Dive Brief:
- Wells College, in New York, announced Monday that it will close at the end of the spring term.
- The private nonprofit institution said it has faced prolonged financial distress that it was unable to address through fundraising or other measures. Wells also cited demographic challenges, the pandemic, inflation and “an overall negative sentiment towards higher education.”
- In its notice, which came just days before the planned closure, Wells leaders said they had recently had “conversations with other academic partners,” to no avail.
Dive Insight:
Before deciding to shutter the college, Wells officials tried to identify new revenue streams, according to a FAQ on the institution’s website. But they were unable to find revenue sources that could raise the needed money quickly enough.
“Members of the board, many of whom are Wells graduates, have spent years trying to find creative solutions to raise revenues in hopes of avoiding closure, including most recently having conversations with other academic partners,” Wells Board Chair Marie Chapman Carroll and President Jonathan Gibralter said in a joint statement Monday. “But revenues, unfortunately, are not projected to be sufficient for Wells’ long-term financial stability.”
Without additional revenue, Wells would have had to raise $12 million annually — double its standard goal — for several years in order to stay afloat. And there was “no likelihood” the college could continually hit that target.
“Fundraising helps to support the College, but the board recognizes that it cannot carry the College,” the FAQ said.
Wells’ finances have oscillated dramatically in recent years, according to tax filings. In fiscal 2022, the college saw a revenue surplus of nearly $576,000. But its budget fell short by almost $3 million the year before. Similarly, the college had a surplus of about $2.5 million in fiscal 2020, but a deficit of roughly $2.7 million the year prior.
Wells has always been a smaller institution and has touted its small class sizes on its website. But small private colleges tend to heavily rely on tuition revenue, and enrollment challenges can threaten this financial model.
Enrollment has steadily declined at Wells, according to federal data. In fall 2022, the college had 357 students, down about 33% from 532 a decade prior.
Students on track to graduate this semester will still be able to do so, Wells said. Commencement is scheduled for May 18.
It is unclear how many students will be forced to find a new institution. The university did not immediately respond to a request for comment Monday.
Wells has established teach-out agreements with seven New York colleges and will hold a transfer fair for students Friday. Wells’ teach-out partners will keep students’ prices steady and honor their financial aid. One institution, Manhattanville University, will manage Wells’ transcripts and dedicate housing for its transfer students.
The college did not say when employment would end for faculty and staff, but added that direct supervisors and human resources would reach out to those employees. Wells said it would meet its payroll obligations.