Connecticut’s move to consolidate community colleges risky, say critics - Debtwire

Connecticut’s move to consolidate community colleges risky, say critics

18 March 2019 - 12:00 am

Amid financial challenges, the plan by Connecticut State Colleges and Universities (CSCU) to consolidate the state’s 12 community colleges is a risky move, said Matthew Warshauer, professor of history at Central Connecticut State University and a vocal opponent of the consolidation plan.


The structural change would consolidate the 12 individually accredited campuses to one singly accredited college with 12 campuses and a consolidated administrative organization, but the accrediting body, the New England Commission of Higher Education (NECHE) has already voiced skepticism toward the plan, citing the magnitude of the proposed changes, the accelerated timeline and a lack of resources for implementation.


The system is experiencing financial difficulties, with an estimated USD 18.7m deficit projected in FY20 without any structural changes, according to a proposal submitted by the school to its accreditors. Without a structural change, the schools would drain their reserves in FY21, projecting a negative reserve balance of USD 20.7m.


By implementing the proposal, called “Students First,” CSCU projects an estimated annual savings of USD 24.8m by FY22.


The system’s fiscal year begins 1 July.


Part of the problem for CSCU stems from the state’s own financial difficulties, Warshauer said. Connecticut has reduced state funding by 15.5% since FY16, and Governor Ned Lamont’s (D) budget proposal leaves higher education funding flat. The reductions in state funding, combined with increasing expenses on campus, has created financial strain for the system.


Because of the accreditation changes, the plan is a risk, Warshauer said. Each campus is currently accredited individually, and accreditation requirements expect a certain level of administrative staff at each campus – by centralizing the administration, NECHE could determine that one or more campuses are not properly staffed, he said.


“(NECHE could say) we don’t see that you have the proper institutional infrastructure to manage a single college,” Warshauer said. “So what he’s decided to do is start building that infrastructure now, then apply for another ‘substantive change’ in 2023, and that’s what I call rolling the dice.”


Without accreditation, students would not be eligible for federal loans, therefore compromising the ability of students to attend college, said Warshauer.


The system already began a pilot program to test the changes, deciding not to replace the president at two campuses when each individual retired, instead asking two sitting presidents to serve on an interim basis as president of two campuses, said Mark Ojakian, president of the Connecticut State System.


The centralized office would have a president, provost and CFO, with three regional presidents overseeing four campuses each, and each individual campus would have a vice president.


“We need to go down this path,” Ojakian said. “We can tinker at the edges and share some of the resources, but only through a consolidated effort we get the most cost savings out of this.”


CSCU needs to make changes to remain solvent, Ojakian said. Consolidation will improve student success and access, allowing them to take courses across multiple campuses and face an easier transition to four-year schools, he said. Further, the “Students First” plan will allow each of the 12 campuses to remain open and operational.


“Our accrediting body has noted 10/12 colleges that are in serious financial challenges, and they’re concerned about the solvency of the institutions over the next five years,” Ojakian said. “They’re worried about the level of student services that ensure student success, they’ve been on the record with each institution.”


Despite NECHE’s earlier concerns, CSCU is moving forward with the plan, and expects to have it fully implemented by 2023, Ojakian said. He said the plan is not a gamble, the system is working with NECHE to help ensure accreditation will not be an issue, and they must demonstrate to the accreditor that it is able to operate as one institution.


“We are in the process of starting to move in one direction and look and act like one college; they indicated in their response to us that the timeline is too aggressive and you need to be in a position to look like a consolidated institution before we have a conversation about accreditation,” Ojakian said. “I don’t believe it’s a gamble. We received some very good advice on how to move forward and based on the response from the last submissions, it’s a gamble if we don’t do this. My focus is on getting this where accreditors are comfortable to give us approval; we continue to work with them, and will give a status report this spring.”


Connecticut is rated A1/stable by Moody’s Investors Service, A/stable by S&P Global Ratings and A+/stable by Fitch Ratings.

A USD 20m tranche of 5% Series 2018E Connecticut general obligation bonds due 2030 last traded in round lots at 116.503 to yield 2.989% on 18 March.

by Maria Amante