As Jane Shaw noted below, Virginia’s Sweet Briar College is closing. That’s a big deal.
Sweet Briar is over a hundred years old, has an endowment of over $90 million, and is ranked 116th by U.S. News and World Report among national liberal arts colleges. Paul Fain of Inside Higher Ed asks, “most notable and moneyed college shutdown yet?” Certainly, at least among the non-profits.
Is it a sign that, as the Wall Street Journal says, the “landscape for liberal arts colleges in the U.S. is changing dramatically” because “students [are reassessing] college costs” and are more career-minded than students a decade ago?
It’s hard to say. Sweet Briar is located in a competitive higher education market that is chasing a declining number of high school graduates. In the competition, Sweet Briar has two disadvantages that other schools do not. It is an all women’s school. And it is located in a rural area. It is also tiny, enrolling just over 700 students total, and tuition dependent, meaning that relatively small fluctuations in enrollment can be extremely damaging. For example, when Sweet Briar fell 45 short of its target in 2008, it temporarily stopped making retirement contributions for its employees and layed off staff.
To attract more students, Sweet Briar increased its discount rate for incoming students to 62.8 percent in 2013, meaning it collects only 37.2 percent of its sticker price. It was largely because the college’s board of trustees deemed this discount rate unsustainable, and were having a hard time maintaining enrollment levels even with the discount, that the board decided to shut down Sweet Briar.
Few colleges are in quite the storm that Sweet Briar found itself in. The average discount rate for freshman at private nonprofits in 2013 was very high, at 47.4%, but nowhere near Sweet Briar’s. Most other colleges will be better situated to hold on until 2021-22, when the National Center for Education Statistics predicts the decline in the number of high school graduates will reverse itself. But Inside Highe rEd says that plenty “of small private colleges have [enrollment and discount] numbers not that different” from Sweet Briar’s.
It’s rough weather out there.