Higher education has been facing unprecedented challenges over the past few years. Many institutions have been confronting increased financial strain due to a combination of factors: declining enrollment, rising operational costs, and decreased state funding. While “name brand” institutions continue to thrive, smaller colleges and universities continue to struggle—with an average of one per week closing across the United States recently.

Closing a college requires careful planning and, ideally, a sense of dignity and responsibility towards all stakeholders. This concept of “closing with dignity” ensures that students, faculty, staff, alumni, and donors are treated with respect and transparency during the difficult transition of a college closure.

What Does “Closing with Dignity” Mean?

“Closing with dignity” treats shutting down an institution with careful consideration—a commitment to doing right by students, faculty, staff, alumni and donors. It’s a framework that aims to preserve the integrity of an institution’s mission, support students and staff during a difficult transition, and ensure that the college’s legacy continues to endure even after the doors are shut.

A Well-Planned Teach Out

One of the critical early components of closing with dignity is a well-planned teach out process. The goal here is to provide students with a clear path forward to complete their degrees through partnerships with other colleges.

A well-thought out teach out plan requires significant legal and operational expertise and planning capacity. This begins with a foundational map to understand how students can complete their degrees at partner schools, whether new courses and/or faculty are required at those schools, and what resources can be devoted to assisting those colleges to execute the proposed teach out plan. This map should also address recordkeeping: student transcripts, financial aid records, health records, and archives.

Accompanying the initial planning is interfacing with regulatory bodies. All accreditors, for example, require a closing institution to submit a provisional teach out plan which includes an agreement with the partner institution(s). Teach outs can also affect student financial aid. Institutions should plan to notify and negotiate with accreditors as well as state and federal authorities.

Before announcing a closure institutions should ask themselves whether they have enough time and cash flow runway to successfully plan and implement a teachout process to avoid leaving students stranded midway through their academic journey.

There are serious personal and professional risks for officers and directors if their school closing is not properly planned and executed. Colleges that close suddenly and, in the process, disadvantage students may open the board of trustees and officers to personal liability for student loans that are discharged, and officers can potentially be barred from any future employment in the higher education sector.

Additionally, if there isn’t sufficient cash flow to address potential WARN Act liability (should the number of employees terminated reach the relevant state or federal threshold), officers and directors can also be subject to personal liability.

Preserving the Legacy and Mission

Many institutions want to continue their missions even after their doors close. This can involve either transferring endowment funds to a teach out partner, or identifying another institution with a similar mission. This process, however, can be slow and complicated. State attorneys general must approve these kinds of transfers, which can take time and delay the disbursement of funds. However, with careful planning, endowment funds can continue to support students in line with the original intent of donors.

Beyond the endowment, schools should consider where they can find a home for memorabilia, records, and other historical artifacts to preserve the institution’s legacy, which is often so important to boards and alumni, who feel a deep connection to their schools.

Preserving a college’s history can provide a sense of continuity and closure, allowing alumni to continue to rally around the school’s legacy, even after its doors have closed.

Faculty and Staff Considerations

Closures affect not only students but also the faculty and staff who have dedicated their careers to the institution.

Closing with dignity involves working to find new positions for faculty and staff at other institutions, whenever possible. In some cases, like the partnership between the College of New Rochelle and Mercy College, for example, faculty members were identified and absorbed into the partner institution’s programs.

However, the reality is that not all faculty and staff will find new positions, especially if the receiving institution(s) is already well-staffed. Still, institutions should make every effort to support employees during the transition, whether by offering career counseling, severance packages, or assistance in finding new roles within the academic community.

Overcoming Board Resistance

One of the major impediments to a dignified closure is resistance from the institution’s board of trustees. For many board members, closing a college feels like a personal failure, a death of sorts, with their legacy tied to the fate of the institution. This emotional resistance can delay the closure process, sometimes until it is too late to plan properly.

However, it is essential to help boards see that there is light after the darkness. By planning for a dignified closure, institutions can ensure that their mission continues, their students are supported, and their legacy endures. It is a challenging process, but with enough time and careful planning, it is possible to navigate the closure in a way that respects all stakeholders involved.

“Closing with dignity” provides a thoughtful, structured approach to what is often an emotional and difficult decision. While the closure of a college marks the end of an institution’s ability to directly and actively educate students, it doesn’t have to mean the end of its mission. With proper planning, transparency, and a focus on supporting students, faculty, staff, and alumni, colleges can ensure that their legacy continues even after their doors close.

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