Sweet Briar Closes, Needs 250 Million for Endowment

Shocking.   It was a closely held secret until it was announced.     Sweet Briar is closing its doors after a 114 year run due to “insurmountable financial challenges”.

The first reactions were of shock:  Tears, disbelief, hugs, silence.   But then the questions began.
Sweet Briar College’s president stunned faculty, students, alumnae and parents Tuesday when he announced that, because of “insurmountable financial challenges” the women’s college in Virginia would abruptly close this summer.   A visitor to campus described how, shortly after noon, every student was summoned to an emergency meeting, down to the last lifeguards ordered to stop watching the pool, and the painful sound that followed the news — almost a collective howl, as hundreds of young women began sobbing all at once.

Wednesday was defined by the questions that then poured in, from the sweeping and philosophical to the most minute and practical — everything from what would happen to the college’s rich history and traditions to whether the bookstore, which opened to a long line of tearful students Wednesday morning, had any Sweet Briar t-shirts left.

Colleges are complex operations, and that was brought vividly home Wednesday as an entire community tried to figure out: What now?

Parents asked what would happen to their daughters studying abroad, and about those students who are in Virginia on a student visa; about whether student athletes could talk with coaches at other schools;  and about whether there would be grief counseling available on campus. 

Students — many wearing the school colors, pink and green — asked about their ongoing research projects, how they could transfer credits to other schools, and whether juniors could walk in graduation ceremonies this spring if they finished up their courses over the summer.   Faculty members asked when their salaries would end and what would happen to the homes they own on campus.   People in the surrounding rural area asked what would happen to the land — more than 3,000 acres of historic Virginia beauty — and to the local economy.

Many alumnae asked:  Why didn’t we know about this?    Who failed us?

And: How do we stop it?

On Twitter, messages began to be linked with a common hashtag, #savesweetbriar.

A Web site appeared, with a $250 million fundraising goal, and a slogan:   “Think is for girls.”

A ‘bucket list’ of things to do before graduating from Sweet Briar College became bittersweet for students this week. 

Sweet Briar is meeting a fate that has befallen many all-women’s, small liberal arts schools across the U.S., a list that has fallen from 230 five decades ago to just a little more than 40 today.  An increasing financial squeeze and dwindling enrollment has forced many into shutdowns, mergers and coed conversions.

James F. Jones, Sweet Briar’s president for the past year, fielded scores, perhaps hundreds, of questions about what the school’s leaders had looked at before taking such a drastic step.   He said mergers with other institutions, co-education and other dramatic changes were all considered, but at the end of the day, they were left with an ever-smaller student population (523 now, with a tuition discount of 62 cents on every dollar.)

“You don’t have to be a mathematical genius to figure out this won’t work,” he told parents Wednesday afternoon. “The numbers don’t compute.”

The school’s $84 million endowment is not anywhere near enough to save the school, Jones said in an interview Wednesday afternoon. “We’d need $250 million into the permanent endowment tomorrow morning.”

He said that $56 million of that total are in restricted funds — some of the money dates back more than a century to the school’s earliest years — that the school can only use for narrow purposes.

Jones said that the school plans to petition the state attorney general, Mark W. Herring, in order to free up the funds so that the school can use it to offer severances to faculty members, pay back creditors and cover the costs of shutting down the college.

He said the school plans to sell the 3,250-acre campus and will soon be looking for buyers.

“All I do is tear up these days,” Jones said. “I would have given anything to save it.”

Many alumnae said the news was completely out of the blue.   They knew there had been an addition to the library recently, a new gym built several years ago, a cafeteria before that;  they knew there were struggles, as at many private liberal-arts colleges, but they weren’t told how dire the school’s finances were and how absolute the choices about its future had come to be.

Laurel Lee Harvey, a 1990 graduate who led fundraising efforts for her class, said in an e-mail that alumnae were blindsided.   Many were asking why they were never called to step up.   “We were never asked to provide more help.   If the request had been made, the answer would have been an emphatic yes.   The world needs to know that Sweet Briar women did not desert their alma mater.”

“Social media exploded yesterday across our community,”  Harvey said.   “We have alums ready to dive in and assist with fundraising, as well as looking at the legal and ethical dimensions of the decision.   I think a significant question exists as to whether the board acted as conscientiously as it should have in never raising this concern in a significant way with its primary donor constituency.”

Hallsey Brandt, 21, a junior from Norfolk, Va., was one of many wondering where they would finish college.   The president and deans had assured students that four colleges nearby would work for a seamless transition for Sweet Briar students, and all day Wednesday school officials were getting messages from other institutions offering to waive transfer deadlines and other requirements.   But  “we came here for a reason,” Brandt said.   “We didn’t chose Hollins or Lynchburg College or Randolph College.”

She guesses the students’ long-held traditions would disappear, too:  The fierce competition among the classes to paint the rock and an old hitching post, the seniors who become engaged will no longer play the “ring game,” where the women pass around the ring and guess who will soon be married.

The campus bookshop on Wednesday was emptied, as students cleared shelves of decals, mugs and glassware.   Lynn Lewis, the store manager, said that supplies were dwindling Wednesday and that the shop will not re-stock Sweet Briar merchandise.

Lewis said the store has seen a constant stream of students and alumnae since the news was announced Tuesday.   Facing overwhelming demand, Lewis said she shut down the bookshop’s Web site.   On Wednesday morning, students had formed a line in front of the door before the shop opened.

“Everyone wants to get something while its still here,” Lewis said.   “It’s just a sad time for everybody.”

Richard Lloyd, the father of a graduate of the class of 2007 who was shopping in the book store, said that among women’s colleges, “Sweet Briar was the crown jewel of all of them.”   Lloyd noted that there are no visible hints of financial distress on campus;  The school’s buildings are pristine and 
well-maintained.

Lloyd browsed the racks to pick up pink and green Sweet Briar bags and clothes.   “I wish I could buy the whole place,” he said.

A sign in the store read:  “All sales final.”

 T. Rees Shapiro and Susan Svrluga





MARK CUBAN: This is just the start of the college implosion

After 114 years, Sweet Briar College revealed this week that it's closing after the spring 2015 semester, an abrupt announcement that shocked students, alumni, and many people active in higher education.

One person not surprised by Sweet Briar's news was Mark Cuban, the entrepreneur and billionaire investor. For years, Cuban has been warning of a "student loan bubble," which he says will soon burst and leave many schools suffering in its wake.


On Tuesday, after Sweet Briar made its announcement, Cuban tweeted "This is just the beginning of the college implosion."

"As this little college saw, there will be other students that get their heart set on one college, and it won't be there when they graduate," Cuban said in an interview with Business Insider.

There's a growing education bubble, with rising tuition and students taking out loans they might not be able to pay back, according to Cuban.   "At some point," he added, "it's going to pop."

"When you're 18 years old and you don't really understand all the nuances of what it's going to cost to pay something back.   It was almost inevitable," Cuban said.

A few years ago, Cuban bought the domain "collegedebt.com,"  which publishes a live update of how much college loan debt is held by students.   The current total is just over $1.3 trillion.

This debt ultimately will outweigh most of the potential benefit you're getting from the college education, he said.   "What you thought you were going to get in quality of life by going to that college, you've just undermined with the amount of debt you're taking on," Cuban said.

The way to fix this growing college bubble, Cuban has argued, is for Congress to pass a law that caps the amount students can take out in loans.

"When you put a cap on loans, the money's not available to universities and colleges," Cuban said.  "They have to either raise student aid or lower tuition, or some combination of the two."

Potential students and their families, according to Cuban, are "going to get smarter and not want to pay."

"There's an efficiency of the market — particularly in this age, when all the information is available everywhere," he said.

A tiny drop in enrollment can have a big impact on a college that charges $40,000 a year, Cuban explained.   If they lose 500 students, they're $20 million a year short.   If they lose 1000, that loss jumps to $40 million.

"That's a huge number," Cuban said.

Cuban expanded on this idea in a 2012 post on his personal blog, Blog Maverick:

It's just a matter of time until we see the same meltdown in traditional college education.   Like the real estate industry, prices will rise until the market revolts.   Then it will be too late. Students will stop taking out the loans traditional Universities expect them to.   And when they do tuition will come down.   And when prices come down Universities will have to cut costs beyond what they are able to.   They will have so many legacy costs, from tenured professors to construction projects to research they will be saddled with legacy costs and debt in much the same way the newspaper industry was.   Which will all lead to a de-levering and a de-stabilization of the University system as we know it.

This change, Cuban writes, "can't happen fast enough."


Peter Jacobs






A college with a $94 million endowment is shutting its doors, and people in higher ed should be scared

A women's liberal arts college in Virginia announced Tuesday that the spring 2015 semester would be its last — even though the school still has a $94 million endowment.

Sweet Briar College — located near Lynchburg, Virginia — will close "as a result of insurmountable financial challenges," the school said in a statement.

Sweet Briar administrators cited several trends that informed the decision to close, including the declining number of female students interested in all-women colleges and the dwindling number of students overall interested in small, rural liberal arts colleges.

Last year, Bloomberg Businessweek reported that small, private US colleges were in a "death spiral" in light of dropping enrollment rates.   This decline comes amid competition from cheaper online colleges and community colleges, which are enticing to students in a job market that's weaker than it once was.

Several colleges similar to Sweet Briar have recently made changes to survive financially, according to Scott Jaschik at Inside Higher Ed.     But each choice has come with its own trade-offs.  Jaschik highlights two other women's colleges in Virginia:

Mary Baldwin College has embarked on a plan to preserve its identity as a residential undergraduate liberal arts college by creating new colleges of education and health professions.   College leaders say this approach will make the women's residential college financially sustainable, but many professors fear that the institution's liberal arts ideals are being compromised.

Randolph-Macon Woman's College, meanwhile, renamed itself Randolph College and in 2007 started enrolling men.   As has been the case at many women's colleges making that decision, some alumnae objected.

Randolph College's endowment is over $125 million.

The Sweet Briar statement in part reads:

In March 2014, the College began a strategic planning initiative to examine opportunities for Sweet Briar to attract and retain a larger number of qualified students and determine if any fundraising possibilities might exist to support these opportunities.   Unfortunately, the planning initiative did not yield any viable paths forward because of financial constraints.

Speaking with IHE, Sweet Briar College President James F. Jones Jr. lamented the closing of the college as a part of a broader change in "the diversity of American higher education."

"The landscape is changing and becoming more vanilla," Jones said.

As Jaschik notes, Sweet Briar's closing is not unique, especially given the financial burdens many schools have faced since 2008.   But, Jaschik writes,   "the move is unusual in that Sweet Briar still has a $94 million endowment, regional accreditation and some well-respected programs."

Shutting the school now — as opposed to when Sweet Briar runs out of funds — will allow the college to offer help to its students and faculty as they transition out after the semester.

"We have moral and legal obligations to our students and faculties and to our staff and to our alumnae.   If you take up this decision too late, you won't be able to meet those obligations," Sweet Briar College board of directors chairman Paul G. Rice told IHE.

Here's how Sweet Briar plans to offer support, according to IHE:

While all employees will lose their jobs, the college hopes to offer severance and other support.   Students (including those accepted for enrollment in the fall) will receive help transferring.   This semester will be the last one at the college, but it will remain officially open through the summer so that students can earn credit elsewhere and transfer it back to Sweet Briar to leave either with degrees or more credit toward degrees.

Sweet Briar announced on its Facebook page that it has expedited transfer arrangements with four local colleges.




Here's when an imploding Virginia college probably knew it was in serious trouble

Sweet Briar College abruptly announced Tuesday that the school would close after the spring 2015 semester, surprising students and faculty at the 
women's liberal arts college in Virginia.

However, Sweet Briar had been in trouble for some time. Like most colleges, it was seriously affected by the economic recession in 2008, as potential students were unable to pay tuition.

As Scott Jaschik at Inside Higher Ed reported in November 2009, many colleges chose to raise the amount of financial aid they awarded to keep their enrollment numbers steady.   Jaschik highlights Sweet Briar as a college that kept its financial aid at the same level — and suffered the consequences.

In the fall 2009 semester, Jaschik reported, Sweet Briar ended up enrolling 605 students, rather than the 650 it had anticipated.   While that may not 
seem like a large number, 45 fewer students on a campus of only a few hundred can have a major financial impact on the college.

That was when the school probably knew it was in trouble.

Reporting on the college's closing, Jaschik found that these trends continued at Sweet Briar, even as the college began to offer more financial aid. 

For the 2014-2015 academic year, even though Sweet Briar discounted its tuition significantly, the overall enrollment hit a six-year low of 561  students.

More telling of the college's problems, though, was the converse relationship between the number of applications Sweet Briar received and the number of students who actually enrolled.

"While applications were going up as a result of intense efforts by the admissions office, the yield (the proportion of admitted applicants who 
enroll) has been plummeting," Jaschik reports.

Sweet Briar's yield was 33.3% for the 2009-2010 academic year, and it dropped to 20.9% by the 2014-2015 academic year.

In a statement Tuesday announcing the college's closing, Sweet Briar administrators cited several trends that informed the decision to close, 
including the declining number of female students interested in all-women colleges and the dwindling number of students overall interested in small, rural liberal arts colleges.

However, the college had been in trouble for some time. In 2011, burdened with declining enrollment numbers and in need of new revenue sources, Sweet Briar unveiled a plan that was supposed to save the school.

The plan — called "A Plan for Sustainable Excellence" — was developed under former Sweet Briar president Jo Ellen Parker and called for, among other potential solutions, increased recruitment of potential students.

"Sweet Briar faces one immediate and imperative need: to grow enrollment as aggressively as possible without construction of additional facilities," according to the 2011 plan.

In particular, the college hatched a plan to find students who were highly likely to attend Sweet Briar, thus maintaining a high "yield" — the percent of admitted students who end up enrolling in the college.

Here's how the college planned to grow its enrollment:

Sweet Briar's admissions and recruiting strategy needs to be appropriate to a small, highly distinctive, "niche" educational experience.   That is, the strategy needs to assume a highly efficient and relatively narrow admissions funnel.   Like any niche or highly specialized product or experience, Sweet Briar's best strategy is to rely on identifying and reaching those most likely to value what it offers as early as possible in the recruiting process and then cultivating them intensively.

In a footnote, the plan states, "Rather than attempting to attract many thousands of inquirers and accepting a relatively low conversion and yield rate — a 'wide funnel' — Sweet Briar should refine its ability to identify and contact high-likelihood prospective students and focus on them — a 'narrow funnel.'"

The 2011 plan sought to recruit equestrians, environmentalists, and Girl Scouts, among other groups. It also called for increased recruitment in the area surrounding Sweet Briar,  "with specific attention to demographic diversity (responding to research about the geographical preferences of 
prospective students from Latina and African-American populations),"  among other nearby groups.

This seems to be where the 2011 plan failed the school.   Rather than finding more students who would likely attend the school if accepted and 
maintaining its yield rate, the opposite appears to have happened.

Since this plan was put forward in 2011, Sweet Briar's yield and enrollment dropped significantly, even as applications soared — rising from 643 in 
2011 to 936 in 2014.

The overall enrollment at the college dropped from 610 for the 2011-2012 academic year to 561 for the 2014-2015 academic year.

Likewise, Sweet Briar's yield was 36.8% for the 2011-2012 academic year, and it fell to 20.9% by the 2014-2015 academic year.   The yield — a very desirable statistic for colleges — had actually been growing for the two years prior to the 2011 plan.

Although Sweet Briar seems to have succeeded in targeting potential students to apply to the school, it may have faced insurmountable challenges in 
actually convincing those students to attend once admitted. 

In a statement Tuesday announcing the college's closing, Sweet Briar administrators cited several trends that informed the decision to close, 
including the declining number of female students interested in all-women colleges and the dwindling number of students overall interested in small, rural liberal arts colleges.

This unfortunately echoes the very problems that the 2011 plan was hoping to address.   As it states, "Sweet Briar seeks to be the example that proves 
that 'small' can be dynamic and vital, that 'rural' can be sophisticated and connected, and that the liberal arts as traditionally understood gain 
meaning when they engage reflectively with practical experience."





Sweet Briar may have to give more than $50 million back to donors
 ABBY JACKSON 


Sweet Briar College, a women's liberal arts college in Virginia, announced on Tuesday that it would close its doors for good after the spring 2015 semester.

It also has a $94 million endowment.

So what exactly happens to nearly $100 million in endowment money when a college ceases to exist?

The college might be obligated to pay much of it back to donors who intended the money to be used while the college was still functioning, according 
to Ronald Ehrenberg, director of the Cornell Higher Education Research Institute.

"A large fraction of the funds in an endowment are restricted for specific purposes," Ehrenberg, a professor of Industrial and Labor Relations and 
Economics at Cornell, told Business Insider on Wednesday.   "My guess is that in those cases they would have to go back to donors, and, if the donors are deceased, to relatives of the donors and get permission from them to use the funds to aid in the closure."

People who give money to colleges presume those funds will benefit the college and campus life, according to Ehrenberg.   They would most likely be owed the money if the college were to close.

"They would have to refund the funds back to the donors," he said.   "I'm assuming the money would go back to the donors because the donors had donated the money to last the university in perpetuity, and there's no longer a university there — or, in this case a college."

As of June 30, 2013, financial statements for Sweet Briar Institute (the parent company of Sweet Briar College), showed the endowment size to be $90 million.   That consisted of $19 million of unrestricted funds, $18 million of temporarily restricted funds, and $53 million of permanently restricted funds.

According to that same financial statement, unrestricted assets are "free of donor-imposed restrictions."   Temporarily restricted assets are "limited in use by donor-imposed stipulations that either expire by the passage of time or that can be fulfilled by appropriate action of the institute." And permanently restricted assets are "required by donor-imposed stipulations to be held permanently by the institute."

According to Ehrenberg, there is a strong case to be made that the $53 million in permanently restricted assets should be paid out to those who 
donated that money.


We reached out to Sweet Briar College for comment regarding its plan for the endowment and did not hear back.




Hollins University tells it's Students not to Worry

We are saddened to learn that Sweet Briar College has announced its intention to close at the end of the current semester. While Hollins and Sweet 
Briar have enjoyed a lively rivalry for decades, the foundation of our relationship with one another has always been rooted in a strong spirit of 
sisterhood.   However, Hollins and Sweet Briar have historically been very different schools.

Hollins is strong and growing stronger as we approach our 175th anniversary in 2017.   For example:

In contrast to the daunting fiscal challenges at Sweet Briar, we are on solid financial footing, operating with no debt.

Thanks in large part to the generosity of our alumnae, our endowment has reached a record $180 million, making it the fifth largest among all 
independent colleges in Virginia.

Our most recent fundraising campaign, completed in 2010, raised $162 million, and remains the largest of any southern women's college.

We see evidence of the value of the educational experience at Hollins every day:

Students from 44 states and 17 countries are enrolled here.

Applications for undergraduate admission are at the highest level in 12 years.

The quality and diversity of applicants to our undergraduate and eight coed graduate programs is outstanding.

We are growing our academic programs.   Last year, we added a new honors program, a Bachelor of Science degree in environmental sciences, new graduate certificates in playwriting, and a graduate program in children's book writing and illustration.

Young women come to Hollins eager to learn, ready to take chances, and poised to begin the next chapter of life.   But when they emerge, they aren't just graduates in liberal arts, mathematics, or science;  they are leaders, decision makers, and cultural shapers.   Hollins students develop a strong sense of self and a clear path to success. 

We will work closely with Sweet Briar in the next few months to create openings for their current students to share the Hollins experience and complete their degree programs in a women's college environment.   It will be up to the students to decide if Hollins or another college or university is the right fit for them.

This is a difficult time for our friends at Sweet Briar.   But here at Hollins, with no debt, a strong endowment, a growing applicant pool, and 
incredibly loyal and generous alumnae, we remain optimistic about the path that lies ahead.   We are committed to quality women's undergraduate liberal arts education and coeducational graduate programs, and passionate about inspiring tomorrow's leaders.   At the same time, we know the future makes no promises to anyone.   We will continue our efforts to preserve and strengthen Hollins for the next 175 years.



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