Rest in Peace: College Closings

Is RPI’s endowment heavily restricted, and does the Forbes financial grading account for endowment spending restrictions?

Fwiw, CalU is -120 and 150 miles away from Clarion and Edinboro, respectively, the schools it’s merging with to form PennWest. So we’ll see how some geographic dispersion works out. The new school officially begins operation in 2 weeks.

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From a discussion of RPI’s downgrade by credit agencies

  • Total liabilities have risen from $203.7 million in 2000 to $1.08 billion in 2020, a 428% increase. In that span, total assets have only risen from $1.15 billion to $1.60 billion, an increase of about 40%.
  • Total liabilities, as a percent of total assets, have increased from 18% in 2000 to 67% in 2020.
  • Total debt (for borrowed money) has risen from $115.5 million in 2000 to $732.3 million in 2020
  • Interest expense has increased from $7 million to $33 million over the same time period.
  • With the right-of-use lease payments added to interest, total debt service expense for 2020 was estimated to be $40.3 million.
  • The Institute’s annual endowment draw (typically 5% of assets) has not covered the annual debt service expense in the seven-year period from 2013-2020.
  • In recent years, RPI’s high debt service, research funding gaps, and growing pension liabilities have consumed a high proportion of its cash flow from operations.
  • In turn, RPI has reduced capital spending to levels far below the depreciation of its facilities.

As commonly found in other organization, an underfunded pension plan and construction cost overruns look to be significant contributors.


Allow me to simply say: :scream:


My FIL graduated from RPI & was very active with them as an alumni for years. He thought that their financial stewardship was first rate, and he set up a charitable remainder trust with RPI as a recipient. He would be so disappointed to see the financial difficulties that they are experiencing.

RPI has had the same president for almost a quarter-century. This is rare but not unheard of (John Silber, for example), but it’s definitely the exception not the rule. Usually over periods of this length, the challenges faced by the university change, and thus the best person to steer through them changes as well.

I think it’s fair to say that RPI’s reputation has not moved all that much either up or down under Jackson’s tenure. That may be an accomplishment, but it was a lot of money spent to stay in about the same place.

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The Vermont College of Fine Arts, a low-residency MFA-only institution, is ending all instruction at its Montpelier campus and likely selling off or leasing its physical plant. The residential portions of its programs are moving to Colorado College; it’s unclear from the article what this is going to mean for things like NECHE accreditation.

Only the physical campus will close:
“The core of the VCFA experience is connected to the people and relationships that make up this institution—our outstanding faculty, dedicated administrative team, and students bring creativity and excitement for the arts to their studies every day. This will not change, whether during semester work that happens from a student’s home, or during our content-packed residencies.”

The school is not merging with Colorado College; they will just host their summer residencies on CC’s campus. In addition, the school indicates that its accreditation will not be affected.

Frankly, I don’t see this being a solution that will save the school, though.