Oberlin College outlook downgraded to ‘Negative’ by credit rating agencies
Oberlin grapples with finances, but does not appear ready to address its soured relations with its local community.
Oberlin College faces serious financial challenges, resulting from a variety of factors, particularly a decline in enrollment.
The “social justice” turmoil of recent years at Oberlin, the focus of local and national media coverage and mockery, likely was a contributing factor, as we pointed out in September 2017, Radical fallout: Oberlin College enrollment drops, causing financial problems:
While a general higher ed bubble, particularly for small liberal arts colleges, may be contributing to the decline, it’s hard to believe that Oberlin’s recent history of turmoil isn’t a contributing factor.
When given the choice of similar colleges, it would be logical for prospective students to stay away from the ones that are constantly generating negative headlines and appear to be bastions of radicalism.
Are the social justice chickens finally coming home to roost at Oberlin?
We followed up on that coverage in February 2008, including quoting from the student newspaper, The Oberlin Review:
President Carmen Ambar and other senior administrators have launched an 11-day presentation campaign in which all College and Conservatory faculty, administrative and professional staff, Student Senate, student media, and other constituencies will see the largest overview of Oberlin’s financial situation to date, along with Ambar’s proposed plan to rectify Oberlin’s ever-worsening deficit.
The College managed to reduce its deficit from $5 million to $3 million this year, largely due to a last-minute admissions push that secured an additional 27 students at the beginning of the academic year. Unexpectedly high investment returns after a market uptick also contributed to the decrease.
Despite the unexpected financial pickup, the College’s current structural model still yields a bleak future, as the deficit is projected to rise to about $9 million next year — and that’s if the market stays consistent.
The Oberlin administration has expressed confidence that the enrollment will rebound this coming academic year, but the credit rating agencies are not impressed.
The Bond Buyer reports on June 29, 2018, Oberlin College’s enrollment decline pushes outlook to negative:
Oberlin College saw its outlook reduced to negative from stable because of declining enrollment and weaker financial performance.
S&P Global Ratings changed the outlook on its AA rating for the private liberal arts college in Ohio Thursday and said that any further weakening in the school’s finances and failure to return to historical operating performance could pressure the rating on $200 million of debt. The school has no current plans to increase its debt.
“Oberlin has been facing what we consider enrollment softening for the past few years which has only recently increased to a materially significant level,” Ashley Ramchandani, S&P’s primary credit analyst on Oberlin College. “The declines are attributable to a number of factors, including changes to the college’s recruitment practices and transition to a new VP of Enrollment upon the retirement of the former VP of Enrollment in August 2017.”
Oberlin isn’t alone in facing the challenges of declining enrollment. Ramchandani said that declining demographics in the Midwest and some other regions as well as increased competition are common themes in higher education, particularly for small liberal arts institutions….
S&P’s action follows a similar move by Moody’s in October last year. Moody’s revised the outlook on its Aa3 rating to negative from stable because of “unanticipated enrollment volatility,” it said….
Oberlin anticipates a modest deficit of approximately $3 million on a full accrual basis for fiscal 2018 on a consolidated basis. “The college has relied on high endowment draws ranging from 5.4% to 6% in the past few years to offset operating deficits,” S&P said. The school has a sizable endowment of roughly $820 million as of June 30, 2017…..
Oberlin isn’t under threat of going out of business, but the austerity measures needed to try to stop the financial bleeding do call into question whether Oberlin’s new president, who took office a year ago, will take steps to salvage the college’s reputation along with its finances.
Oberlin is fighting two embarrassing lawsuits. In the first lawsuit, an expelled Oberlin College male student sued claiming the hearing process was biased and stacked against men, Lawsuit: Oberlin College sexual assault hearing process rigged, 100% conviction rate:
A male student who was expelled from campus in October 2016 for alleged sexual assault has filed a federal lawsuit against Oberlin. Though the lawsuit was filed in June 2017, it has not received any publicity. Yet the lawsuit contains allegations which, if proven, reflect that Oberlin’s system for adjudicating sexual assault accusations was fundamentally biased against males, at least during the 2015-2016 academic year.
In second lawsuit, involving the local Gibson’s bakery, Oberlin has been particularly aggressive in its defense, as we explored in Oberlin College lashes out at Gibson’s Bakery, portrays itself as victim.
The Gibson’s case, and the involvement of Oberlin College and its students in boycotting the bakery, generated so much local negative publicity that Oberlin felt it couldn’t get a fair trial in its home county. Oberlin’s attempt to transfer the case out of Lorain County failed, Judge rejects Oberlin College request to move town-gown lawsuit to another county.
From Oberlin’s scorched earth defense of the Gibson’s lawsuit, which includes trying to subpoena journalist records out of state (from us), it appears that Oberlin may not be ready, yet, to confront and address the problems it has created at home.
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Comments
I love this, great news.
Higher and harder
Education, that is….
The endowments will let them continue to be liberal a-holes for at least another 25 years.
Cutting a $9 million future deficit won’t be easy, and it will be more difficult the longer Oberlin waits to address it. I would look for faculty buy-outs and perhaps actual faculty reductions to pop up in the news in the near future. Unexpectedly, of course. It would be better perhaps to do some staff reductions, but staffs run most colleges and universities these days, so they cut themselves last.
Tone deaf
Cash’m out and take’r down… but try to find a way to keep their music department afloat.
Everyone ought to be able to do something, reasonably well. Oberlin has done that, reasonably well.
I wouldn’t consider them an institution of higher learning… but they are definitely in a position to be taught a lesson.
Worse:besides starbucks, who who hire a useless, thieving clown with an obelin diploma?
Humor as sorbet.
Oberlin Choir responds to Christina Sommers controversy
https://youtu.be/fxCSy7tpUME
Enjoy
LOL! Oberlin’s lawyers are now going to subpoena all the computerized files of everyone who reads this post, and who watches that video. Because CONSPIRACY!
An oldie-but-goodie. Thanks for sharing, Fen!
Wat? A woke choir signing of reality? I am speechless…and grinning. Thanks for heads up.
I’ve read somewhere that it’s a parody group and not the official campus choir. Not sure either way, still makes me chuckle
With a slight uptick in enrollments, and a higher-than-expected return on their investments, it is interesting that their credit rating was downgraded. That goes rather against that statement in the article that “Oberlin isn’t under threat of going out of business.” Perhaps their debt management isn’t as robust as the credit agencies would like to see? It wouldn’t be the first institution that has underfunded its debt obligations.
That just means that they didn’t lose as much money as anticipated. Of course, the unspoken irony here is that their investments likely did better because Trump was president. Some jokes just write themselves.
My solution for the college would be to get back to being a college, not a camp for social justice warriors. I mentioned that in a response to a solicitation for money awhile back. It is the focus on what I consider “extracurricular activities” which has diverted the college from its first mission. Oberlin has become a party school, unfortunately, it is the democratic, socialist, and green parties which dominate. It is sad though that the actions of perhaps 3-5% of the students who are uber radicalized are having a negative effect on what I hope are some still serious students on North Campus. Just for the record, Oberlin has generated more science PhD’s than any other liberal arts college in the country.
I am not sure when they lost direction, and under which president. I do know that during the Obama years that it was Obama this, Obama that, to the point where I sent in a snide email suggesting that they simply rename it the Obama Alumni Magazine. I don’t know if that changed since I stopped receiving the OAM after that. But I do think that they got intoxicated on unchecked liberalism and now it is time to pay the piper. I believe the whole Gibsons incident arose from a sense that one could scream “racist” at the top of their lungs and that there would be no accountability for their actions. I also think that there was a temptation to use the reputation of being “extremely edgy” during those years as a recruitment tool, and that many many more of those types of students matriculated, leading to them losing real focus. So when the opportunity presented itself on election night, they already had an angry mob present, and things tumbled out of control. Until someone admits that arrogance, pride, and self-righteousness are at the core here, I don’t see a good outcome, including after the Gibsons matter is settled. The multiple double-downs is also not encouraging, and likely the worst will come when the other serious older alumni, like myself, come to learn what has been happening for the last 18 months.
Similar antics made Antioch College go belly-up some years ago. Ph. D.-holders cannot learn.
You know leftists are willing to sacrifice Oberlin in the name of The Party if that’s what it takes. The communists hold strong when it’s someone else paying the price, and it’s not like I would be sad to see Oberlin’s faculty on the unemployment line (except their service staff).
If they’re all put out of work, at least the service staff has marketable skills.
I think the last paragraph should be modified to read:
From Oberlin’s scorched earth defense of the Gibson’s lawsuit, it appears that Oberlin’s legal team realizes that a trial will not only badly embarrass the University, but push it closer to bankruptcy. The cost-benefit analysis of mounting an expensive and ridiculous defense must pale in comparison to what they anticipate losing at actual trial would cost.
And, I suspect, as do they, that their chances of winning in court are the proverbial chance of a progressive in heaven.
Rats! Why is reply right over down thumb? No negative meant…I agree. Then there was the SJW progressive lawyer who died and was met at the pearly gates ….The lawyer extolled his virtuous career especially Obamacare and managed health care. He was ushered into heaven…but only for three days.
any sane lawyer would be telling them “You better settle on any terms you can get! Settle it! Sooner rather than later!!”
well, any lawyer except one who wants to jack up his fees by keeping a losing case going on as long as possible.
I am pretty certain that irrational thought is present, but not sure if it is the legal team or those directing the legal team. Is there a cut-off point where the legal team should say “no” lest they move into areas of incompetence and malpractice, or do they just get it in writing as to “we advised clients of a but they chose b?” Of course, they might be afraid to bring it up, since at least one Oberlin student stated that “no” was a violent trigger word.
I think Oberlin’s outcome will be as successful as the alcoholic who wants everything to get better and go back to normal, but also wants to continue drinking. You can only pick one, in my experience. Who knows, maybe it will become the birthplace of Liberalanon. They already have sufficient alcohological thinking patterns going on, and weatherwise, it is about as dismal as Akron.
I think that the second full paragraph, beginning with “We followed up on that coverage”, has the wrong date of February 2008 when it should be 2018. Otherwise, how could something from 2008 be a followup on something else written in 2017?
Anyway, I think it’s sad that a school that had a stellar academic reputation when I was applying to colleges in 1971 has damaged that reputation so badly by such ill-thought-out decisions.
Agreed. Oberlin used to be a good school. Now it’s a mess.
Tuition and fees (not including room and board) are over $52,000 for the coming school year. That’s as much as Ivy League colleges and four times the cost of state universities in Ohio. Why would anyone send a child to Oberlin?
anyone notice similarities between Oberlin and CA, IL, NY, MA etc
I’ve read somewhere that it’s a parody group and not the official campus choir. Not sure either way, still makes me chuckle.
It is a parody. A hilarious parody.
Oberlin delende est.
About a year ago, Jonathan Haidt made a semi-tongue-in-cheek proposal that colleges and Universities be honest about whether they are dedicated to truth or to their definition of social justice, and they could market themselves accordingly.
In the past few years a lot of schools have in fact so defined themselves, not by what they say, but by what they do.
Truth = places like Chicago and Purdue.
SJ = places like DePaul, Yale, Oberlin, Evergreen State, Mizzou (tho at Mizzou the state legislature and parents of recent HS grads are staging an intervention).