Colleges Facing Closure Turn to M&A | Top 5 Articles | House Committee Approves Funding Cuts | Nebraska Eyes Property Tax Reform for K-12 Funding
We hope Whiteboard Notes readers had a restful and safe Fourth of July! It’s been a busy and energizing July on the ground, seeing so many friends and familiar faces at the Education Commission of the States’ National Forum on Education Policy, the National Governors Association’s 2024 Summer Meeting, and the Council of the Great City Schools’ Curriculum, Research, and Instructional Leadership Meeting. We look forward to sharing insights and reflections next week.
In this week’s edition of Notes:
M&A Becomes a Common Strategy for Colleges Facing Closure
Last week, Northwestern College —a small, for-profit school in Illinois—closed suddenly after 122 years. In a notice sent to students and staff on July 6, the College’s former president Lawrence Schumacher cited “severe financial problems” as the primary cause of the closure. [Higher Ed Dive; WGNTV]
Northwestern is not alone. According to an analysis by SHEEO (State Higher Education Executive Officers Association) , higher education institutions have folded at a rate of one per week in 2024, up from about two per month last year. [ The Hechinger Report ]
This can cause frustration and confusion for students, so much so that they stop pursuing higher ed entirely: students who experience a college closure while enrolled are 50% less likely to earn a credential than students who did not. In the case of Northwestern College, students have nowhere to transfer their credits or degree programs to, trapping them with student debt with no pathway to a degree. [ Inside Higher Ed ]
But for institutions facing mounting financial pressures, demographic shifts, and a looming enrollment cliff driven by the Better FAFSA rollout failure, what can be done to prevent closures—or at least shield students from the fallout?
Mergers and acquisitions (M&A) are being used as a lifeline by schools facing closure. These deals help keep campus doors open and the lights on, and prevent catastrophic academic and financial situations for students.
It’s not so easy, though: The financial climate and enrollment issues underlying the rise in higher ed M&A aren’t going to let up anytime soon. Adapting to offer shorter-term programs and community-oriented, career-connected curriculum may help attract students (and their dollars) back to campus.
Rules instituted by the U.S. Department of Education in August last year complicated higher ed M&A by giving itself more oversight over the process and increasing requirements. The process—which already takes time—can be untenable for colleges already under financial strain, making M&A efforts more prone to failure. [Inside Higher Ed]
Top 5 “What We’re Reading” Articles of the Week
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House Appropriations Committee Approves Significant Cuts to Education Funding
The House Appropriations Committee approved a $67.9 billion discretionary budget for the U.S. Department of Education for fiscal year 2025, marking an 11% overall cut from the previous year's spending. The bill includes a 25% reduction in Title I funding, totaling a $4.7 billion cut, which Democrats argue will result in 72,000 fewer teaching positions. [Politico Pro, subscription model]
Go deeper: House Republicans are pushing for significant reductions, including the elimination of 17 education programs such as English language learning, teacher training under Title II-A, and childcare on college campuses. These cuts, they argue, are necessary due to lagging test scores despite substantial federal pandemic aid. [K-12 Dive]
However, the bill isn't all cuts. It proposes increased funding for charter schools and early education programs like Head Start. It also maintains the maximum Pell grant award at $7,395.
Democratic pushback: Democrats on the panel proposed numerous amendments to address civil rights spending and low-income school funding, but all were rejected. Rep. Rosa DeLauro (D-Conn.) condemned the cuts as harmful to the nation’s most vulnerable students.
Controversial riders: The bill also includes measures to block the enforcement of Title IX regulations and Biden’s new income-driven repayment plan, known as SAVE. Additionally, it prohibits federal funds for schools that allow transgender students to participate in women’s and girls’ sports, sparking further controversy.
What's next: The bill is expected to reach the House floor by the end of July. Senate appropriators will start marking up their own spending bills this week, with the education bill expected later this month.
ICYMI: In our last edition, we provided preliminary coverage of the U.S. Supreme Court’s ruling on the Chevron deference. We are planning to expand this coverage in the coming weeks and would like to hear from you! If you have any questions about what the Chevron decision means to your organization, reach out to our team.
Nebraska Eyes Property Tax Reform for K-12 School Funding
Nebraska may become the first state in the country where K-12 schools aren’t funded by property taxes, as Gov. Jim Pillen (R) plans to call a special legislative session in late July focused on property tax reform. [Nebraska Examiner]
The big picture: Gov. Pillen and state lawmakers aim to introduce legislation that would remove the burden of K-12 public schools' operational costs from property taxpayers. These costs currently account for about half of a typical property tax bill in Nebraska. [KETV]
Driving the news: In recent weeks, Gov. Pillen has been canvassing the state to build support for a significant overhaul of property tax funding. However, he has yet to release a detailed written proposal. Key details remain uncertain, such as whether all property taxes will be eliminated or just those funding school operations, how increased sales taxes would compensate for the revenue loss, and the timeline for these changes
Zoom in: If the proposed changes move forward, Nebraska's model could follow the state’s recent shift in community college funding, where the state assumed greater financial responsibility while local property taxes were reduced.
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Why it matters: Eliminating property taxes for school funding could reduce financial disparities among school districts, which currently vary heavily based on local property values. The shift could also centralize funding decisions at the state level, potentially reducing local control over school budgets.
What’s next: Transitioning K-12 school funding away from property taxes would be a multiyear effort, likely involving numerous legislative sessions to refine and implement the new funding mechanisms. Nebraska’s special session is expected to begin on July 25.
Quick Takes
Confidence in Higher Education Continues to Decline
Confidence in higher education continues to decline across political affiliations. 32% of Americans now have little-to-no confidence in higher education, a marked increase from 10% in 2015. While the degree of confidence varies across Republicans, Independents, and Democrats, the trend is universally downward.
Yes, but: this lack of confidence is not translating to a decline in perceived value or, even more importantly, enrollments.
A separate Gallup survey, released two months ago, shows more than nine out of 10 Americans believe at least one post-secondary credential is valuable. Among Americans without a college degree—often cited in articles about “low confidence in higher education” though not included as a discrete cohort in this year’s confidence survey—59% have considered pursuing additional educational opportunities in the past 2 years, a 15% increase in interest since 2021.
The bottom line: “Confidence” in U.S. higher education is declining. And U.S. universities face several substantial threats to enrollment. This year’s “FAFSA fiasco” and demographic cliff among them. But it is not clear that lower confidence is driving enrollment decisions—yet.
ED Releases Guidance for Edtech Developers on AI
Earlier this week, the U.S. Department of Education’s Office of Educational Technology (OET) released new guidance for edtech developers to support the safe implementation of AI in schools. Developed in response to the Biden administration’s AI Bill of Rights, the guidance reinforces the Department’s commitment to encouraging the use of innovative tech in the classroom and offers non-regulatory, education-specific recommendations for vendors and educators.
Go deeper on how schools and districts are using AI:
Private School Choice Enrollment is Growing
Private school choice enrollment has surpassed 1 million students for the first time, doubling over the past five years, according to EdChoice. Despite this growth, only 2% of the eligible K-12 population participates. The uptick is driven by significant increases in states like Ohio, Arizona, Florida, and Indiana—largely attributable to more universal private school choice programs and the popularity of education savings accounts (ESAs). While 34 states considered private school choice bills this year, 16 were enacted, including in Alabama, Missouri, and Georgia. However, states like New Jersey and Texas have rejected such legislation. The debate over private school choice continues, with proponents advocating for expanded educational options and opponents concerned about public school funding and accountability.
People on the Move
Lifelong learning company Pearson appointed Dave Treat as the organization’s next Chief Technology Officer. Prior to Pearson, Treat served as Senior Managing Director at Accenture, among other leadership positions; Director at Deloitte, and Executive Director at UBS Investment Bank.
Ashley Mathis joined Wilson Language Training as its next Chief Growth Officer. Mathis previously served as CEO of SmartLab and as President and Chief Revenue Officer of Teaching Strategies.
Lance Evans now serves as Mississippi’s state superintendent. Evans previously served as a district superintendent and succeeded interim state superintendent Raymond Morgigno. [WJTV] Lila Shroff announced on X (the platform formerly known as Twitter) that she joined The Atlantic as an assistant editor on the science, technology, and health team.
The Governor’s Office of Maryland is hiring for various roles, including a Chief Innovation Officer, a Special Assistant of Innovation and Impact, and a Policy Advisor.
Upcoming Events and Convenings
How often should you really wash your sheets?
Whiteboard Advisors’ Libbey Castle recently spoke to TIME about her morning routine, which includes washing her sheets every single day.
Regardless of her schedule or the quality of her sleep, Castle ensures her sheets are freshly cleaned each day. Living in Washington, D.C., Castle has made this routine a hallmark of her day, often amusing her friends and colleagues. She finds comfort in knowing that fresh sheets await her, boosting her spirits.
Health experts agree that more frequent washing can prevent skin irritation, acne, and allergies caused by the buildup of dirt, germs, and allergens in bedding.
While Castle’s routine is more rigorous than most require, it highlights the importance of regular sheet washing for maintaining better health and hygiene.
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