Burlington College's announcement this past week that it will be closing led to a flurry of news articles and blog posts that we have not seen since Sweet Briar College announced they would close back in March, 2015. In the case of Sweet Briar, there was sharp disagreement between the former president and trustees who voted to close and the alumnae and friends who were shocked and ultimately victorious in their efforts save the institution.
In contrast, there is apparent agreement among pundits commenting on Burlington's situation. Everyone agrees that the college faced serious financial difficulty due to the accumulation of debt used in 2010 to purchase the lakefront property that served as Burlington's campus in recent years.
I was interested in seeing if a quick calculation using a few publicly available numbers would show a change in Burlington's financial situation and prospects after 2010. In short, Burlington College presents another opportunity to explore changes in the institution's financial situation using a model publicized on The Sustainable University website.
The chart and table were constructed using data pulled from the Integrated Postsecondary Education Data System (IPEDS). FY2015 financial figures for Burlington College were not available.
Following calculation of ratios, two stars are placed on the chart. The one in cell C1 in the lower left hand corner reflects changes in Burlington's expense and equity ratios for the five year period from FY2004 through FY2008. Burlington College may've been small during this period, but it was operating in a fiscally responsible way with institutional revenues covering expenses and a manageable level of debt.
The star in cell A3 in the upper right hand corner represents a very different picture with changes in expense and equity ratios for the period from FY2010 through FY2014 pointing to an unsustainable situation.
It is interesting to see the changes in enrollment and the corresponding changes in expenses and revenues. You can also clearly see the impact of the property purchase on total assets with a corresponding increase in debt levels.
Thanks for reading and I am looking forward to your feedback and suggestions!