Albright College, located in Berks County, Pennsylvania, is facing a severe financial crisis. With a massive $20 million deficit, the college has been forced to make significant cuts, including eliminating 53 positions, canceling academic programs, and even considering the sale of property and art. Despite these tough decisions, the college’s leadership remains hopeful about its future and is taking steps to manage the situation.
In a recent interview with Spotlight PA, interim President Debra Townsley expressed optimism. She highlighted that Albright College had cut its expenses by half compared to 2023 and was working on boosting revenue through revamped admissions, fundraising, and advancement efforts. She stressed, “There’s only two things we can affect: revenue and expenses. We’re working on both sides of that, and that will right-size the organization.”
However, what Townsley did not mention was the college’s request to borrow up to $25 million from its endowment fund. This emergency measure was necessary to prevent the risk of closure, as the college was running low on basic operational funds. The loan, granted on December 20, 2024, allows Albright to access the endowment fund if needed. Officials insist the loan is a precaution, and they are hopeful they won’t need to tap into the fund this semester.
Struggling Against Declining Enrollment and Unfavorable Market Conditions
Like many small colleges in Pennsylvania, Albright has been grappling with a significant decline in student enrollment, a trend worsened by the COVID-19 pandemic. Officials have attributed the college’s financial struggles to both declining enrollment and “unfavorable market conditions.” Since 2017, 10 colleges in Pennsylvania have closed or merged, including the University of the Arts in Philadelphia, which filed for bankruptcy in 2024.
To make matters worse, Albright owes $50 million to various financial institutions and has suffered a net asset decline of over $46 million from 2022 to 2024. To deal with the deficit, the college has implemented a series of drastic measures, such as cutting staff, eliminating low-demand majors, and adjusting its programs to better match student interest.
The Endowment Loan: A Double-Edged Sword
The endowment loan from Albright’s $65 million fund is viewed as a temporary solution to keep the college afloat. College officials likened it to a “self-funded line of credit” that will only be used if absolutely necessary.
However, borrowing from the endowment is not an uncommon practice among colleges, especially during financial crises. Many higher education institutions across the country, including those hit by the pandemic, have considered tapping into their endowments as enrollment and donations plummeted.
Albright’s decision to borrow from the endowment rather than taking out a traditional bank loan was prompted by the college’s already existing debt and the high interest rates from banks. Albright had been quoted rates as high as 25%, which they argued would further harm the college’s recovery. The endowment loan carries a 5% interest rate and requires the college to report its usage to the Pennsylvania Office of the Attorney General for full transparency.
Changes to Programs and Staffing
As part of its efforts to right the ship, Albright has made several changes to its academic offerings. The college has eliminated several low-enrollment majors, such as economics and philosophy, while introducing new programs like cybersecurity, vocal performance, and music production. These changes aim to attract prospective students with interests aligned to current job market trends.
Townsley emphasized that these decisions were made in collaboration with faculty and staff, based on enrollment data and student interests. For example, although the economics major will be phased out, key courses within that field will remain available as electives for business students.
In addition to academic adjustments, Albright has introduced new athletic programs, including men’s and women’s wrestling and an NCAA Division III Stunt program. These additions aim to improve student life and attract new students, although the financial impact of these programs remains unclear.
Selling Art and Property
Albright College is also exploring ways to raise funds by selling off art and unused property. The college owns artwork with local significance, some of which may be sold to the Reading Art Museum. The college has also put up two vacant properties for sale. Townsley explained that while selling these assets won’t immediately solve the financial gap, it will help alleviate some of the burden.
Faculty and Student Unrest
The financial challenges have not been easy for everyone at Albright. Last year, a “no confidence” vote was passed by the faculty against former President Jacquelyn Fetrow, who resigned shortly after. This left the college with a leadership vacuum, which Townsley has since filled in an attempt to restore stability.
Despite her efforts to improve transparency, some faculty members still feel uneasy about the future. There is growing fear that further job cuts are inevitable, and some staff members have expressed frustration over the lack of communication. Townsley’s office has held several forums to engage with students and faculty, but the continued uncertainty around the college’s financial future has left many feeling anxious.
Donor Concerns Over Endowment Loan
The decision to borrow from the endowment fund has raised concerns among donors. Some, like Kevin Murphy of the Berks County Community Foundation, have expressed disappointment that the college did not discuss the move with them beforehand. The community foundation, which manages scholarships for Albright, is concerned that this will undermine trust and donor confidence in the institution.
Despite these concerns, Albright College insists that the endowment loan is a necessary step to ensure the college’s survival. The college promises to use the funds responsibly and with transparency, and it is committed to restoring its financial health.
Conclusion
Albright College’s financial situation is a stark reminder of the challenges facing small liberal arts colleges in the United States. The combination of declining enrollment, high debt, and unfavorable economic conditions has forced the college to make difficult decisions.
While Albright’s leadership remains optimistic about the future, the road ahead will be challenging. The decisions made now will determine the college’s ability to weather this storm and remain a vital part of Pennsylvania’s higher education landscape.
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