My alma mater, Oberlin College, has been having trouble fulfilling its budget needs and has been sagging in academic ranking. A major initiative has looked at solutions summed up in a final "One Oberlin" report.
What was the bad news that motivated these big changes (sources omitted, not in quite the same order and categories as in the original)?
Key facts about Oberlin’s budget:
o Without change, Oberlin’s cumulative deficit would have reached $162 million in 10 years beginning in FY2018 Note: This projection has already been mitigated by cost reductions underway during FY2019.
o Reductions of $11.1 million in the baseline budget are planned from FY2020 to FY2024 across the institution through the regular budget process — including the equivalent of 25 faculty FTE through attrition. Yet these reductions alone will not balance our budget. For this purpose, attrition includes both the decision to not replace some faculty members who leave Oberlin or retire, as well as the elimination of some vacant visiting professor lines. Cutting through attrition does not mean that all faculty hiring or replacement will end; similarly, the normal channels of faculty hiring and alignment will allow reallocation of replacement positions as needed.
o 83% of annual operating revenue comes from student tuition and fees.
o In 2016-17, Arts & Sciences realized net revenues of $23.9 million after direct and indirect costs, while the Conservatory lost $11.1 million.
o Arts & Sciences students bring in, on average, $10,000 more in tuition revenue per year than Conservatory students. Note: The Conservatory provides more financial aid per student in order to effectively compete for students with other top conservatories.
o Revenue loss based on lower costs of OSCA model yields a negative financial impact to Oberlin of $1.9 million per year. Note: Includes foregone student revenue, less program management costs if they reverted to the College.
Key facts about employee costs:
o Employee compensation — all faculty and staff — makes up 63% of Oberlin’s budget.
o The average salary for Oberlin’s Arts & Sciences faculty is 11.3% less than peers with whom we compete in recruitment, the Sweet 16.
o Adjusted for inflation, faculty and A&PS have forgone $5.5 million in total compensation since 2017 through salary freezes and benefits cuts. Note: Difference is based on projections of budgetary impact if there had been typical raises and no change in benefits during those two years.
o Oberlin’s average hourly staff wage is 34% higher than the average of four other Northeast Ohio liberal arts colleges (Kenyon, Dennison, Ohio Wesleyan, and Wooster). Note: These colleges represent similar institutions within the same region.
o Health care benefits cost $9,849 per year for each faculty and A&PS employee; health care benefits cost $16,984 per year for each hourly employee.
Key facts about students:
o In 2018, almost 80% of students admitted to Arts & Sciences who listed music performance as their primary interest enrolled somewhere else.
o 38% of our prospective students showed a strong interest in business.
o 42% of returning students have a strong interest in global public health.
o 91% of students admitted to the Conservatory listed career preparation as very or extremely important.
o Oberlin Arts & Sciences students secure career-related jobs by graduation at roughly half the rate of their liberal arts college COHFE peers.What Will Change?
Some of the most notable changes proposed (as paraphrased by me) are as follows:
1. Reduce the size of the music conservatory by 100 students and increase the size of the arts and science division by 100 students (since arts and sciences students generate much more revenue per student). This would also increase the competitiveness of the conservatory program, potentially making it more prestigious. The Conservatory is currently operating at a big, per student, deficit.
2. Hire some post-graduate fellows from top institutions to teach in the conservatory, because they can be quite good but are cheaper than tenure track faculty.
3. Increase music offerings for arts & sciences students (and remaining conservatory students) to make that more of a draw with resources freed up from reduced conservatory enrollment.
4. Add concentrations in business and in global health that would be more of a draw to potential students.
5. Increase interdisciplinary activities as a draw to potential students and faculty, and a way to react more quickly to a changing environment within academia.
6. Improve career services offerings, and the orientation of the college towards helping graduates develop careers as a draw to potential students. Ultimately, the implied hope is also that more students will "do well" instead of only "doing good" and that this will increase future donations to the endowment.
7. Improve winter term offerings so that 25%-30% of students stay on campus, some of which would involve ExCo (i.e. student taught class options, expanding an existing program in the college while keeping costs down). This would be accomplished, in part, by offering two credits of regular college credit for some options and, in part, by providing better options. This would be in part a draw for new students, in part a community building effort, and in part a way to utilize campus infrastructure resources and teaching capacity more efficiently.
8. Consolidate administrative functions currently incurred at the department level into multi-department divisions within the Arts & Science division in order to reduce administrative expenses.
9. Improved winter term offerings, reduced department level administration, and an increased arts and sciences enrollment, and increase music offerings for arts and sciences students, is intended to demand more teaching capacity from existing faculty than they currently provide (in lieu of laying off faculty). Professors will be expected to work harder, but they will stay employed.
10. Significantly reduce the amount of administrative and hourly staff (almost everywhere but career services) while integrating them with each other better, and significantly reduce the above market compensation paid to hourly staff right now. Compensation for faculty would probably be increased somewhat.
11. Reduce the amount of building space used by 20% by utilizing the rest more efficiently (especially by reducing boundaries between departments and departmental administrative space) and phasing out the least desirable buildings that drain the college's resources.
12. Increase the amount charged as rent to student co-ops so that there is not a net financial subsidy of them. The increase would be about $3,220 per 590 students who dine in co-ops, with a somewhat smaller increase for those who dine in co-ops but don't live there, and a somewhat larger increase for the 180 who both live and dine in co-ops. The data indicate, contrary to conventional wisdom, that co-op students are, on average, are more affluent than the average Oberlin student. Co-ops are significantly less expensive than ordinary dorm and dining service options: "In 2018-2019, to dine in a co-op costs $3,900 a year ($4,330 less than campus dining service). Living in a co-op double and dining in a co-op costs $8,730 ($7,608 less than living in a campus dorm and dining in campus dining service); living in a co-op single and dining in a co-op costs $9,900 for the year ($6,438 less)." Some of this savings arises from the labor provided by co-op students, but quite a bit of the savings, it turns out, comes from subsidies from the institution via below cost rents for the spaces used by the co-ops.
Analysis
Of Oberlin's nearly 3,000 students, nearly 2,400 are enrolled in the College of Arts & Sciences, a little over 400 in the Conservatory of Music, and the remaining 180 or so are enrolled in both College and Conservatory under the five-year Double-Degree program. Allocating double degree students 50% to each division, the planned cut in the size of the Conservatory's student body is about 20%. The increase in the size of the College's student body is about 4%. The targeted total enrollment would remain unchanged.
Admission to the Conservatory will become much more selective almost immediately, the student to faculty ratio in the Conservatory will fall, and career services will improve, as the changes are phased in over four years. Oberlin is currently ranked 7th in the nation for its music program (ahead of John Hopkins, the University of Southern California, Yale, Northwestern University, Carnegie Mellon, Indiana University, Bard College, Shenandoah University, and UCLA). The only institution which is not purely a music program (and the only institution which is not in a major coastal city) that is ranked higher is the University of Rochester (which is ranked 5th). It isn't unthinkable that Oberlin could rise to the number five spot with this change.
The increase in arts and sciences enrollment risks lowering admissions standards, but the clear intent of the plan is to mitigate that risk by upping the college's game in terms of new draws to the college that address several of the biggest factors that data shows has been causing prospective students to choose other schools instead of Oberlin in terms of curricular options. A 4% increase in comparable quality admissions yields is not unrealistic with some significant data driven changes in the college's offerings. Ideally, the changes will strengthen the attractiveness of the college even more and will allow it to become more selective again, something that has been slowly declining over the last couple of decades.
The plan has earned wide consensus support from faculty and other interested constituencies, and I am inclined to agree that this is a solid plan for dealing pro-actively with a gradual but serious crisis facing the college in a way that builds on the institution's strengths without compromising its core values, and with only completely unavoidable pain. (I am also struck, as someone who was highly involved in the student-faculty governance system while I was at Oberlin at how similar that system is now to what it was then.)
The increase in arts and sciences enrollment risks lowering admissions standards, but the clear intent of the plan is to mitigate that risk by upping the college's game in terms of new draws to the college that address several of the biggest factors that data shows has been causing prospective students to choose other schools instead of Oberlin in terms of curricular options. A 4% increase in comparable quality admissions yields is not unrealistic with some significant data driven changes in the college's offerings. Ideally, the changes will strengthen the attractiveness of the college even more and will allow it to become more selective again, something that has been slowly declining over the last couple of decades.
The plan has earned wide consensus support from faculty and other interested constituencies, and I am inclined to agree that this is a solid plan for dealing pro-actively with a gradual but serious crisis facing the college in a way that builds on the institution's strengths without compromising its core values, and with only completely unavoidable pain. (I am also struck, as someone who was highly involved in the student-faculty governance system while I was at Oberlin at how similar that system is now to what it was then.)
This is a better plan than what would have been the easiest and less thoughtful option - to decrease enrollment across the board to make it possible to lay off more faculty and increase endowment funds per student, continue to cap faculty pay, and to reduce financial aid in the college of arts and sciences (increasing tuition in either the college or the conservatory, and reducing financial aid in the conservatory, is largely foreclosed by market forces).
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