Coming Demise of Small Liberal Arts Colleges?

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The news that Sweetbriar College will be open in the fall no doubt pleased many alums of that institution, but while the school has been temporarily rescued from imminent death, it is still very much on life support. What are the prospects that Sweetbriar will be alive and well a decade from now? Certainly far better than zero, but also not anywhere near 100 percent.

The Sweetbriar experience is one we will see a lot in coming years, I suspect. Before looking at the broader phenomenon, let’s look specifically at Sweetbriar. What can it do to improve its prospects? Some things are decidedly low-tech. Sweetbriar could, for example, accept male students. The current single-sex model seems not to be working well, so making the school co-ed is certainly one option. Some of the alums working to save the school are probably dead set against this, and there are some advantages to single-sex education, but many other former single-sex schools (Harvard and Vassar come to mind) have flourished in a co-ed environment.

A second low tech thing Sweetbriar can do is hire good new leadership. Its last non-interim president was apparently much disliked, showing contempt for some of Sweetbriar’s enduring traditions. The interim president, James Jones, is now out. Likewise, the governing board is changing radically.

Sweetbriar is one of a number of relatively small Southern colleges historically catering mainly to students from relatively affluent backgrounds – Washington and Lee, Davidson, Sewanee (University of the South), and Hollins are four other examples that come to mind; even the University of Virginia fits this mold. Some of the other schools in this genre seem to be flourishing, and I suspect Sweetbriar could learn from them. Perhaps the model of vigorous discounting from a high sticker-price tuition (what Sweetbriar has done) is not the best model – Sewanee has experimented with cutting the base fee, but doing less discounting. Sweetbriar has gone for “access,” vastly increasing the proportion of low-income students, in the process probably robbing the place of its distinctive character.

This brings me to the macro dimensions of the Sweetbriar story. What is happening at Sweetbriar is beginning to happen at a lot of places. The pool of 18-to-22 year olds is stagnant at the moment. College costs have risen relative to the perceived benefits.  Overinvestment in higher education has lowered the rate of return and increased the risks, as manifested in the massive underemployment of recent graduates. The nation’s economic growth has fallen sharply as the nation has increasingly embraced a European-style welfare state and neutered the rugged individualism that, along with the rule of law, enforcement of private property rights, a relatively predictable currency, and a few other things, has made America the planetary economic superpower. Lower growth, in turn has both reduced subsidies of higher education by third parties (governments and private philanthropy) and reduced the capacity of students to pay tuition bills.

The progressive impulse is to prevent failure. Thus liberals like President Obama, Elizabeth Warren, and Hillary Clinton want to forgive student-loan delinquencies or charge unrealistically low interest rates on loans. Soon, they will probably want to save failing colleges (except the for-profit institutions, which some want to destroy on ideological grounds). We should resist this impulse to save the colleges. Creative destruction and disinvestment in higher education are desperately needed; our charity led to subsidies that have prevented a needed transformation from occurring. Some of those in trouble will reinvent themselves with new leadership, ideas, or technologies. Whether Sweetbriar, a school whose strength historically has come as much from its consumption value (e.g. promoting horseback riding and fancy parties) as its role as a creator of human capital, will succeed only time will tell.

Richard Vedder directs the Center for College Affordability and Productivity, teaches at Ohio University, and is an Adjunct Scholar at the American Enterprise Institute.

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