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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