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Uncertain Future for Smaller Colleges

As Cazenovia College shuts down in the spring, other smaller Upstate New York colleges may follow suit, say experts

By Aaron Gifford

While Central New York residents were stunned by Cazenovia College’s announcement that the school will shut down permanently in May, higher education experts say this closure is part of a larger trend impacting institutions across the country.

Cazenovia College, in Madison County, has 746 students, down from 990 a decade ago. The acceptance rate exceeds 70%, which means seven out of 10 applicants are accepted. The sticker price is $54,004, though the average net price per student is $18,413. The approximate $4.1 million in the school’s endowment is not nearly enough to pay the current debts.

Locally, the economic impact will be lost jobs, decreased sales tax revenues to local governments and a shrinking customer base for restaurants and shops that have long depended on business from college students and employees.

And while this closure also means one less college choice for future high school graduates in the Central New York area, there are signs of eventual problems among many other small private liberal arts colleges within a three-hour drive of Syracuse and Oswego County.

Hartwick College in Oneonta, for example, saw its student enrollment decline from 1,555 in 2012 to 1,170 in the fall of 2021. The acceptance rate there is 96%, with only 11% of those accepted enrolling at the school and the graduation rate is 57%. The sticker price: $64,769, though the net price is $22,523, according to the National Center for Education Statistics.

Robert Zemsky, a professor in the graduate school of education at University of Pennsylvania, says: “The problem is, college is just too damn expensive.”

“The problem is, college is just too damn expensive,” said Robert Zemsky, a professor in the graduate school of education at University of Pennsylvania.

Zemsky co-authored “The College Stress Test,” a 2020 book that examines enrollment and financial issues that American colleges are facing. He said schools are adding too many new majors like video game design and adult education programs at a time when there are not enough students to put most colleges at full capacity. Another problem, he said, is that the richest schools keep getting richer, while most schools across the nation are getting smaller and poorer.

Zemsky’s University of Pennsylvania, for example, has about a $15 billion endowment, according to the Data USA college and university profile website. Endowment funds usually consist of alumni donations and are typically more prominent in most selective private institutions (University of Pennsylvania’s acceptance rate is less than 9%), though state schools also have them. Endowments fund scholarships, salaries for professors and facility upgrades.

Scholarships funded by endowments reduce the high sticker prices. Zemsky said it’s getting to the point where the poorer private schools are watching their endowments dwindle and “they just can’t discount the price anymore.”

For example, compare Cornell University and its neighbor, Ithaca College.

Cornell, the second-largest of the Ivy League schools with more than 25,000 students, boasts a 9% acceptance rate. With an endowment of about $6.8 billion, Cornell lists a sticker price of $80,287 per year, but the average net price is only $24,262, and students who come from households with incomes lower than $30,000 per year pay less than $2,000.

Ithaca College has about 5,200 students — down from about 6,700 in 2012 — with an endowment of $337 million. The acceptance rate is 78%. The sticker price is about $66,000, with the average net price coming in at $36,327 — over 30% higher than Cornell’s. And the average net price for Ithaca College students from household incomes of less than $30,000 annually is about $20,000, according to NCES.

NCES reports that the average cost per student at private colleges and universities has doubled in two decades, increasing from about $13,000 in 2002 to more than $26,000 in 2021. Meanwhile, total enrollment at U.S. colleges and universities decreased by about 9%, from 17.5 million students in 2009 to 15.9 million in 2020.

In New York state, the average price per student at private institutions is higher than the national average, at $26,016. By contrast, the average cost for students at State University of New York campuses increased from just less than $3,000 in 2002 to about $7,546 in 2021, according to the National Center for Education Statistics.

Nationally, among the 5,573 U.S. colleges and universities, 85.2% of full-time, first-semester students received some type of financial aid that would discount the sticker price, according to NCES.

With the decreasing U.S. birth rate and a sharp drop in the number of foreign students studying in the United States who would otherwise pay the full sticker price at most schools, there simply aren’t enough paying customers to go around for most of the 5,000-plus institutions.

Jay Greene, a senior education research fellow at the Heritage Foundation, says: “[School] administrators aren’t selected for their business acumen and they aren’t very entrepreneurial.”

Moreover, federal money that helped schools make ends meet is going to dry up as the nation is expected to make Medicare funding a higher priority with the aging population, according to Jay Greene, a senior education research fellow at the Heritage Foundation.

“The larger flagship public schools get federal research money, but there’s very little research activities at the smaller schools, public or private,” Greene said. “They’ve lowered the standards as far as they can go and one other way is to raise tuition, but eventually we’re running out of other people’s money. There’s too much competition for marginal students who are reluctant to take on debt.”

There are additional factors to consider: Enrollments and incomes impacted by COVID-19; the continual increase of part-time online learning by a population that in the past was based on residential colleges; and the New York State Excelsior program that provides free SUNY tuition to income- eligible students, presumably taking significant business away from private schools that cannot offer as much aid.

According to the National Student Clearinghouse, 467 American colleges closed between July 2004 and June 2020. That list includes public, private and for-profit colleges like the Utica School of Commerce, which shut its doors in 2016. The College of New Rochelle, a private school near New York City, closed in 2019 due to a bankruptcy involving more than $80 million in liabilities.

The National Student Clearinghouse also reported that between the fall of 2019 and the fall of 2021, the total number of college students in New York state decreased by 94,932, the second-largest drop in the nation behind California, with 247,132 fewer students in that two-year period.

Representatives from the Commission of Independent Colleges and Universities of New York declined to be interviewed for this story, but the agency did issue the following statement:

“In regard to Cazenovia College, it was declining enrollment, exacerbated by the pandemic, that led to this closure. It is unfortunate any time a college closes, particularly one with nearly two centuries of history, and we are grateful to the other New York colleges that have agreed to help Cazenovia’s students complete their degrees.

“Statewide, enrollment in private, nonprofit colleges has declined over the past decade for a variety of reasons, including shifting demographics and the pandemic. New York’s public and private sectors of higher education form an ecosystem that educates 1.1 million college students annually. Both sectors are integral to this, and both are needed to ensure the state’s future success.”

Greene, the senior research fellow from Heritage Foundation, said the less elite small liberal arts colleges right now are the canaries in the coal mine that could shape recommendations and policies to help institutions stay afloat. He predicts that, without significant changes, the non-flagship “directional” public colleges and universities would be the next wave of closures after the private schools. This list includes thousands of schools across the nation, such as Penn State Schuykill, Northwest Missouri State University, and the four-year SUNY campuses.

“Schools never had any incentive to think ahead,” Greene said. “Administrators aren’t selected for their business acumen and they aren’t very entrepreneurial.”

Greene said even the colleges and universities that are the most financially strapped continue to be overstaffed and spend far too much on student services, including mental health counseling and entertainment.

Robert Zemsky, the professor at University of Pennsylvania and co-author of “The College Stress Test,” agrees that schools need to find a way to tighten the belt.

“There’s been a general dissatisfaction with the higher education for a long time now, but the schools still refuse to talk about what they can do to cut costs,” he said.

Zemsky recently embarked upon a nationwide study that examines whether it’s possible for typical college students to complete bachelor’s degree programs in three years instead of four.

Greene encourages institutions to look at replacing expensive tenured professor positions with part-time adjunct instructors.

“Unfortunately,” Greene said, “tons of people are realizing the kind of training a bachelor’s degree provides is not connected to the skills jobs really require. It’s not worth going into debt for that. If a school is not academically selective, then it should be a lot cheaper. For that kind of price — $200 grand over four years — your kid can start up a business instead.”

The total endowment for State University of New York systemwide is $3.66 billion.

University at Buffalo has the largest share of that amount, at $1.02 billion.

Top image: An aerial photo of Cazenovia College in Madison County. It will close in May after nearly two centuries in business. Photo courtesy of Cazenovia College.