else is just details.”
The key risk management concept is a margin of safety, a bedrock personal finance idea broader than investment portfolios. It can include having an emergency savings fund, owning life insurance to protect your family and investing in your network of friends and colleagues to hedge against the risk of losing your job. The right mix depends on the particulars of your situation.
In my case, after studying my portfolio, running household money numbers and reviewing lifestyle goals, I’m comfortable with the asset allocation in my retirement portfolio. There is too much noise in the markets for comfort, and market timing is always tricky. The prudent approach with my individual situation is to stay the course.
Finance
Shannon Bernacchia Appointed Interim Finance Director for Regional Schools – Amherst Indy
At a Zoom meeting on Friday, November 22, School Superintendent Dr. E. Xiomara Herman recommended to the Regional School Committee and Union 26 School Committee that Shannon Bernacchia be appointed interim Finance Director for the schools, replacing Doug Slaughter who had served in that position since 2019. Bernacchia has served as Assistant Finance Director under Slaughter. Her appointment was approved unanimously by both school committees.
In recommending Bernacchia for the interim director position, Herman cited her “impressive career, dedication, and accomplishments during this transitional period [to a new administration],” adding, “Since joining our district, she has demonstrated exceptional proficiency in managing complex financial operations, including preparing budgets, overseeing audits, and providing detailed financial reporting to the school committee.”
Bernacchia holds a Bachelors Degree in Business Management from Bay Path University and professional training in school fund accounting. She currently holds an emergency School Business Administrator license valid through 2025 and has completed all requirements for her initial license, except for the 300 hours of mentorship. She anticipates completing that requirement in January, 2025. Former Amherst Regional Public Schools and Town of Amherst Finance Director Sean Mangano is serving as her mentor.
Herman expressed confidence in Bernacchia’s ability to head the district’s financial operations.
In acknowledging her appointment, Bernacchia thanked the school committee members and said that she was excited to work with superintendent who is woman.
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