Posted 3:14 am Tuesday, June 26, 2012
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Lon Morris College’s Corrective Steps Win Approval
By KELLY GOOCH
Staff Writer
Lon Morris College's response to its consistent financial struggles is a rare but good approach, one higher education group official said.
Lon Morris announced last week it will seek an alliance with another educational institution and is expected to eliminate its athletic programs as part of the college's efforts to remain viable and emerge from financial difficulties.
To survive, Lon Morris brought in reorganization professionals Bridgepoint Consulting and appointed Chief Restructuring Officer Dawn Ragan, who conducted an assessment of the school. The school is not holding summer sessions and has kept a small group of employees on campus during the reorganization process.
Carol McDonald, president of the nonprofit association Independent Colleges and Universities of Texas since 1982, said this is the first time she's seen Lon Morris' approach.
"Most of the time, the institution has already been over the cliff and they had ignored their problems or delayed acting on them or made really bad decisions to the point there is nothing to do," she said.
In her 30 years with the organization, which represents 40 private institutions accredited by the Southern Association of Colleges and Schools, including Lon Morris, two of the group's institutions have closed -- Bishop College, a historically black college that was in Dallas, and Ambassador College, a liberal arts college that was run in Big Sandy by the Worldwide Church of God.
She said Bishop College faced financial struggles, things were delayed, and it was too late by the time it faced what had to happen. It sold the campus to a trustee, and it is now the campus for Paul Quinn College, which had been in Waco.
With Ambassador College, there was a schism in their denomination, and the school and its faculty were on the losing side of the division, Ms. McDonald said.
Although she saw those two institutions close, she said she doesn't know of another Texas institution, besides Lon Morris, that has hired professionals to help evaluate its situation to determine what the next step is going to be.
"I'm intrigued with that as an option," she said. "Through the national higher education news, I have seen others try to do it on their own, (but) I think in these times there are people who may better be able to look at the situation objectively and take actions."
She said she sees Lon Morris' efforts as positive because it has reached out to get the best professional advice it can.
Lon Morris' situation "is rare given there's only been two cases in the last 30 years I know of...," Ms. McDonald said. "Usually it's too late to do anything, but I absolutely don't know if that's the case with Lon Morris."
She also noted that all kinds of institutions have financial challenges at one point or another, and the ways out of them are different based on circumstances.
Lon Morris has bled at least $4.4 million since the 2007-08 school year, with the past school year's possible losses yet to be tallied.
The financial problems led to delayed paychecks for employees, but most recently resulted in the furloughs of more than 100 employees and the resignation of President Dr. Miles McCall.
Ms. Ragan, Lon Morris' chief restructuring officer, confirmed last week the college's plans to enter into a transaction or agreement with another educational institution.
"Discussions with multiple entities are ongoing...," Ms. Ragan said in a news release. "A modified academic program that will continue compliance with the (Southern Association of Colleges and Schools) accreditation policies is currently being developed for the upcoming academic year."
Ms. McDonald said Monday it is not unusual for higher education institutions to cooperate with each other in various ways. For instance, about six schools, including Schreiner University in Kerrville and Texas Lutheran University in Seguin, recently signed an agreement where the schools will provide foreign language on each other's campuses.
"That means not everyone has to have a professor of Chinese. Others might have Arabic. It's an effort to provide a wide range to institutions that are small," Ms. McDonald said. "That (type of) thing happens all the time."
Dr. Belle Wheelan, president of the accrediting body Commission on Colleges of the Southern Association of Colleges and Schools, agreed the steps Lon Morris is taking are "fairly rare." However, schools do close either temporarily or permanently because of finances.
St. Paul's College in Virginia suspended summer courses before the SACS board voted to remove it from membership with the Commission on Colleges, and Paul Quinn delayed beginning a term at one point, Dr. Wheelan said. St. Paul's is in the process of appealing the board's decision, and Paul Quinn has since become accredited by a different group.
Among her other examples was St. Andrews Presbyterian College in North Carolina, which merged with Webber International University in Florida.
Generally, when institutions suspend operations because of finances, she said it happens partly because they haven't had a solid financial planning process in place and may wait too late to take some measures.
"Sometimes they go out of business. Sometimes they merge with other institutions...," Dr. Wheelan said. Lon Morris is "trying to save what they can of the institution and programs so people can finish ... It's an uphill process. Not having enough money impacts everything in the institution, (including the ability) to hire quality staff ... (and) providing support services for students."
Lon Morris is scheduled to undergo a review later this year after SACS found it out of compliance with certain standards.
Lon Morris failed to meet standards related to its faculty, student support services, financial resources, academic program coordination and financial stability, according to the commission.
The regional accrediting body placed the institution on warning status for failing to meet certain core requirements and comprehensive standards. The school is still accredited.
The warning for Lon Morris comes after the SACS commission reviewed several reports related to the college's accreditation process and U.S. Department of Education findings about Lon Morris financial status.
A special committee is slated to conduct an on-site evaluation at Lon Morris in the fall. According to the SACS commission, the board also will review audits and other financial statements, a First Monitoring Report, and the report from the special committee. The board will consider Lon Morris accreditation status in December.
Dr. Wheelan said there are two reasons to be accredited -- to ensure the public that the institution is solid and to be able to pull down federal financial aid.
