Some Catholic Colleges Won’t Make It

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by Kristine Christlieb  •  •  March 23, 2020   

Catholic higher education leader calls closures 'entirely possible'

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DETROIT ( - Father Dennis Holtschneider, C.M., president of the Association of Catholic Colleges and Universities (ACCU), tells Church Militant that the Chinese virus may well be the tipping point that causes one or more fragile Catholic institutions of higher education to close.

Holtschneider is new to ACCU (as of January 2019), but he is a veteran leader in Catholic higher education. He was president of DePaul University in Chicago, Illinois from 2004 to 2017, a period many consider the university's boom years. He served briefly as executive vice president and chief operations officer of Ascension, the world's largest Catholic health system, before taking the reins of ACCU.

When asked about the financial market-hit endowments are taking at small, Catholic colleges, Holtschneider told Church Militant endowment income was not the primary financial problem Catholic colleges are facing. Instead, he pointed to three factors that are creating the financial crisis and that likely will be the factors that lead some institutions to fail.

Fr. Dennis Holtschneider

Why Some Catholic Colleges Are in Trouble Right Now

Unlike some public colleges and universities, all the Catholic colleges in ACCU have sent their students home because of the coronavirus and are refunding their room and board. According to Holtschneider, "That is income these colleges already have spent and they don't have the cash on hand to repay. They may have to borrow money to cover the refunds."

Then there are the employees. "All these colleges are trying to keep their people employed. Some can work online, but for others, their jobs can only be done on-site." Beyond the health risks associated with the crisis, Holtschneider is obviously aware of the financial toll the virus is taking on college employees and their families. He painted a picture of some institutions operating very close to the margin with fixed costs and income that have little tolerance for errors or emergencies.  

Finally, colleges are being forced to immediately offer students online learning to complete their classes. "There are real costs associated with implementing this kind of instruction, especially when it must be done quickly and comprehensively across the curriculum," Holtschneider said. 

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"Some institutions will be able to borrow their way out of the crisis, others won't," Holtschneider told Church Militant. He mentioned that Moody's Investor's Service downgraded the higher education sector from stable to negative last week. Holtschneider described what's a stake: "When lenders consider extending credit to a college, they are looking at the college's income stream, projected income from philanthropy, and current debt load."

Broader Market Forces Destabilizing Higher Education

Three decades ago, it was rare for a college to go bankrupt. In 1991, when Tarkio College, a small Presbyterian institution in rural, northwest Missouri, closed, the New York Times — as well as every major newspaper in the region — sent a reporter to cover the story. But in recent years, a number of factors have weakened the higher education market, and college closures no longer make headlines.  

The most obvious concern for the future of higher education is the declining college-bound population. The pool of students applying for college is shrinking with no sign of reversing in the near future. Americans are beginning to rethink the value of higher education, especially those taking a moment to do a cost/benefit analysis. There's the related problem of young people spending their lives servicing student loan debt.  

Some institutions will be able to borrow their way out of the crisis, others won't.

Now, with the Chinese virus crisis, Americans are realizing that students can earn a perfectly adequate college degree sitting in front of a computer screen. As Tucker Carlson pointed out, online learning may not be an ideal way to earn a degree but it beats a lifetime of student debt. The Chinese virus has allowed Americans to peek behind the curtain, and higher education may never be the same.

Among Catholics who want their children to earn a Catholic degree, there is skepticism about whether the educations their children are getting are any different from the educations they would receive at a secular institution. Some institutions, like Manhattanville College of the Sacred Heart and Webster College, are honest enough to publicly declare themselves "no longer Catholic." Others try to fly under the radar, and leave it to parents and students to draw their own conclusions based on their curriculum and campus culture.

The current Chinese virus crisis will sift the higher education wheat from the chaff, and Catholic institutions will not be immune. Holtschneider asks Catholics to pray for the Catholic college presidents who are trying to navigate the cultural rapids coming fast upon them.  

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