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BBJ reports Regis demonstrates strength and stability

September 9, 2013

Struggling Mass. colleges improve their fiscal health

By Mary Moore
Reporter, Boston Business Journal

A handful of private nonprofit colleges in Massachusetts showed strong improvement in 2011 after hitting the bottom of a watch list of schools with shaky financials in 2010.

College officials attributed the uptick to a range of factors such as the strengthening economy, improved investment returns and higher enrollments.

The U.S. Department of Education compiles scores on colleges that range from a high of 3 to a low of -1. Using these ratios, the agency ranks schools into three tiers — not financially responsible, financially responsible but needing additional oversight, and financially responsible. Such a ranking can influence whether schools can continue receiving federal student financial aid.

While the newest scores date back to the 2010-2011 school year, they are a good indication of how deeply some colleges were struggling right after the recession — and how some appear to have turned a corner.

Regis College, Gordon College and Mount Ida College, in particular, made dramatic jumps between their 2010 and 2011 fiscal years. Mount Ida went from being considered not financially responsible to financial responsibility, and both Gordon and Regis moved from needing oversight to financial responsibility.

“There have been a lot of strategic initiatives we’ve been putting in place, from cost-cutting to expense control to revenue growth and initiatives,” said Thomas Pistorino, vice president of finance and business for Weston’s Regis College, which receives about $22 million a year in federal financial aid for students.

Although the DOE has not yet released the scores for the 2012 or 2013 fiscal years, Pistorino said Regis’ score will continue upward. A big part of Regis’ financial turnaround, he said, is the co-ed status of the school since 2007, which has driven up enrollment.

The college had 75 more undergraduate students enroll in the year it went co-ed — jumping to 724 in 2007 from 657 the previous year, Pistorino said. Today, Regis’ total undergraduate enrollment is about 950 students. “Several years ago, we rented out dorm rooms ... to fill them,” Pistorino said. “Now we’re renting out space at the Crowne Plaza hotel (in Natick) because we’ve overbooked our dorms.”

Regis College also increased the number of graduate degree programs it offers and graduate student enrollment has more than doubled in 10 years, he said.

Gordon College, for its part, has seen its Department of Education financial responsibility score increase because enrollment is up, its endowment has been boosted by better investment performance, and the Weston school has renegotiated a lower interest rate on $39 million in debt, said Michael Ahearn, Gordon’s vice president for finance and administration.

The college’s endowment is $36 million today, up from $24 million at the height of the recession, Ahearn said. The college built a series of dorms between 1998 and 2002, he said, and has been carrying substantial debt since then.

While there were marked improvements between fiscal years 2010 and 2011 for a handful of schools, a number of nonprofit institutions of higher education struggled. Hebrew College, Montserrat College of Art, Pine Manor College and Urban College of Boston were among the nonprofit institutions the DOE considered not financially responsible. Hebrew College scored lowest among the Massachusetts schools in the 2011 fiscal year, as it had the year before. Schools that are deemed financially not responsible may continue to receive federal financial aid on a provisional basis, but may be required to post a letter of credit and undergo cash monitoring.

Stephen Immerman, Montserrat’s president, pins the Beverly college’s financial issues on an enrollment of fewer than 400 students. The college, which receives about $4 million in federal student financial aid, nearly closed during 2006 and 2008, said Immerman, who joined the school in 2009. Since that time, the school has built a new dorm, installed new IT systems and opened a new career services center. The investment seems to be paying off: Freshman enrollment has jumped to 121 this fall from about 60 freshmen in 2006.

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