HEI Closures or PSA Conversions: What’s to Lose?

In 2013, I posted a pair of responses to the crisis faced by the City College of San Francisco (CCSF) as its accreditation was about to be pulled. Along with the administrative and support staff, 2600 academics and 90,000 students were to lose their access to higher education (HE). At that time, I explained how loss of accreditation is not loss of the qualified academics that provide education or the students that seek it, but merely the loss of a middleman. In the absence of such institutional tools, the talents and targets of students and academics remain.

Universities and colleges are not HE. Academics and students are HE.

I don’t recall how the crisis was averted so that CCSF remains operational today. And it doesn’t matter, since it’s like saving the life of a drowning swimmer only to put them back in dangerous waters. The college was rescued from a meltdown on that occasion but it remains susceptible to the numerous factors that threaten the integrity and instrumentality of the higher education institution (HEI) model for HE.

This post explores the safer waters that PSA offers threatened institutions and the individuals that constitute them.

 

The Scope of Loss

Using data that predates the pandemic, according to the Hechinger Report, more than 500 of America’s public and four-year non-profit colleges and universities show signs of financial stress sufficient to face closure, merger or acquisition. Starting in 2018 and reaching back to 2016, Higher Ed Dive began tracking closures and other forms of consolidation for public and private non-profit HEIs. As of March, 2022, they documented 75 such HEIs. The California Association of Private Postsecondary Schools offers a list of over 100 private for-profit and non-profit HEIs that have closed since 2016.

Though the pandemic was no help, an array of causes for these HEI failures has long existed, including: reduction in funds and enrolment; rising operational costs; downturns in the global economy; austere national and local government policies; loss of accreditation; lawsuits; increased labour costs; and reduction in philanthropy.

The impact of such HEI failures is complex. With Title IV accredited status, many institutions qualify for federal and state student aid programs. When the doors close students are left with debt and no diploma or the loans are forgiven and taxpayers foot the bill. As a mere hint of the wider negative economic impact, consider that product and service providers, landlords, and governments lose revenue from equipment sales and repair, leased facilities, and income tax. Beyond the dollars, HEIs that face financial stress also tend to make short-sighted pedagogical and programme decisions they hope will capitalize on vocational trends, such as cutting liberal arts and humanities in favour of IT or business programmes. And when they fail, the life plans of staff, academics, and students are disrupted by unemployment, lost time, and squandered sacrifices. The ripples of loss are widespread.

 

Salvation Through Conversion

Like the golden hues of the Divine in Medieval paintings, the financial realities of the HEI model bind all HE discourse, no matter the topic: institutional failures that result in loss of academic and student access to HE; the expectation that Liberal Arts and Humanities programmes must justify their existence; the purpose of HE; who should pay for it; the reliance on international students; the reliance on technology; the (de)merits of private vs public HE; teacher-student ratios; quality insurance and assurance; equitable access; and more.

But while the HEI model uses dark hues of diminished and dodgy funding, PSA paints with a brighter palette that changes the discourse.

One way to illustrate this is through examples of HEI failure and how PSA can offer salvation.

Take two examples from Lincoln, Illinois. The first is Lincoln College. All links to its webpages now post a single notice of pending closure:

Lincoln College has notified the Illinois Department of Higher Education and Higher Learning Commission of permanent closure, effective May 13, 2022. The Board of Trustees has voted to cease all academic programming at the end of the spring semester.

Lincoln College has survived many difficult and challenging times – the economic crisis of 1887, a major campus fire in 1912, the Spanish flu of 1918, the Great Depression, World War II, the 2008 global financial crisis, and more, but this is different. Lincoln College needs help to survive.

The notice goes on to identify two back-breaking straws: the pandemic and a major cyberattack that disabled its recruitment, retention and fundraising systems. But within the HEI model, where many universities and colleges operate in financial stress, there are plenty of straws that either further weaken or finally break the camel.

To be clear, it is not a question of private vs public. Without the $76.2 billion in federal pandemic relief that HEIs have received since 2020, many more stressed public HEIs would also face worsening and potentially fatal financial forecasts, in a public system where there is little remedy in pinching state public pockets for funding that has yet to return to pre-2008 recession levels.

The Lincoln College (LC) notice talks of attempts to avoid closure such as fundraising, selling assets, consolidating employee positions, and exploring alternatives for their leased building. But after 157 years, all is lost unless the college gets the help it needs to survive, which is code for a gift of money – philanthropy being an increasing source of revenue dependence for HEIs and one that rarely comes with no strings attached or the financial sustainability HE deserves.

While I certainly can’t help with a monetary gift, I can offer a model that avoids all of this in the first place and can be used to save a failing HEI in the second place.

In a way, two attempts by LC at closure avoidance are related to the PSA model: consolidating employee positions and exploring alternatives for their leased building. PSA academics are not employees of an HEI. You might say they are employed by the fee-paying students that seek their services. As LC closes its doors, PSA allows academics to return to campus as independent practitioners that seek facility and service vendors in the operation of a professional private practice, under the protection and direction of a Professional Society of Academics (PSA). This represents a change in occupation and occupancy.

But as was apparently true with LC, perhaps the landlord and academic tenants are unable to come to a satisfactory agreement on lease terms for offices and classroom space. That’s okay. Located in the middle of the state, with museums, hotels, an airport, and a very famous American namesake, this town of a little over 13,000 residents certainly has economic incentive and arguably the means to offer facilities and services sufficient to support academics in private practice – as lawyers, doctors, accountants, and architects offer their valued services. The fact is, I have held classes in my homes, cafes, library common areas, and on lush green lawns in the great outdoors – all venues that have existed since the first universitas was founded.

Though information on LC is now rather difficult to collect, according to Wikipedia, in 2019 it offered associate, bachelor and master-level degrees in more than a dozen programmes, including PSA amenable fields of study such as: Business Management; Community & Human Services; Criminal Justice; Exercise Science; Law; Liberal Arts; Music; MBA; Health Services Administration; and Supply Chain Logistics. In 2019, LC had an undergraduate enrolment of 800 and a faculty of 50, with an 80% acceptance rate, a student-faculty ratio of 16:1, and tuition of $17,500.

Using the tuition and either the ratio of 16:1 or the total enrolment of 800, this means professional academics could earn $280,000 per year – were fees for HE service paid directly to individual academics, not institutional employers. As this blog has elsewhere demonstrated (also here and here), this is sufficient revenue to operate a private academic practice in large, expensive cities, never mind a small town like Lincoln.

Only two commercial lease spaces come up in a search of Lincoln – though I suspect there are others and certainly a soon to be vacant former college campus. These two listings are for a 2,000 square foot at $2,167/month and an 8,000 square foot at $6,000/month. Both of these potential office or classroom spaces can be shared by solo or partnered academic practices, leaving plenty of revenue for teaching assistants and academic incomes, in an area where the median household income is $48,931/year.

In this way, both LC and HE are saved in Lincoln, Illinois. Not only saved, but improved in all the ways that only PSA can offer. For instance, within a model that provides reliable sustainability and scalability, PSA makes it possible to offer a reduction in tuition that attracts additional students and so revenue to the area – in the same way PSA was offered as relief to the city of Detroit during the worst of the 2008 recession.

The second example of an Illinois HEI that faces financial stress is Lincoln Christian University (LCU). While it remains open, in March, 2022, LCU announced that due to declining enrolment revenue it is eliminating all its non-ministry degree programmes. In fact, Christian and other sectarian HEIs throughout America are facing similar financial stress. Like most private HEIs, they typically rely on tuition for from 70 to 90 percent of operational revenue. When enrolments decline as they have and the pandemic disrupts normal operations, these HEIs scramble to add popular and subtract unpopular programmes, expand athletics, reduce staff overhead, or move online.

Programme subtraction at LCU offers another way to see the rescue and restore possibilities of PSA, not at the institutional level, but at the programme level. Here again, the principle is the same, HE is not institutions, it is not programmes, it is individuals who want to learn and who want to teach.

LCU can remain whole by allowing academics in professional society and practice to service students in its non-ministry programmes. Under the umbrella of its accreditation, independent professional academics can operate private practices that service students in the pursuit of their educational and credential goals. In fact, the very same faculty employees that passed accreditation muster in these eliminated programmes can continue to provide service to students, only not as employees of LCU, but as independent professional academics that practice under the protection and direction of professional society.

In these circumstances, it is true that the $14,820 in annual tuition that LCU charges goes directly to PSA academics. However, the moment the programmes close this revenue is lost to LCU anyway, while with PSA the university gains: i) the ability to continue advertising its full complement of degrees; ii) potential to expand its institutional reach beyond Lincoln or even America; and iii) potential for revenue in the form of fees charged to academics for facilities, services, and accreditation usage.

This revenue is only potential because PSA entails independent professional prerogative that allows academics to determine all aspects of private practice operations. This means PSA academics might elect to use facilities and services other than those offered by LCU, from the wider off-campus community of Lincoln or its extension sites in Normal, Illinois, Indianapolis, Las Vegas, and beyond. This prerogative also means that professional academics can charge what they like for their services. As such, the $14,820 in tuition is a figure that only opens negotiation with respect to service fees. Normally, such negotiations are between the service provider (academics) and the service user (students), but because LCU contributes accreditation, it has standing as an interested party that might seek input on tuition fees charged by professional academics. At any rate, this is a detail that does not need to be settled at this stage of discussion.

This PSA rescue line introduces no new costs or risks, since LCU does not have to finance the operation of the programmes or assume any more risk than it routinely did during the years it offered the programmes. It is true that the academics that were once under their control as employees are now independent professionals, but two checks in the system provide confidence in this new, what might be called, affiliation. The first is that LCU can withdraw permission to use its accreditation any time it is dissatisfied with the service a professional academic provides. Second, a profession formed by an act of legislation and charged with provision of HE determines qualification for licensure and oversees its licentiates in the provision of their services. Both of these mechanisms work to ensure the integrity and quality of the affiliation.

Through a marriage of college and professional society, LCU can use PSA to expand the reach of its mission through extension sites in any city, in any part of the world, where academics qualify to work under professional society and LCU accreditation.

Of course, the four bodies that currently accredit LCU might have concerns about such a hybrid model, as might the federal government in qualifying its programmes for student aid. But it is important to note that education in America is a state affair, not federal. If the state of Illinois backed such a model, then given the legislated professional oversight and other merits of PSA, it would be difficult to resist such a change. In fact, were the state of Illinois to adopt PSA system-wide the substantial cost reductions offered by the model can eliminate reliance on federal funding, while it lowers tuition rates that increase out-of-state and international student enrolments that line state pockets with obligation-free tax revenue.

 

The Truth About Salvation

I am obliged by professional ethics to overcome the dire straits of HE, while institutions such as LC and LCU are obliged by a threat to their very existence. Centuries of institutional HE provision has left us with the impression that these obligations are the same. They are not.

The chief motivation of PSA is not the saving of HEI middlemen and the model they embody. The purpose of PSA is saving HE and the academics and students who constitute and depend on it for realization of life aspirations. The truth is that in the final analysis HEI accreditation is superfluous where a model like PSA is in place. What fundamentally matters is academic accreditation, which under PSA comes in the form of legislated professional licensure – as it does in medicine, law, accounting, engineering, dentistry, psychiatry, etc. Accreditation as we know it only matters within the HEI model, where institutions are the principals; but in PSA, individuals are the principals.

Nevertheless, in introducing the PSA model to HE systems historically monopolized by the HEI model, it seems a reasonable strategy to use PSA in aid of a failing university or college – or more precisely, in aid of its brand, mission, vision, and values. Relying on its established brand and accreditation, converting an HEI to PSA is a viable means of continuing the name and aim of an institution that otherwise faces fracture or fatality.

Of course, this sort of salvation might not be for all HEIs, but it can work for those institutions whose purpose is not fundamentally pecuniary in nature. At the same time, even in ideal cases there are features of the HEI model that reveal just how entrenched its institutions have become, as the example of Watkins College of Art reveals.

In 2020, this quasi-public, fully non-profit, legacy college was failing and the Board of Trustees sought a merger with Belmont University as a means of saving the HEI. During the process, one teacher and two students took the Board to court in hopes of securing an injunction against the merger. A Nashville judge and the Chancellor “found that the students and teacher lacked standing to stop the merger…since Watkins is governed by the Tennessee Nonprofit Corporation Act.” In the end, Watkins merged with Belmont.

Maybe that was the best thing for both HEI corporations. Maybe that was the best thing for the staff, faculty and students that constitute these institutions. I don’t’ know. What I do know is that this case reveals just how far HE has moved from its roots, where the principal individuals – academics and students – had unquestioned standing in decisions related to the content, delivery and direction of HE. Today, corporate institutions stand alone against individuals.

This post was an exploration of an HEI-PSA affiliated model. No doubt more needs to be said and I invite all to the discourse.