flyingiguana Posted April 11, 2015 Share Posted April 11, 2015 "There are plenty of people coming out of the woodwork to explain Sweet Briar's problems. Dr. James F. Jones, the school’s president, claims that there are simply not enough people who want to attend an all-women's rural liberal arts school (though application numbers and some pundits disagree); he blames the discount that the school was giving to low-income students for the institutional budget shortfall. Billionaire investor Mark Cuban says that Sweet Briar has fallen victim to the student loan bubble and that students are unwilling to commit the money to attend, which sounds a lot like the blame-the-homeowner narrative that came out of the 2008 financial crisis. Others are wringing their hands that small colleges in general are doomed. These takes are varied and complex, but they are all missing an important point: that predatory banking practices and bad financial deals played an important and nearly invisible role in precipitating the school’s budget crisis. " http://www.nextnewdeal.net/millennial-pulse/sweet-briar-dilemma-will-predatory-lending-take-down-more-colleges Quote Link to comment Share on other sites More sharing options...
MarkT Posted April 11, 2015 Share Posted April 11, 2015 "There are plenty of people coming out of the woodwork to explain Sweet Briar's problems. Dr. James F. Jones, the school’s president, claims that there are simply not enough people who want to attend an all-women's rural liberal arts school (though application numbers and some pundits disagree); he blames the discount that the school was giving to low-income students for the institutional budget shortfall. Billionaire investor Mark Cuban says that Sweet Briar has fallen victim to the student loan bubble and that students are unwilling to commit the money to attend, which sounds a lot like the blame-the-homeowner narrative that came out of the 2008 financial crisis. Others are wringing their hands that small colleges in general are doomed. These takes are varied and complex, but they are all missing an important point: that predatory banking practices and bad financial deals played an important and nearly invisible role in precipitating the school’s budget crisis. " http://www.nextnewdeal.net/millennial-pulse/sweet-briar-dilemma-will-predatory-lending-take-down-more-colleges Don't know enough about Sweet Briar to speculate if the "bubble" caused it's downfall but I totally agree with Cuban that there is a bubble that is waiting to burst. What a beautiful campus - if Va needs another state college (Honors college) this is probably ripe for the taking or maybe a private school could follow some of this advice: http://www.businessinsider.com/sweet-briar-college-campus-financial-asset-2015-4 1 Quote Link to comment Share on other sites More sharing options...
FaithManor Posted April 11, 2015 Share Posted April 11, 2015 Don't know enough about Sweet Briar to speculate if the "bubble" caused it's downfall but I totally agree with Cuban that there is a bubble that is waiting to burst. What a beautiful campus - if Va needs another state college (Honors college) this is probably ripe for the taking or maybe a private school could follow some of this advice: http://www.businessinsider.com/sweet-briar-college-campus-financial-asset-2015-4 It is gorgeous! The sad reality though is the way that the land was left in perpetuity is going to make it nigh unto impossible legally do anything with it. It has to be a female only institution. The owner of the land was quite savvy in having his lawyers draw up the will/trust in such a way that it couldn't be used for anything else. Sweet Briar tried to go co-ed and couldn't find any loopholes that would allow them to do that. I don't know what it takes to break a will or trust of this nature in Virginia, but somebody is going to have to do some legal toe dancing to make it happen. I wonder though if one of the state schools could do something like purchase it together and use it for some sort of female only spa/resort that might attract donors but use it part of the year for female only classes or study groups or something that would make it "educational" like a female only college within a co-ed university. I'm not certain if that is possible. Just trying to think creatively. Otherwise, it's going to sit empty and go to wreck and ruin. I suppose if some of the endowment was for maintenance of the buildings and landscaping, then the board of trustees would have something to work with to keep it from falling apart for a while as they sort this mess. As for the student loan bubble, I have no idea if that contributed to the demise of this particular institution, but I do think that more and more students and parents are beginning to seriously question student loan debt beyond the guaranteed, government backed loans, and are taking a more conservative view of college financing. 1 Quote Link to comment Share on other sites More sharing options...
MarkT Posted April 11, 2015 Share Posted April 11, 2015 It is gorgeous! The sad reality though is the way that the land was left in perpetuity is going to make it nigh unto impossible legally do anything with it. It has to be a female only institution. The owner of the land was quite savvy in having his lawyers draw up the will/trust in such a way that it couldn't be used for anything else. Sweet Briar tried to go co-ed and couldn't find any loopholes that would allow them to do that. I don't know what it takes to break a will or trust of this nature in Virginia, but somebody is going to have to do some legal toe dancing to make it happen. I wonder though if one of the state schools could do something like purchase it together and use it for some sort of female only spa/resort that might attract donors but use it part of the year for female only classes or study groups or something that would make it "educational" like a female only college within a co-ed university. I'm not certain if that is possible. Just trying to think creatively. Otherwise, it's going to sit empty and go to wreck and ruin. I suppose if some of the endowment was for maintenance of the buildings and landscaping, then the board of trustees would have something to work with to keep it from falling apart for a while as they sort this mess. As for the student loan bubble, I have no idea if that contributed to the demise of this particular institution, but I do think that more and more students and parents are beginning to seriously question student loan debt beyond the guaranteed, government backed loans, and are taking a more conservative view of college financing. If it is no longer a college would it lose it's real estate tax privileges? Quote Link to comment Share on other sites More sharing options...
FaithManor Posted April 11, 2015 Share Posted April 11, 2015 If it is no longer a college would it lose it's real estate tax privileges? I have no idea. All I have been able to find out is that the school tried hard a few years ago to find a legal loophole so it could go co-ed to see if that would increase applications and student matriculation, and the lawyers couldn't make it happen. I think, if memory serves, that the ONLY allowed usage of the land under the terms of the trust was as an all girl's school. What would happen tax wise, I don't know enough about it to speculate but would guess that this could be a big issue for the executor of the estate. Quote Link to comment Share on other sites More sharing options...
Teachin'Mine Posted April 11, 2015 Share Posted April 11, 2015 I wonder if it would do better as a girl's boarding school. For high school students, the proximity to a city and all that goes with that is less important. Quote Link to comment Share on other sites More sharing options...
FaithManor Posted April 11, 2015 Share Posted April 11, 2015 The actual charter was that the plantation had to be used as a school/institute/college for the education of white women. It took two years of legal maneuvers from 1964-1966 to be able to admit a non white female. It wasn't because they were able to legally amend the will. It was plain and unambiguous. It was because a federal court issued a restraining order in the state of Virginia preventing enforcement of racist restrictions. Only 19 million of its 84 million dollar endowment is non-designated and available for use for general operations. 18 million is temporarily designated but the dates at which that money would become available for whatever purpose the trustees want to allocate have not yet expired. 53 million is permanently designated. 19 million is not a very big endowment for operational expenses. They owe 25 million to bondholders. OUCH! The Commonwealth of Virginia - which probably really DOES NOT want to inherit this mess - filed an injunction against the closing of the school seeking to remove the interim president and board. The faculty thinks that if they could raise a 62 million dollar beginning endowment, they could open next year with 120 students. I think that is a pipe dream. 62 million of undesignated funds....the school has an 84 million dollar endowment right now and the vast majority can't be used just to keep the school open. 120 students is less than half the current enrollment! I don't see how it is doable at all. 1 Quote Link to comment Share on other sites More sharing options...
In The Great White North Posted April 11, 2015 Share Posted April 11, 2015 What exactly is the State suing them for? How do they have any standing to sue the college? Couldn't Sweet Briar close just because they wanted to? How can the state force a non-profit (or a business) to continue operating? 1 Quote Link to comment Share on other sites More sharing options...
JennyD Posted April 12, 2015 Share Posted April 12, 2015 What exactly is the State suing them for? How do they have any standing to sue the college? Couldn't Sweet Briar close just because they wanted to? How can the state force a non-profit (or a business) to continue operating? It looks like the county attorney is the one who filed suit on behalf of the state, claiming the state's authority to enforce its law about charitable solicitations and the Uniform Trust Code. See No. 5: https://savingsweetbriar.com/wp-content/uploads/2015/03/Complaint-Opt.pdf However, the attorney general of the Commonwealth of Virginia agrees with you and has filed an amicus brief challenging the county attorney's standing to bring this case on behalf of the Commonwealth. http://www.washingtonpost.com/news/grade-point/wp/2015/04/09/virginia-attorney-general-weighs-in-on-sweet-briar-college-case/ http://bloximages.newyork1.vip.townnews.com/newsadvance.com/content/tncms/assets/v3/editorial/9/05/905a82bc-dee8-11e4-8093-df7e601c6e69/5526c8e699d1c.pdf.pdf So, on top of everything else, essentially you have a showdown about who gets to speak for the state. Very interesting stuff. Quote Link to comment Share on other sites More sharing options...
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