Home Accountability The Possible Future for Small, Tuition-Dependent Colleges
The Possible Future for Small, Tuition-Dependent Colleges

The Possible Future for Small, Tuition-Dependent Colleges


Last month, I wrote about a new book, The College Stress Test, authored by my former professor and dissertation chair Dr. Robert Zemsky, Susan Shaman, and Susan Campbell Baldridge. Using data from the Department of Education institutional reports, the authors constructed a stress test that indicated only 10% of educational institutions face substantial market risk but that another 30% will struggle until they find a way to reduce student costs, change curriculum, and experiment with new modes of instruction.

In today’s online issue of The Chronicle of Higher Education, David Wescott interviews Professor Zemsky and asks whether his outlook has changed based on the coronavirus pandemic outlook (note: the article is currently only accessible to subscribers). Dr. Zemsky responds by stating that everything is up in the air.

The admissions process has been disrupted. Accepted applicants are not going to be invited to campus for an event that will sell them on attending. Colleges will not know what to do with their wait list. The normal process is nonexistent and confusion abounds.

Professor Zemsky goes on to say that his research indicated that 10% of colleges and universities were in real trouble before, but that the scale will slide a bit due to the pandemic. Institutions need to monitor their cash flow and in the short term, it’s likely that 20% are in real trouble now. If the crisis continues through the fall, the bottom 20% may never come back.

Mr. Wescott refers to the recent downgrade of the college sector by Moody’s and asks Dr. Zemsky if there are other cues that he is looking for. Dr. Zemsky replied that the key flag will be whether or not campuses are able to reopen for September, how many freshmen show up, and how many upper-class students return.

Based on his research, college completions are not the signal to financial stress but freshman to sophomore retention is crucial. If freshmen are leaving college early, that is a red flag.

Asked about advice he would provide to college presidents, Professor Zemsky replies that:

  • Presidents will need to develop strategies for frank talk that doesn’t cause panic.
  • Ask yourself if this is the moment to rationalize the budget and institutions with a lot of adjunct faculty can do that more easily.
  • This might be the moment to talk about a three-year, 90-credit college degree.

Lastly, when Dr. Zemsky was asked if he thought this was a dislodging event that could change most institutions of higher education simultaneously, Dr. Zemsky said, “The deeper the panic, the less likely that this will be a dislodging event. Institutions in panic make dumb decisions. If it’s just 15 days, it isn’t going to do much dislodging.”

I’ve been privileged to have known Bob Zemsky for many years and was his doctoral student at Penn. His observations about the higher ed sector are usually fairly astute.

All of us will likely watch to see how much money Congress and the states provide to coronavirus-impacted colleges and universities. It remains to be seen whether or not those funds stabilize the situation; if this pandemic continues, up to 20% of at-risk institutions might close their doors in the next year or two.



Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, and as a member of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.


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