How a college closing disaster led to new student protections in Mass.
When Mount Ida College in Newton closed in 2018, it was abrupt. Students, faculty and staff weren't given a heads up and transfer agreements weren't created ahead of time.
The closure 'fell short of what is expected of a charitable board in meeting its obligations to an educational mission' and may have violated the state's consumer protection law," Assistant Attorney General Jonathan Green said at the time. Then-Attorney General Maura Healey decided against suing the college.
'The precipitous nature of that announcement was completely unacceptable. It wreaked havoc on students, faculty, staff and the community. The Board of Higher Education decided to dig into the issue and try to figure out what happened, why and how, if at all, could we try to help avoid something like this happening again in the future,' said Constantia Papanikolaou, the Department of Higher Education's Chief Legal Counsel.
A year later, the state created a working group and, based on their recommendations, passed legislation called Financial Assessment and Risk Monitoring and new regulations requiring the Board and Department of Higher Education to assess the financials of private institutions annually and identify and monitor those institutions that are at risk of closure and minimize disruption.
The law isn't intended to keep colleges open or to prevent them from closing, said Papanikolaou.
Instead, the law aids in a slower and less volatile process than what Mount Ida community members experienced.
Read more: Could shuttered college campuses help solve the Mass. housing crisis?
The law is more integral now than ever, as over two dozen colleges and universities have closed in Massachusetts over the past decade due to financial and enrollment difficulties.
Recently, Eastern Nazarene College, a private liberal arts college in Quincy, announced in June 2024 that it would close due to financial issues. Bard College at Simon's Rock said in November it would close its campus due to declining enrollment.
While any college closure is disruptive, Becker College closed down differently from Mount Ida.
When Becker wound down its college in 2021, a closure plan had already been put in place: students would know where they could seamlessly transfer to, the community was notified in advance and a neighboring university would maintain its records.
This was due to the newly established law in Massachusetts, which took effect the previous year.
As part of the law, the Department of Higher Education conducts annual financial screenings and assessments of all institutions in Massachusetts that are authorized to grant degrees.
If colleges or universities can't demonstrate that they have at least 18 months' worth of resources to substantially meet the needs of enrolled and admitted students, the institutions join a public notifications list on the state's website.
While Becker College didn't warrant being put on the public notifications list, as it had enough finances to continue for 18 months, it was still part of the state's list of institutions it was monitoring.
The state doesn't release this list in an effort to build trust and allow the institutions to rebound without scrutiny in the public eye.
All institutions that the state adds to its public notification list or decides to monitor are required to create a contingency plan in the event of closure.
Boston Baptist College and Northpoint Bible College were on the public watchlist last year.
Once institutions prove they can meet financial viability, they are taken off the list, according to the Department of Higher Education.
Papanikolaou said she thinks contingency plans are helpful for institutions experiencing financial challenges to have a 'safety net.'
'I think the success of the law is really more silent and in the background, and it's these contingency closure plans that are in place, that are kind of on the shelf and at the ready if needed and as needed,' said Papanikolaou, from the Department of Higher Education.
While institutions can be added to the public notifications list at any time of year, the process of financial assessments begins during the spring or summer and the watchlist is added to between the months of November to February.
Institutions are required by the Department of Higher Education to disclose any known financial risks that could lead the institution to imminent closure outside of the typical assessment months.
Known financial risks can include anticipated problems related to liquidity or cash deficiencies, any decision to close a branch campus or an additional instructional location and initiating merger discussions with another institution.
Colleges and universities are also supposed to post their audited financial statements on their website per the law and have their trustees trained once every four years on financial metrics, accreditation standards and legal and fiduciary responsibilities, according to the Department of Higher Education.
Read more: Two Mass. colleges in financial 'danger,' accreditation agency finds
On top of the state's public notifications appearing on its website, accreditation notifications are also posted.
Most recently, Anna Maria College in Paxton and Montserrat College of Art in Beverly were posted and both 'in danger' of not meeting institutional resources, according to letters sent in recent months from the accreditation agency, the New England Commission of Higher Education.
Both institutions aren't on the state's public watchlist due to different standards for publication between the accreditation agency and the state.
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