Come Together

By by John O. Harney with James Martin and James E. Samels

A NEJHE interview on the future of consolidating colleges and merging universities …

NEBHE has been deeply interested in how New England higher education institutions can collaborate with one another and with other leaders to confront threats to their economic sustainability. These threats stem partly from shifts in academic content and delivery, student demography and institutional finances—all set against the background of both rising expectations and eroding public perceptions of higher education. Through its Higher Education Innovation Challenge, NEBHE engaged institutional leaders in addressing head-on the critical issues of cost and economic sustainability, while developing analytical tools and convenings to help campuses survive and thrive.

Notably, NEBHE President and CEO Michael K. Thomas’s monograph “Between Collaboration and Merger: Expanding Alliance Strategies in Higher Education,” explains how higher education leaders can apply lessons from strategic alliances in other industries to enhance college and university’s financial sustainability and competitive positioning—responding to the public demand to educate more students at lower cost without sacrificing quality. Thomas explores models of strategic alliances that find a “sweet spot” between common higher education consortia and full institutional mergers.

Here, James Martin and James E. Samels, explain their latest book Consolidating Colleges and Merging Universities: New Strategies for Higher Education Leaders, published by Johns Hopkins University Press earlier this year. In the following Q&A with NEJHE Executive Editor John O. Harney, the authors share their findings and explore some of the key reasons that more New England colleges and universities are now considering partnerships, co-ventures, and even mergers as strategic options …

Harney: Why do you believe now is the right time for this book?

Martin and Samels: Simply said, it is increasingly difficult to ignore the many news flashes, press releases and higher ed conversations focused on institutional partnerships, mergers and closures. Here in New England with some of our states offering, per-capita, the largest number of colleges and universities in the nation, there are too many colleges for too few students. We believe that this region will continue to see a rising number of schools beginning to work formally toward partnerships that leverage their resources and combine their curricula, personnel and infrastructure. Some institutions will enter into strategic alliances, and some will move straight to considerations of merger. Others will decide to close.

Harney: Even with, as you say “too many” higher education institutions in New England, many students still appear not to find access or success in higher education. Do you see a way to address this conundrum?

Martin and Samels: Yes, our book looked at this issue, and while Consolidating Colleges and Merging Universities focuses principally on the leadership decisions involved in developing and sustaining new and familiar models of partnership and merger, we also explored a number of the reasons driving, even forcing, some schools to collaborate. The impact of collaborations on current and future students was also considered, as well as how faculty and administrative leaders can support student needs more effectively.

One recommendation would be to develop Early College programs that more effectively align students’ career interests and aptitude levels with available curricula. Strategic programming in this area can help undergraduates avoid becoming lost during the critical first-year experience.

Another suggestion would be to emphasize the value of vocational career opportunities. Massachusetts Secretary of Education James Peyser, for example, has spoken persuasively about the value of vocational-technical, and agricultural, programs, and he is candid about the need for higher education to find new ways to support vocational career paths.

Harney: New England is also shifting in terms of its demography. The region is aging, and it’s welcoming populations that have been underserved by higher ed historically? How could higher education partnerships, strategic alliances or even mergers effectively engage these groups that have not participated fully in higher ed?

Martin and Samels: As a start, public and private colleges could jointly dedicate more time and resources to defining their audiences and developing new programs, degree and otherwise, to address their needs.

As one example, New England is currently experiencing a surge in the growth of Latino students, and this trend is not likely to reverse itself anytime soon. In response, public, private and even for-profit institutions could formally partner, where requested or needed, with clusters of community colleges to create collaborative programs that form bridges to facilitate academic achievement.

Harney: Another key market is adult students … what do you think of Purdue’s acquisition of Kaplan with its generally older student body?

Martin and Samels: No matter what concerns one may have about this concept, we believe that it will occur in other regions, including our own, with greater frequency. Clearly, there are numerous issues that will need to be addressed, but management agreements of multiple types will begin to emerge as, for one example, a for-profit partner might allocate expanded resources to enrollment and marketing while a traditional public or independent partner could provide a larger share of the curricula and teaching faculty.

As noted, there are complexities to work through, but entrepreneurial institutions will work through them if broader goals of mission enhancement, market share and sustainability can be achieved.

Harney: We are hearing more about regional “clusters” of colleges and universities that cross state lines. What is your view of the feasibility of partnerships involving institutions in two or even three different states?

Martin and Samels: It appears that state lines may not be meaningful in terms of partnership and merger planning going forward. Rather, colleges and universities that share a will to innovate, a complementary—rather than simply similar—structure, and compatible student market-shares, no matter where they reside, will have the best chances to prosper. We believe that groups of institutions across the region, perhaps without realizing they are motioning closer together, are going to identify specific areas in which to partner and share resources over the coming 24 to 36 months.

Harney: What is the future for partnerships of any kind between public and private colleges and universities … and even for-profits in the case of Kaplan? How might they work and why?

Martin and Samels: In the book, we write about institutional asset transfers that can serve as “mergers without merging,” so to speak. These can readily cross traditional public-private lines if planners are committed to shared goals. Colleges and universities that, at least initially, view full merger as out of the question may still develop agreements to share marketing resources, faculty teaching expertise, and classroom and library facilities, as examples.

The recent history of Daniel Webster College in New Hampshire is in some ways reflective of the drive to partner and create larger, stronger institutions. In the span of just a few years, Daniel Webster went from being a freestanding private college to part of the ITT Educational Services Inc. for-profit enterprise and now to part of Southern New Hampshire University (SNHU) via a “Teach-Out and Program Articulation Agreement.” Under this agreement, as of the end of the 2016-17 academic year, “SNHU will accept all Daniel Webster students who meet the minimum admission requirements for all subsequent coursework offered through SNHU,” as outlined on the SNHU website.

Harney: As you know, we have reported on institutional closings over the years, in part through our Higher Education Innovation Challenge. Which kinds of New England colleges are most vulnerable? How can they avert closing?

Martin and Samels: New England colleges and universities most vulnerable to closure typically:

  • Are small—with 2,500 students or fewer
  • Are more than 85% tuition-dependent
  • Have aging campus infrastructure with continuing signs of deferred maintenance
  • Have rising student default rates
  • Show excessive family tuition debt burden
  • Have spiraling tuition discount rate
  • Are religiously affiliated.

We would also add that not all institutions in the region with one or several of these signifiers is headed toward closure. Rather, institutional leaders now studying this list and acknowledging that it describes their college or university, perhaps accurately, can undertake numerous plans for success. Our research suggests that one of the most effective is to develop a strategic alliance and co-venturing plan with a willing partner institution. As someone recently described it, “Pick a dance partner before the music ends …”

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