Beloit to Cut Budget, Reduce Administration, and to Reduce Faculty Salaries but Maintain Programs

[MinnesotaDadof3]

Beloit plans to cut its annual budget from $48 million down to $43 million, Reduce many faculty salaries, and to eliminate 30 administrative positions, some of which are already vacant. Plans are to support academic programs able to handle a student body numbering 1,150 instead of one that supports about 1,300.

See links to the following news articles:

Inside Higher Ed: https://www.insidehighered.com/quicktakes/2018/08/27/beloit-plans-layoffs-salary-cuts-fix-deficit

Beloit Daily News: http://www.beloitdailynews.com/news/20180824/beloit_college_grappling_with_financial_issues

[SatchelSF]

There are way too many administrators everywhere in education. Cut, cut, cut!

[gardenstategal]

I am unfamiliar with the details here, but suspect that we’ll be seeing more of this. The arms race of college spending and amenities is not sustainable nor does a lot of it actually impact the academic experience.

Our kids do not need to live at campuses with resort amenities to have a wonderful 4 years yet many schools have unaffordably invested just to keep up.

[rienrah]

This is not a school with resort amenities.

[CheddarcheeseMN]

Is 80 percent retention from first to second year common for LACs? Seems low.

[Mwfan1921]

80% is low compared to the top LACs, but I’m not sure relative to Beloit’s peers. Interestingly, there is no mention of any of this on Beloit’s website. The project, Beloit Forward, requires a Beloit ID to access. http://beloitcollegeroundtable.com/2018/08/24/beloit-forward-plan-hopes-to-tackle-colleges-deficit/

[megawillmae]

Beloit has a unique spirit and has been an academically sound choice in a number of fields for years. This is sad turn of events for the college that is being attributed in part to ‘birth-derth’ and is sure to spread in years ahead. Parents would do well to pay as close of attention to endowment balances as to selectivity rankings.

[megawillmae]

Knox College, a peer LAC college, just unveiled a business and management degree in an effort to stave off declining enrollment numbers. They’ve taken a lot of heat in doing so but maybe it’s time for some of these struggling LACs to take a look at implementing some pre-professional type programs. The challenge will be of course to do that and not lose the mission or feel of an LAC. That said, if they end up shuttering doors due to financial difficulties who will that mission be serving.

[Mwfan1921]

@megawillmae Interesting about Knox and good for them. There are a number of fairly highly ranked LACs with business schools/degrees, like Bucknell and Richmond. I think we will see more schools that need to cut budgets as @gardenstategal said. Adding pre-professional programs could help attract students going forward.

[TekSan]

Sad that personal favs like Beloit and Knox have to make these reductions. Glad they are taking a proactive approach though. Both schools (as well as many Midwest LACs) are severely undervalued especially by the narrow scope of most ranking systems. Hopefully, they find ways to attract the next generation.

[Dustyfeathers]

As for the admin-heavy rant above, @SatchelSF , and I’m not disagreeing that administration is an issue. To be sure.
Nonetheless, I would like to point out that as costly as administration is in higher ed, it’s also the case that parents and students want things done for them well. I point to the thread on this forum that describes schools that parents have visited and moved up or down the list. Often the things that moved them were things like how trim the lawns looked, whether they saw a piece of trash, how smiley the adcoms were, how well the parking went, and other things that it takes an army of personnel to implement.
Also: parent want the school to instantly respond about bills, answer emails quickly, the websites to function as well as they do for Google or Alphabet.
Then there are the admins who supervise Title IX issues and other regulations. They want administrators to provide merit scholarships and fellowships for this and that and study abroad – all of that takes a huge administration.
It’s a miracle that a school with 1300 students can do all of that and more.

[MinnesotaDadof3]

Sadly, Moody’s Investors Service on August 21 downgraded Beloit College’s debt by two notches, to Ba1 (with a negative outlook) from its former Baa2 (with its former stable outlook) rating, now placing $23 million of the college’s bonds barely into the speculative “junk bond” category. This Ba1 category represents the 11th step (from the top) on a 21-step scale.

Moody’s cites Beloit’s declining enrollment, increasing tuition-discount rate and liquidity risks. The downgrade noted the college’s incoming fall 2018 freshmen class enrollment was expected to be 25% lower than the goal set by the college, and that the freshmen tuition-discount rate reached 70%. Also noted was a decline in the student retention rate.

See the following link to Moody’s downgrade:
https://www.moodys.com/research/Moodys-downgrades-Beloit-Colleges-WI-rating-to-Ba1-outlook-negative–PR_904631477

[57special]

Sad. It’s a good school.

[dadof2d]

We have been looking at Beloit as an option for D22 after reading about it in CTCL. The recent financial difficulties and changes at the school (such as reducing staff and reducing salaries for remaining staff) are unfortunate, and I hope the school will find a productive path forward.

I took a look at the common data sets for Beloit from 2005-6 to 2017-18, and found a significant difference in the data sets post test-optional (beginning with 2015-16) and the ten years prior. Comparing the average of the three test-optional years versus the previous ten years, the number of applicants has doubled, the yield is down significantly (14% versus 23%), the percentage of students in the top 10% of their high school class is down slightly, and the retention is down. The ACT scores of the students reporting is approximately the same as previous years, but only 42% of students reported any scores (SAT or ACT) in the 2017-2018 admission cycle.

It will be interesting to look at all of the numbers when the 2018-19 data set is released. The school has indicated that the retention rate this fall for returning freshmen is only 79% (compared to a historical level of 89%), and that the incoming class size is lower than desired.

I really wonder if the switch to test-optional has contributed to the current problems, particularly the retention and yield problems. At the very least, the change has led to a significant increase in the number of applicants, and it may take some time to get a predictable entering class with respect to size and quality.

[Dustyfeathers]

I think that in general the school needs to figure out its niche beyond being a quality LAC in a nice little rural town. Being a quality LAC in a rural area is very hard lately because student number in general are down and students seem to be drawn toward cities, away from rural areas. Some schools in their position have begun to include more career-prep classes like business majors and the like. That’s one option. The other is to figure out what it offers or is unique to Beloit beyond small LAC. Maybe it could leverage its distant – but still reachable – proximity to Madison or Chicago and perhaps put in place co-op or internship programs. Coop programs are usually reserved for engineering and CS-type degrees but there’s no reason why it can’t be developed for humanities. One-semester placements in Chicago or even in a more distant city might be one option. Bennington is a small school and includes as part of its plan a January term in which the students work elsewhere. They don’t care where. Four years of January terms working means that the students can develop real-world skills and make a little money. It’s one possibility. Creative thinking that would separate Beloit and make it more of a first-choice school rather than a cool safety school would be great. (I knew a lot of students that listed Beloit as a safety. It is a school that should be on the top of more people’s lists.)

[WildRumpuser]

Beloit came in second for my kid. Puget Sound came in first. The West Coast was very appealing.

Beloit can’t do much about Wisconsin winters, but it can make some changes to the curriculum that might help a little. I agree with the earlier poster who said that Knox’s decision to offer a business program is a good one. That accomplishes two goals. First, it makes the overall curriculum slightly more practical. Even theater and anthropology majors can take business courses and benefit from them. Second, it may help Beloit attract a more diverse student body. I don’t just mean racially or socioeconomically diverse. I mean diverse in the sense that people who want to major in business have different personalities compared to people who want to major in theater or anthropology or biology. Puget Sound has a fairly similar feel to Beloit but you do notice the business/leadership majors alongside the stereotypical small liberal arts college types. I think it will be a good thing if more corporate leaders have gone to colleges like Knox, Puget Sound and Beloit. And it will be a good thing if more people who have little interest in the world of commerce know how to make a spreadsheet or read a financial statement.