In July 2023, newly appointed Lake Erie College President Jennifer Schuller was facing a $5 million deficit, which is quite a lot for a small private college like hers.
She said the deficit caused worries about the college's future. Located on a small but picturesque campus in Painesville, with about 1,000 students, the college has operated since 1856, when it got its start as a women-only seminary. It moved to a coeducational model for men and women in 1985.
Schuller said the end of federal pandemic relief money and a dip in the financial market hit the college's investments this year and had a hand in causing its financial woes. But Schuller said there were also more existential questions that needed to be answered. What is the role of a small private college in 2023? And what kind of course offerings, services and amenities should they be providing to attract – and retain – students?
A shared challenge
Lake Erie College is not alone in facing financial concerns. At Notre Dame College, a small private college in South Euclid, Interim President John Smetanka said the college is facing “budget challenges,” but had raised enough money to meet short-term needs, according to a late November email sent to staff.
“With the support of the Board of Trustees, many loyal benefactors, and members of the NDC community we are pleased to report that funding sources have been identified to meet the short-term budget challenges we discussed at the town hall,” he wrote. “While a number of challenges remain, we are looking forward to a vibrant spring semester and the upcoming centennial commencement in May 2024.”
The most recent 990 tax filing available online from tax year 2021 shows Notre Dame’s endowment at $9.2 million, the lowest it had been in four years, with almost $3 million taken out to pay for student scholarships. The college operated at an $800,000 loss that year.
Schuller, with Lake Erie College, said small private colleges like hers don’t have the benefit of large endowments to cushion them in tough times.
“Tapping into our endowment isn't something that, you know, one is sustainable, but two is something that we can do year over year,” she said.
She said while Lake Erie College’s enrollment has remained steady in recent years, the college hadn’t really been focusing on fundraising to supplement revenue from tuition, which compounded its financial troubles.
Schuller, whose background is in fundraising, said she and staff have worked tirelessly since she came into the presidency earlier this year, and now the future is looking brighter.
“Since April 1st of 2023, we've raised $25 million towards a $40 million campaign,” she said. “So that's unprecedented here.”
Challenges at Baldwin Wallace and Notre Dame
Baldwin Wallace University is larger, at about 3,300 students, than Notre Dame and Lake Erie and has a larger endowment, at about $163 million as of 2021, according to tax filings.
But that small private university is dealing with its own budget crisis. No major cuts have been announced yet, but the university said in the fall that it had frozen all non-essential hiring and that cuts would need to be made down the road, in the face of a deficit (officials declined to say how large). Cleveland Scene reports the deficit as of the fall was close to $20 million, and The Exponent, the student newspaper, reported the deficit occurred after accounting issues were discovered.
“A cross disciplinary BW work group is currently reviewing and validating options for strategic cost reductions and revenue growth,” spokesperson Shawn Salamone said in a recent email. “These ongoing efforts are focused on building the strongest possible financial foundation for BW’s future, while maintaining an extraordinary student experience. Decisive, prudent action is required, but the work is manageable for an institution with core strength and momentum.”
Baldwin Wallace’s enrollment has dropped by about 200 students since 2019. However, Salamone noted Baldwin-Wallace’s freshman class was up 13% this year, its largest first-year class enrollment since 2015, and applications for next fall are up too.
“In addition, BW has historically carried less debt than many independent colleges, has a strong endowment and an impressive report card from college ranking services and peer evaluations,” Salamone said. “These strengths set BW apart from many of the other institutions facing budget challenges.
At Notre Dame College, rumors have swirled about how serious its budget challenges actually are, which comes after news in July that the Sisters of Notre Dame – who founded the college - would be ending their sponsorship of the college. Administrators have held meetings with the campus since at least November to discuss the college’s finances, not long after former president Michael Pressimone resigned.
“It is important to acknowledge the challenges that colleges and universities across the country are facing,” a spokesperson said in a late November email. “Notre Dame College is not exempt from these challenges, which include a shrinking pool of college-aged students and growing costs. In response to these challenges, we have been engaged in strategic planning and thoughtful discussions with our stakeholders regarding our future.”
"There's a lack of fun on campus"
Schuller said colleges are going to need to be “nimble” and assess all parts of their operation. She says Lake Erie College has desirable programs that attract people from across the country, like its physician assistant program that receive 900 applications last year for 26 slots, and a “storied” equestrian program. But after talking to students, she discovered something.
“There’s a lack of fun on campus,” she said. “And we heard it repeatedly from our students that they wanted more things to do.”
So the college revamped some of its events and stripped some down to their basics and saw a major increase in student participation this fall alone, Schuller said.
Moving forward, she said that the expense of tuition and the coming demographic “cliff” – with a major drop in the population size of traditional college students - is going to cause all colleges to reassess how to attract students.
“Students are customers and it's important that we treat them that way,” she said. “Every decision that we make, including requests we make of our bondholders and all of our finance related decisions, what's going to have the greatest impact on the student experience?"
