The job market & financial health of universities

An anonymous reader writes in:

I was recently thinking about applying to a private, non-elite SLAC simply because it's a lot closer to my and my wife's families. I decided not to for a lot of reasons but one deep hesitation I had was that I know a lot of the private, non-elite SLACs are likely to flat out fold in the next ten or fifteen years and the public ones are likely to come in for some deep cuts. This brings me to a question that I thought it would be very good to put out there: How in the world does one get any information on the financial health of the place one is applying and related stuff like enrollment trends?

This seems super important. The people who ended up getting two jobs I interviewed in the past at public SLACs have already gotten laid off. It would have been a disaster for me and my family if I'd left a renewable lecturer gig . . . that, while shitty in oh so many ways, was at least stable, for a TT gig only to get laid off in three years. It seems important that applicants know that this is a real threat they need to worry about at a lot of schools, especially SLACs.

This is a really important question, and I'm really glad someone asked it. Over the past couple of years, I too have heard of at least of a few horror stories--cases where someone was finally able to get a tenure-track job, only to see their job eliminated a year or two after they started. Alas, I'm not sure how to answer the question. You can of course ask faculty or administrators at the university about the financial health of the institution (either during an on-campus visit or after a hiring offer is extended). But, as for asking faculty, my sense is that sometimes even they can be quite in the dark about these matters, as the actual financial health of the institution may only be known by upper administration (which, I think, is why so many of the recent waves of faculty-line eliminations have come as a total shock out of the blue to those who faced them).

So, while the OP's question is a super important one, I don't have any real guidance above and beyond: ask around before accepting a job offer. But this advice probably isn't all that helpful. What do you all think? Do you have any helpful tips or insights (or personal experiences) on this issue? 

Comments

[Bitter]

I am one of those horror stories: my "TT" job at a non-elite LAC was eliminated within one month of my starting! (This was a few years ago, and I landed on my feet, so don't worry.) In my case, asking any of the faculty or administrators during my interview would not have yielded any results. The Provost repeatedly told me "how committed we are to the liberal arts." The faculty were thrilled that they were able to make a TT hire in philosophy; why would they expect it to be eliminated within a year of my starting?

In any case, I advise searching the school's name in as many places (local newspapers, Inside Higher Ed, Google News) to try to find evidence of layoffs within the last five years or so. Another thing I could have done was contact the person who worked my job prior to me, who left of their own volition a few years before to work a non-TT job. I imagine they could have filled me in on the state of the place.

Overall, I would just be very wary of any non-elite LAC or regional state university. Their budget situations are precarious and can change rapidly.

[Endowments]

Make sure to google endowments for SLAC. Anything under 50 million is very suspect, in my view, and maybe even under 100.

[I heard it there first]

I once heard a talk by an ex-provost from a very good private university where he said that the next ten years will see a lot of small private liberal arts colleges driven out of business (and they are businesses!). But he was optimistic for the state colleges - in part, because they are so cheap, and legislators have to support them a bit (even if they do not send their own kids there). Bet on the state colleges over the small privates, unless they are the first rung ... Williams College and the like.

[Consider the Core]

A good tip I got for non-selective LACs when I was on the market:

find out when the last core curriculum revision was done. If it was recently revised, this potentially indicates that the college is committed in some way to the lines needed to run that core and that any major restructuring (i.e. cutting number of required philosophy courses or restructuring departments/core categories) is not being planned for the near horizon (i.e. your time to tenure). If a major core revision is on the horizon, be cautious.

[The cliff approaches]

This is extremely important given the impending demographic cliff of 2025. I wish more people paid attention to it.

Read up on it and judge for yourself, but for my bet, I would be very reluctant to bet on the LAC / SLAC market these days. If you're contemplating taking an offer from one, do your homework!

[SLAC Associate]

For SLACs I second the earlier point about taking a look at the size of the school's endowment. For SLACs and regional state universities I'd also recommend trying to figure out (either via news articles or the Wikipedia change history, perhaps) how the total student population has changed over the last ten years. E.g., it's not a good sign for the institution's long-term health if the student body had already shrank 10-20% pre-pandemic.

[Marcus Arvan]

Just one quick comment: by all indications, location matters a great deal. See the map here: https://www.cupahr.org/issue/feature/higher-ed-enrollment-cliff/

Colleges and Universities in some states and regions appear to be much more likely to face serious financial strain than others.

[Chris]

To reiterate a few points already mentioned:

1. Endowment size---should be well above 50 million.

2. Enrollment trend---how much lower is student enrollment now compared to 5 years ago?

3. Current on-campus enrollment size--less than 1000 students should be a red flag.

4. Location---rural, non-prestigious schools have a harder time recruiting students.

5. Online presence--does the school offer a decent number of online degree offerings? Sometimes small schools lose money on the residential college part but make up for it with online programming.

6. Pipelines---does the school have a variety of entry points into higher education? Transfer-friendly? Highschool-college classes?

[Low-Level University Administrator]

I'm not sure, but many colleges post their enrollment trends (total applications, acceptance rate, and yield rate). A lot of them also publish enrollment by major, so you might see trends there. Administrators look at the same data when they make their decisions. Here's an example from Oberlin College (I don't know if Oberlin counts as first rung or not):

https://public.tableau.com/app/profile/birdmanobie/viz/OberlinIRQuickFacts/Story1

During an interview, you could also ask if a lot of classes have been getting cancelled due to low enrollments, whether course caps have recently been increased, whether philosophy classes are integrated into other majors, and whether there are more majors than there were five years ago.

The data wouldn't guarantee anything, especially because sometimes administrators shut down more or less well-functioning departments due to structural reorganization or shift in priorities.

[Ethics prof with an MBA in finance]

The best source of information on the financial health of a college or university comes from professional bond ratings. Google bond ratings for X (specific university). The higher the bond rating, the less likely the university is to fold (in the eyes of financial experts). If the school is getting a junk bond rating, you may want to steer clear.
If you go to the website of the particular rating agency that rated the bonds of X (e.g. Fitch bond ratings), you can learn what a bond rating of AA or B- means.

[Asst prof]

This is such an important question, with many good suggestions in the previous comments. I would add that asking directly about such things may not result in a very informative response, and may make a bit of a negative impression. So here are a couple of other indirect indicators to look for in addition to what others have mentioned: does the department have adequate administrative support for its size? Do faculty members feel that they get good support from the university in general? How many majors do they have (which you can then compare to student body size)? How many humanities faculty have been hired in recent years? (you can spin this question as relating to wanting to reach out to other new faculty for support, which is a good idea anyway)

I also found that it helps to pay attention to what people go out of their way to say is *not* the case. At one interview a dean assured me, out of nowhere, that the philosophy department was not going to be closed. From that I learned that the department was in serious trouble, didn’t take the job, and then looked back a few years later to see that the department was gone.

[SLAC prof]

I'm in my fourth year at a Christian SLAC and have already taken two separate pay cuts. I wouldn't be here if I didn't believe strongly in our institution's mission--and faculty have taken collective pay cuts in the past as well to avoid layoffs--but obviously it's stressful and I would have loved to know more about that side of things before signing on. I personally cannot imagine having a totally impersonal relationship with my own workplace (not a criticism of others who can/do, of course), so I think it's definitely a bit more tolerable because of that.

[Elite/non-elite?]

Any tips for determining whether a SLAC is an elite/prestigious one or not? Of course there are obvious cases where school x clearly fits the bill, but I'm wondering how to figure out whether a given place is prestigious or elite *enough* to potentially stave off some of the above stated worries. For instance, schools that are regionally considered to be pretty good SLAC schools but that might not have national recognition.