Some small, private colleges struggling to survive

[lifesavacation]

I have 2 at a small liberal arts college. The college has about 4K students and the cost of attendance is 60k/year. The college has an endowment of about 140 million. Not sure if that’s a decent amount or not. My kids were fortunate to have received scholarships and they’ll graduate without any loans. I honestly don’t know how anyone can afford a 240k undergrad education. And with other more affordable options, I don’t know why anyone would choose to pay this kind of money. That’s almost 500k for both of my kids over the course of 4 years.

 

[mummabear]

The folks not moving out sure has been my experience. But here in California, the other issue has to do with property taxes. They are 1% of what you paid for your house, with a 2% hike allowed each year. If you buy a smaller replacement house, it likely will cost a lot more than what you paid for your house 30 years ago. My mom was in her house 53 years. Her property taxes were $995 a year. If she bought a $200,000 condo, her property taxes would double to $2,000 a year, and likely would also require an HOA fee of $200-$300 a month. It was cheaper for her to live in a 1772 square foot house, even with upkeep, that to downsize.

Wow here it is based on the current value, the council reissues your value every 3 years.

 

[bcla]

Wow here it is based on the current value, the council reissues your value every 3 years.

California has a little something called Proposition 13 from 1978. That's basically what set the tax rates in perpetuity without an actual reassessment. The value is also strictly based on the sale price.

https://en.wikipedia.org/wiki/California_Proposition_13_(1978)

When we bought our house we only had to pay the property taxes that the previous owner would have have paid. Then we received a supplemental tax bill to make up the difference. With the previous owner the "ad valorem" (value based) taxes were actually less than the special assessments (school bonds, public safety, parks, etc), which were mostly flat rate per parcel. The supplemental bills were maybe 4 times as much.

This creates issues where people just don't want to move if they can help it. It also creates an incentive to not perform a major remodel. If it would require a building permit, there's a requirement that the value of any improvements must be added to assessed value for property tax purposes. The entire assessed value doesn't up to market rate, but if it's a house that's been owned for a while, the assessed value could rise a lot. For instance, I looked up the assessed value of a neighbor's house. It was literally about $16,000 as it was purchased decades ago while the neighborhood was affordable. A kitchen remodel could easily be valued at $125,000.

 

[mummabear]

California has a little something called Proposition 13 from 1978. That's basically what set the tax rates in perpetuity without an actual reassessment. The value is also strictly based on the sale price.

https://en.wikipedia.org/wiki/California_Proposition_13_(1978)

When we bought our house we only had to pay the property taxes that the previous owner would have have paid. Then we received a supplemental tax bill to make up the difference. With the previous owner the "ad valorem" (value based) taxes were actually less than the special assessments (school bonds, public safety, parks, etc), which were mostly flat rate per parcel. The supplemental bills were maybe 4 times as much.

This creates issues where people just don't want to move if they can help it. It also creates an incentive to not perform a major remodel. If it would require a building permit, there's a requirement that the value of any improvements must be added to assessed value for property tax purposes. The entire assessed value doesn't up to market rate, but if it's a house that's been owned for a while, the assessed value could rise a lot. For instance, I looked up the assessed value of a neighbor's house. It was literally about $16,000 as it was purchased decades ago while the neighborhood was affordable. A kitchen remodel could easily be valued at $125,000.

I guess there are pros and cons to each way.
We have issues here where people who bought in areas that then became very expensive over the years are forced to move because they can no longer afford the rates bill. I guess remodels also would add value and thus add to the bill.
But I can see how people would end up locked in if the rates bill was only based on the sale price.

 

[Pea-n-Me]

Maybe there are too many colleges and some should close. It does seem sad, but if there aren't enough students to fill their ranks and they can't afford to operate, then it seems like maybe it would be better to streamline choices.

It also seems like many of them are sitting on an awful lot of money, yet they expect many students to foot the whole bill themselves, some even going in to crippling debt to do so. It just seems stupid in today's world.

Students need to protect themselves and their futures, first.

 

[DisneyOma]

Going to an expensive, small private school without much of a reputation is not a great financial decision for most people. Therefore, I am not surprised by this. College is too expensive anyway.

If you plan well, get scholarships (by doing exceptionally well in high school) and do some research on colleges, it's not expensive at all. I think we paid $10,000 a year for daughter to go to MIT. Paid a bit more for younger daughter to go to a smaller, less prestigious school, but we planned well and it was doable.

No kidding, can't read an article without having to pay. UGH

I could - just close the popup box and scroll down.

College is an institution that needs to be totally revamped. The first 2 years of college is a waste of everyone's time and money. The old saying that a college student needs a well rounded education of math, science and social classes, and a phy Ed. Class, that is what high school was for. Colleges need to eliminate these waste of classes and get these students into their classes to earn their degrees. What was a standard 50-100 years ago, needs to go.

I disagree. I switched majors because of my classes first year (loved that Bio class so much!) and took some other odd ones that made me think. (Recreational Geography, anyone? Hey, I can talk about open space, buffer zones, green space ratios with the best of them!)

Looking at the list, I only recognize one college on that entire list.

My mother went to a college that is now defunct. It was a small college and it just happens.

I recognized 5 on the list, and I live in the region, work at our local high school, etc. Not surprised the Bible colleges are having issues in the region. I'm surprised Wheelock isn't on the list - they just closed last year?

 

[Pea-n-Me]

If you plan well, get scholarships (by doing exceptionally well in high school) and do some research on colleges, it's not expensive at all. I think we paid $10,000 a year for daughter to go to MIT. Paid a bit more for younger daughter to go to a smaller, less prestigious school, but we planned well and it was doable.



I could - just close the popup box and scroll down.



I disagree. I switched majors because of my classes first year (loved that Bio class so much!) and took some other odd ones that made me think. (Recreational Geography, anyone? Hey, I can talk about open space, buffer zones, green space ratios with the best of them!)



I recognized 5 on the list, and I live in the region, work at our local high school, etc. Not surprised the Bible colleges are having issues in the region. I'm surprised Wheelock isn't on the list - they just closed last year?

Wheelock just merged with Boston University. They share the same geography, so it will benefit both.

 

[QueenIsabella]

Wheelock just merged with Boston University. They share the same geography, so it will benefit both.

Depends on your perspective. The students on the BU side of things are concerned their School of Education will be "dumbed down" to accommodate the Wheelock education students, since Wheelock's admissions requirements were much lower. Signed, Mother of a BU-SED student.

P.S. I don't know that this will actually come to pass, just that I've heard the crabbing from DD22.

 

[Pea-n-Me]

Depends on your perspective. The students on the BU side of things are concerned their School of Education will be "dumbed down" to accommodate the Wheelock education students, since Wheelock's admissions requirements were much lower. Signed, Mother of a BU-SED student.

P.S. I don't know that this will actually come to pass, just that I've heard the crabbing from DD22.

I can see that there will be some thinking like that! I was actually talking to DD yesterday about something similar. We were talking about UMass Amherst, and I was saying how one benefit of going there is that students can take classes at some of the other colleges in the area (Amherst, Hampshire, Mount Holyoke, and Smith Colleges) and I wondered how that experience would actually be; whether there would be some when the UMass kids shlep in, lol.

 

[tvguy]

Wow here it is based on the current value, the council reissues your value every 3 years.

We had a property tax revolt here in California in 1978, voters passed the 1% of purchase price cap on property taxes. Proposition 13 was the name of the ballot measure.....AKA Jarvis-Gann, the two men behind it.
At the time the driving force was long time homeowners whose property taxes per year were more than they had paid for the house. All were senior citizens, with the role model being the 85 year old widow whose property taxes were $4,000 a year on a house she and her husband paid $2,500 for 40 years before.

 

[lsyorke]

I also think tuition has exceeded the value of the education at many Colleges.

That's the story in a nutshell! People are no longer willing to sign on for massive debt and not have the job at the end to support that debt. It was only a matter of time before this happened.

 

[mnrose]

The folks not moving out sure has been my experience. But here in California, the other issue has to do with property taxes. They are 1% of what you paid for your house, with a 2% hike allowed each year. If you buy a smaller replacement house, it likely will cost a lot more than what you paid for your house 30 years ago. My mom was in her house 53 years. Her property taxes were $995 a year. If she bought a $200,000 condo, her property taxes would double to $2,000 a year, and likely would also require an HOA fee of $200-$300 a month. It was cheaper for her to live in a 1772 square foot house, even with upkeep, that to downsize.

Actually, that's not quite true. A person age 55 or older CAN transfer the property tax rate of their former residence to one of equal or less value than the one they sell in the same county, or certain other counties in California willing to accept the transfer. These are Prop 60 and Prop 90. So your mother COULD have transferred her 955 property tax to a condo that was priced equal to or less than the one she sold.

 

[klacey1]

Depends on your perspective. The students on the BU side of things are concerned their School of Education will be "dumbed down" to accommodate the Wheelock education students, since Wheelock's admissions requirements were much lower. Signed, Mother of a BU-SED student.

P.S. I don't know that this will actually come to pass, just that I've heard the crabbing from DD22.

Overall, Wheelock is less academically rigorous than BU, but Wheelock's education program is MUCH stronger/higher ranked than BU's. It's why BU "bought" Wheelock. So the education program will not at all be dumbed down--quite the opposite.

 

[tvguy]

Actually, that's not quite true. A person age 55 or older CAN transfer the property tax rate of their former residence to one of equal or less value than the one they sell in the same county, or certain other counties in California willing to accept the transfer. These are Prop 60 and Prop 90. So your mother COULD have transferred her 955 property tax to a condo that was priced equal to or less than the one she sold.

You have to buy a replacement home of equal or greater value to the home you sold, so no, that was not an option.

 

[mnrose]

You have to buy a replacement home of equal or greater value to the home you sold, so no, that was not an option.

Wrong. Equal or LESSER. You get to transfer your current "assessed value" to the new home so long as the "new" home is of equal or LESSER actual value than the one you are selling. For example, lets say you bought a house in 1979 for $35,000. With the 2% increases over the years, it has a current assessed value of $50,000, and you pay about $650 in property taxes on it (note, I'm making this up....I could have done the 2% per year and figured it out, but I'm lazy). Now, it's worth $500,000 (10x the assessed value). So long as you purchase a replacement property for equal to or less than $500,000 (for example, you find a condo for $350,000), you get to transfer your current assessed value of $50,000 to the new condo, despite it's current price.

There have been attempts over the years to make it a "new" home of ANY value (equal, lesser or greater), but the greater always fails. The logic is pretty clear to the county in the home you are selling. If your mother (or any older person) is paying $X today in property taxes, they will be paying $X tomorrow in property taxes too. It's neutral as to the county. And, it frees up the older person to sell a home which may be too large and require too much maintenance for them to handle.

Your mother would have been the perfect candidate for this transfer.

 

[Colleen27]

The folks not moving out sure has been my experience. But here in California, the other issue has to do with property taxes. They are 1% of what you paid for your house, with a 2% hike allowed each year. If you buy a smaller replacement house, it likely will cost a lot more than what you paid for your house 30 years ago. My mom was in her house 53 years. Her property taxes were $995 a year. If she bought a $200,000 condo, her property taxes would double to $2,000 a year, and likely would also require an HOA fee of $200-$300 a month. It was cheaper for her to live in a 1772 square foot house, even with upkeep, that to downsize.

We have something similar here and it has a similar effect. Homes are still reassessed yearly, but the change in property taxes is capped at the rate of inflation. A sale triggers a "reset" to taxing at the current market value. So for people like my mom, who has been her home for decades, or people like DH & I, who bought at an extreme low point in the market, "downsizing" can potentially come with a big jump in property taxes. And that does make some people think twice about selling the family home in favor of something smaller.

 

[bcla]

I guess there are pros and cons to each way.
We have issues here where people who bought in areas that then became very expensive over the years are forced to move because they can no longer afford the rates bill. I guess remodels also would add value and thus add to the bill.
But I can see how people would end up locked in if the rates bill was only based on the sale price.

Strangely enough it increases housing prices. In part it's because owners know that they'll be locked in to the tax rate, but also because there may not be as much availability of houses for sale.

 

[RedAngie]

I can see that there will be some thinking like that! I was actually talking to DD yesterday about something similar. We were talking about UMass Amherst, and I was saying how one benefit of going there is that students can take classes at some of the other colleges in the area (Amherst, Hampshire, Mount Holyoke, and Smith Colleges) and I wondered how that experience would actually be; whether there would be some when the UMass kids shlep in, lol.

Interesting recent article concerning Mount Holyoke, an all-female college. Professors are being cautioned not to use the term "woman" when referring to or addressing the students, since it may be a micro-aggression toward those who don't identify as women.

http://www.miamiherald.com/article206827519.html

 

[QueenIsabella]

Overall, Wheelock is less academically rigorous than BU, but Wheelock's education program is MUCH stronger/higher ranked than BU's. It's why BU "bought" Wheelock. So the education program will not at all be dumbed down--quite the opposite.

Yeah, I doubt my DD would agree with this. Especially since Wheelock didn't even make her list of prospective colleges, and she was a highly competitive candidate. Of course, she's biased, and probably would have objected to any other school merging with BU-SED. And I freely admit, I know nothing about teaching colleges--I majored in engineering, 30 years ago, so DD was on her own in choosing colleges to apply to. I couldn't even get her to take calculus! (But it's FUN!)

In any event, I'm sure the Wheelock students will get well-absorbed into the BU students, and the world will continue to rotate on its axis.

 

[DisneyOma]

Wheelock just merged with Boston University. They share the same geography, so it will benefit both.

The way the students in the Colleges of the Fenway talk about it makes it sound like Wheelock fell apart and BU bought the buildings. There's no association with anything Wheelock about the closing, etc. So while the bigwigs say "merge" the students in the area say "Wheelock is gone".

That's the story in a nutshell! People are no longer willing to sign on for massive debt and not have the job at the end to support that debt. It was only a matter of time before this happened.

Well, if you don't have the skills to get a job after 4 years in college, you don't deserve a job. The entitlement of some students (brought on by their parents) is pretty amazing, IMO. They are expecting to get the big bucks right out of college - and so they say they 'can't get a job' when in reality they don't want to take an entry level or parallel job to get started. College is what you make of it.

Interesting recent article concerning Mount Holyoke, an all-female college. Professors are being cautioned not to use the term "woman" when referring to or addressing the students, since it may be a micro-aggression toward those who don't identify as women.

http://www.miamiherald.com/article206827519.html

Thanks for the chuckle - what a bunch of pompous *******s quoted in that article! They are so threatened by transgender, etc, they think people are being 'indoctrinated'. I work with students who are gay, trans, bi, you name it. We are not a this or that species. People need to get over their hangups and accept. You don't have to be gay, trans, bi, but some people are. Oh well. It's very easy to use the words "students", "people", "human beings" (this last one out of the mouth of a 6 year old trans kid who is a family friend.)