The Case of Hampshire College; or Why Bad Things Don't Have to Happen to Liberal Arts Colleges (UPDATED)

The season's higher ed masterplot is easy to state: liberal arts education is a financial failure; financial success requires mega-universities.

Whatever the partial truths contained in these claims, nothing this winter provided actual evidence for them.  They also conceal the real factor that's undermining private as much as public higher ed-: the unnecessary obsession with its private funding.

Alleged proof of the liberal arts's fiscal demise is coming in the form of closed or closing liberal arts colleges.  These arrived on the heels of the closure of liberal arts programs last year (like Wisconsin's Stevens Point that we covered in two parts).  Stephens Point now appears to be the tip of the iceberg: In January, CHE announced a forthcoming Modern Languages Association finding that 651 language programs have closed in the last 3 years, without academia really noticing.  Meanwhile, with only local fanfare, 17 liberal arts colleges have closed in the last five years in Massachusetts alone. Moody's claims that 1 in 5 small liberal arts colleges are under stress.

The best known case is Hampshire College.  Forever young and poor, it epitomized the creativity ideals of the whole liberal arts college genre, tied to customized majors and the small, intense classes that underwrite the "active learning" we are all supposed to have.  But Hampshire's enrollments fell 17 percent between 2010 and 2017.  Most universities survive on enrollments, and Hampshire's small endowment meant it had to find new revenues. (How much money they had and what they borrowed is in dispute.)

But Hampshire didn't become a poster child for liberal arts failure until the president's bizarre January 15th announcement that Hampshire was "carefully considering whether to enroll an incoming class this fall." This was followed by a February 1 Board of Trustees decision not to admit a full freshman class--which, as sociology professor Margaret Cerullo noted in her excellent Nation piece, was an attack on their own revenue base.

And yet Hampshire's trouble doesn't prove anything about the innate unsustainability of the liberal arts if it is self-inflicted.  That is clearly the situation.  President Miriam Nelson's initial statement didn't really make sense, as she combined her declaration of emergency with the comment that, "at Hampshire our budget is balanced, our $52 million endowment has performed well, and the success of our educational model is confirmed by an array of stellar data. We continue to be among the top three percent of institutions whose students go on to earn a research doctorate." 

Instead, Nelson and the Board seem to have artificially induced Hampshire's crisis to court potential suitors, most likely to UMass-Amherst, which had just taken over failing Mt Ida College in Newton.

Instead of praise for making the tough call, Nelson and the Hampshire Board of Trustees got the harshest appraisals I've seen dished out to college management.  In her overview in the New Yorker, Masha Gessen wrote, "Secrecy and confusion remain the defining characteristics of the Hampshire crisis."  Since its founding, Hampshire College has raised the question of whether students and faculty could manage themselves without top-down administration.  The question is being raised again, this time by its managers' incompetence.

The college leadership has wrought disaster.  Gessen writes,

Nelson is expected to announce a second wave of layoffs, in April. She told me that the scale of the layoffs would match the loss of revenue resulting from admitting a much smaller freshman class—that is, around a quarter of the college’s operating budget. Hampshire faculty members, in keeping with the school’s education philosophy, are not protected by tenure—back in the sixties, the idea was that tenure encouraged passivity in academics, and its absence would motivate them to continue to grow and develop. Word among Hampshire faculty members is that half of them are likely to lose their jobs. According to Barskova, because Hampshire has traditionally fostered co-teaching, the looming layoffs will kill the academic program.

Nelson and her board may turn out to have destroyed the college rather than sold it, and for no good reason.

Other criticism came from Yale management professor Jeffrey Sonnenfeld, a specialist in higher education leadership.  He was writing in Fortune, which you'd expect to support this apparent example of disruptive innovation, except that just about everybody is sick of it and its regular failure to make things better.  Sonnenfeld noted a total failure of the Board to make use of the college's assets:

the college board’s executive committee framed this [matriculation] challenge as an existential crisis . . . and their actions have since created chaos. And rather than locate better ways to mobilize their own many assets—Hampshire’s distinctive mission, the Five College Consortium community, a strong alumni network, and a largely successful existence as an innovative education model—to a recovery, Hampshire’s leadership appears to have panicked.

Interestingly, Sonnenfeld tied this gross underestimation of the college's value to a failure of management to work with its wider community.

Over the course of the fall, Nelson never consulted her five living predecessors, faculty leaders, or other campus constituencies. Nor did she appeal to alumni about her dire assessment of Hampshire’s financial situation, a list which includes Stonyfield Farms chairman Gary Hirshberg, former CEO of Seventh Generation Jeffrey Hollender, renowned documentarian Ken Burns, and Pulitzer Prize winner Edward Humes. Gregory Prince, who was president of Hampshire College 16 years, envisioned tapping such alumni for a recovery plan involving various interconnected institutes. But in the panic, consultation—a cultural necessity in a liberal arts college founded on participation and engagement—simply did not occur and this important resource was overlooked.

Collaboration is in fact the foundation of intelligence in pretty much everything, but education managers only sometimes sees this.  Cerullo chronicles Nelson's failures on this front. Sonnenfeld cited former Hampshire president Prince calling for restored campus partnerships in Hampshire policy-making.  In spite of the insight of various individuals, higher ed admin culture has shifted in recent decades toward autocracy.  That has justified many a mediocre decision, including this one.

The inevitable New York Times mediation on the demise of communitarian ideals misses the point that Hampshire may close not because of liberal arts economics but because of the autocratic replacement of shared governance.

The liberal arts are often scapegoated for economic problems that come from the spread of the market model in higher ed.  Many, many people who can and should benefit from higher education cannot pay market price for it.  Markets fails to allocate higher ed efficiently--they give too much to the rich and too little to the poor.  Markets hand education out according to ability to pay, as they are supposed to do. But that isn't how societies allocate true public goods like quality healthcare, high school diplomas, and now bachelor's degrees.  Societies need relatively equal distribution of public goods that meet the same quality standard in all cases.  Such a distribution is always subsidized--where "subsidy" means society pays collectively for a just distribution through the tax system.  In other terms, capitalist societies are always partly socialist or they function very badly.  The key feature of neoliberalism--privatization of all interests and allocations--actually degrades the capitalism it seeks to expand.

In higher ed wea have this jerry-rigged system called student financial aid that offers selective subsidies without having to own market failure.  A college like Hampshire, which is private, typically uses endowment returns, gifts, and the full tuition of affluent students to subsidize poorer students.  Public colleges do the same thing with state appropriations (including direct aid to students).  Whether the college is private or public, its finances are now constituted by market failure. It needs the subsidy work-around from somewhere.

Private colleges are facing an artificial crisis borne of the national--wholly political--demand that they cover their very high quality educational operations entirely with private revenues.  Their students can't actually come up with this money: colleges are now discounting tuition in many cases by 50 percent in order to fill their classes.  This has nothing to do with the quality of the students but reflects the normal smart person's very limited personal wealth.  (The actual economics of public goods suggests that colleges should be discounting tuition anyway, since at least half the total value of a college degree is non-private, students should never pay actual cost in the first place (Stage 1)).

To function, Hampshire has to get a tuition subsidy for many or most of its students; enrollments decline because of insufficient subsidies that declining enrollments make even more insuffiicent.  The doom loop I describe in The Great Mistake applies to private as well as public colleges.  If President Nelson did in fact want Hampshire to be taken over by UMass, she was acknowledging (in a destructive way) that her private subsidy stream wasn't big enough, and could be fixed only with a bigger public one.

Let's pause to note that the thirty years propaganda war on the liberal arts, first for PCness and now for non-vocationality, has successfully scared customers away. But the liberal arts aren't only the most powerful rival of literalist, dispensationalist Christianity on the one hand and business autocracy on the other, but are the exception to college's problem with "limited learning," all of which happens in vocational majors (Figure 6).  The irony is that liberal arts colleges aren't just the most vulnerable sector of higher ed, but also its best.  The constant attacks on them are lowering overall college quality.  The attacks are enabled by the failure to understand public-good economics.

I drafted a Twitter thread on this a couple of days ago.  Liberal arts college quality comes from a combination of intense workload for students and small classes for active engagement with the material.   To make a crude contrast: a typical public college student takes 48 quarter courses for a 4-year BA. Of those 48 courses, how many will have 15 students or fewer?  Probably no more than 1 or 2, and quite possibly zero.  In contrast, at my alma mater, Reed College, I had only two courses with more than 15 students. The engagement difference adds up.

It costs much more money to do high-quality active learning.  Instead of facing this fact, the US is letting cost end the policy discussion rather than start it. The policy questions are: does the United States want to limit Hampshire-style quality to a small elite that can pay? Does it want to limit it to a group that is economically more diverse but still small (the high-tuition/high-financial aid model)? Or does it seek mass quality and see the liberal arts as something to scale up?

Politicians have been stuck in an anti-ambition mode for thirty years, catering to the tax revolt which is in large part a symptom of structural racism, which leads them not to want to pool public resources across racial lines. Operationally, this is moronic and self-destructive. it has lowered the quality of the entire national infrastructure, from roads to schools to housing.  The same is true of liberal arts colleges, public and private. Since they are more or less the best we have, refusing to fund them is tantamount to lowering overall attainment.

Liberal arts college leadership has been on the defensive for years, and is completely intimidated by criticisms of price. But the solution is not to let these colleges die so an even smaller elite gets to have their quality.  One alternative, mega-universities, with their dependence on charging significant tuition for online enrollment, are a way of kidding ourselves about quality as we give it up.

The key issue is that the whole ecosystem of higher education has been destabilized by shifting to a private cost structure that doesn't work.  Seeing colleges as private goods insures that society under-invests in them. A confident society sets goals for things like education and then figures out how to pay for it.  It does not downsize the goal to fit benighted leaders' ideas about the budget. The US has to decide if it wants real learning for all college students or just for the traditional, limited group.

If we do decide we want mass learning or democratic education, we're going to have to fix the business model. That will mean reversing privatization at private colleges too. Society and business will have to increase subsidizes to colleges and universities, not demand that universities subsidize society and business--which happens when we make students pay the cost of educational benefits that are actually half public. 

This social support for private college students will take the form of public funding for places like Hampshire.  This is a good year to start thinking about how to do it.

Photo credit: Katherine Taylor, New York Times

UPDATE. Both Hampshire's president and Board chair have resigned.   President Miriam Nelson's resignation letter can be read here.  It acknowledges that the secrecy of admin's deliberations was a problem while also trying to justify it as part of Hampshire's original charter.

Students, staff, and faculty are proceeding with the Renvisioning Hamphsire project. It's Facebook site is here.