Drop in Students, Income Squeezes Small Colleges

THE small private liberal arts college is having a harder time finding both students and funds these days. Growing competition from public colleges and universities is a key reason.

More in the declining pool of potential first-year students are choosing lower-cost public colleges. While enrollment in 1950 was almost evenly split between public and private colleges, four out of five students now go to public institutions.

Those same public colleges and universities, once supported wholly by government funds, now aggressively court many of the same corporations and foundations long tapped solely by private colleges.

Richard Rosser, president of the National Institute of Independent Colleges and Universities, notes that some states actually require public universities to match legislative contributions through fund-raising.

Mr. Rosser says that while private colleges in the mid-'70s got two-thirds of all corporate gifts to higher education, they now get about half the total. That preference for public institutions moves to a 10 to 1 ratio - three times more per student - when corporate tax payments are included.

The amount of federal student grant aid is significantly less. State help has barely kept pace with inflation.

Small private colleges have had to put more of their income into financial aid to keep enrollment diverse. Half of all grants to needy students to attend private colleges now come from the colleges themselves.

The cumulative effect of these shifts in enrollment, corporate giving, and student aid adds significantly to the small college's financial burden.

``These new factors are going to make it increasingly difficult for a number of private institutions [to survive] unless we get more help at the federal and state level,'' says Richard Rosser.

``I wouldn't be surprised to see a rather large number of private institutions go under in the next 10 years,'' says Charles Anderson, senior staff associate with the American Council on Education.

A recent report on the essential role of private higher education by an Education Commission of the States task force agrees that the small liberal arts college faces the most serious financial pressure.

``That was the sector we felt was at greatest risk,'' says Aims McGuinness, the commission's director of higher education policy.

The commission's report calls on states to recognize the contribution of private colleges and universities both in making public policy decisions and in providing more equitable, need-based student aid. Mr. McGuinness says that includes weighing the resources of and impact on private institutions in every decision from starting a new public college close to an existing private one to launching what may be a duplicative adult education program.

Many small schools also are trying harder these days to help themselves. Allen Splete, president of the Council of Independent Colleges which represents 300 small institutions, says many have set up their own development offices and alumni data banks in the last decade.

``They've learned a lot about how to do fund-raising and some have been very successful,'' says Mr. Splete, ``but their most important gain is self-confidence.''

To date there has been no dramatic increase in private college closings. Less than two dozen of the smallest have closed in the last five years, according to the American Council on Education. Several others have merged. Many mergers and closings have involved Roman Catholic women's colleges which hit enrollment problems, says Sherry Harris who edits the Council's annual listing of accredited post-secondary institutions.

Accreditation is crucial to every private college and university. Student aid depends on it. So does the transferability of student credits. Financial difficulties often are key in determining who does not get accreditation.

``It's one of the easiest ways to tell if an institution is in trouble,'' says Patricia Thrash, executive director of the North Central Association of Colleges and Schools in Chicago. ``Lack of adequate financial resources eventually affects your ability to do well everything you want to do.'' Telltale signs, she says, include hiring of large numbers of part-time faculty, deferred maintenance, and a ``frantic'' marketing position. ``Sometimes the glossier the brochure, the more the problems,'' says Ms. Thrash.

Good management and a clear sense of purpose are often key variables, too, in whether an institution survives or falls, says Mr. McGuinness. ``It's amazing how many places you'd never dream would survive that have done beautifully,'' he says.