Hampshire College trying to fight through a broken business model

Two days before classes started at Hampshire College in September, the school’s incoming first-year students – all 13 of them – attended a welcome reception in the campus’ new R.W. Kern Center. A motley mix of plaids, khakis and combat boots, the group lined up to shake hands with the college president and receive small bells – symbols of the large brass bell they’ll ring upon completing their “Division III,” the epic independent project required to graduate. If, that is, Hampshire survives long enough for them to graduate.

Nine months earlier, the Massachusetts college – mired in financial trouble – had launched a search for a partner to merge with and announced that it might not admit a new freshman class in the fall. Coming after a series of mergers and closures of New England schools, the announcement provoked alarm in the world of higher ed. Eventually, Hampshire offered a place to 70-odd students it had accepted early or who had taken a gap year before enrolling – but warned that there was no guarantee it would stay open.

Among the baker’s dozen who decided to take the risk was Devin Forgue. Despite its strapped budget, Hampshire offered him better financial aid than the University of Massachusetts at Amherst. He considered the less expensive Holyoke Community College, but he didn’t want to give up on his dream. Forgue has an unusually specific life ambition: to broker a global compromise to increase funding for space research. He plans to study a combination of political science, anthropology, international relations and astrophysics. And he thought that Hampshire, an experimental college that asks students to design their own course of study, was the best place to do that.

After four days of orientation with “the 13,” as his class was known (one student has since dropped out), Forgue felt he’d made the right decision. A slight 19-year-old with longish brown hair, he’d already experienced the kind of bull sessions about politics and philosophy that make college so special. “Every single one of the 13 is the type of person ... I was hoping to meet,” he told me.

Forgue’s classmates sounded equally satisfied. “Hampshire shows people that it’s OK not to learn in this very structured way that everyone has been taught ever since preschool,” said 18-year-old Flynn Caswell. “When I came here for the first time, it was really cool for me to see that learning can be engaging, instead of sitting in class thinking I’d rather be doing something else.” At the reception, as they rang their bells and posed for a picture, the freshmen offered the weary Hampshire community hope that the college might, somehow, survive.

Poll most top educators about their ideal kind of learning for the 21st century, and they’ll probably sound a lot like a Hampshire student. The virtues of open-ended thinking and project-based learning will be familiar to any parent who has toured a bougie preschool. But thanks to a slow recovery from the 2008 recession, rising student debt and class anxiety, parents and students are looking at college less as an intellectual experience and more as an insurance policy – and that calls for colleges that offer proven outcomes, measurable skills or exceptional prestige.

All this means that private colleges like Hampshire are struggling to find enough students able or willing to pay their high sticker prices, and the situation is only likely to get worse. Because of low birthrates following the Great Recession, Carleton College economist Nathan Grawe predicts that the four-year-college applicant pool is likely to shrink by almost 280,000 per class, over four years, starting in 2026, a year known in higher ed as “the Apocalypse.” As youth populations decline everywhere but the southern and western United States, colleges in New England and the Midwest will find it increasingly hard to lure students, particularly those able to pay.

The problem is the business model. Colleges have long counted on wealthy students to subsidize the cost of education for those who can’t afford it. But for many institutions, that is becoming untenable. With only a $52 million endowment, Hampshire is especially vulnerable to this reality, but enrollment experts say it will affect many schools outside the most elite. Schools like Harvard, Princeton, Yale and MIT will be fine, says Jon Boeckenstedt, Oregon State University’s vice provost of enrollment management. “It’s those colleges in the middle of the curve, with good, solid, well-known reputations but not spectacular financial resources or academic reputation, that are feeling the pinch,” he explains.

In May, the Chronicle of Higher Education reported that several private colleges would just miss their enrollment targets this fall, including Bucknell University in Pennsylvania, ranked 35th among national liberal arts colleges by U.S. News & World Report. Also in the spring, the College of the Holy Cross in Massachusetts quietly ended its (increasingly rare) needblind admissions policy, citing unsustainable spending on financial aid. And after a couple of years of missed enrollment targets and budget shortfalls, Ohio’s Oberlin College will add a business concentration – while trimming 100 students from its prestigious music conservatory and adding more to the college, which draws wealthier applicants. “For some families, college may be the largest investment in their lives. ... What they’re expecting from it is the same type of long-term benefit that you might get from your multiyear mortgage,” explains Oberlin President Carmen Twillie Ambar. “People are asking us to demonstrate the value of liberal arts.”

If the economic troubles of elite liberal arts institutions have you mock-playing an air violin, consider the consequences. For one, there’ll be fiercer competition for spots at the most prestigious schools – a sport already so gruesome, actress Felicity Huffman is doing jail time for gaming it. For another, there will be fewer opportunities for low-income students who rely on generous financial aid packages at small liberal arts colleges as one of the few tickets into the upper class. It may also mean the retreat of the only part of higher education that is uniquely American. Residential liberal arts colleges are rare in other parts of the world. For more than 200 years, they’ve made American higher education an exceptional laboratory for fostering empathy, creativity and innovation. We’ve gotten so used to them, we may not notice what we’ve lost until it’s gone.

If Hampshire’s story were a “Mission: Impossible” movie, last winter’s decision not to take a full class was the moment that started the bomb-detonation countdown. For a school that relies on tuition and fees for 87% of its revenue, choosing to shed a fourth of its students was close to financial suicide. The gravity was not lost on the community. Throughout the spring semester, the Amherst, Massachusetts, campus was awash in theories about what the college’s board of trustees was hiding, about who knew what when, about what the school’s finances really were. Alumni took to Facebook. Students occupied the president’s office. Faculty exhausted themselves talking to media, brainstorming solutions, teaching classes, consoling students – and fretting about their jobs.