Are small town colleges going extinct?

0:01NPR.

0:06Hey, Robert. Looks like you're packing a lunch there. It is September. School is back in session. And I want to make sure my kid has a healthy and informative lunch. Informative, you say? Wait a minute. Did you tuck a copy of the Beige Book in there? I can see it sticking out of the lunchbox. Okay, the Beige Book is my favorite obscure government document about the regional economies in the United States. And yes, it makes for great reading in the lunchroom. I suppose your child can always trade it with the other kids for something more delicious. Ooh, like the monthly retail sales report or the Michigan Consumer Sentiment Index.

0:43I mean, those are all the rage among Gen Alpha, but do they have their own award show? Hmm.

0:53It's the Beige Awards, our eight times a year salute to the art and science of telling stories about the economy. I'm Robert Smith. And I'm Waylon Wong. There are storms brewing in the economy right now, and we will give awards to the Beige Book Anecdotes with the most accurate forecasts. Will it be workers demanding more money or the rich wanting to pay fewer taxes? Or will it be the economic hurricane bearing down on college towns? The winners after the break.

1:25This message comes from Schwab. Self-directed investing, trading, full service wealth management, automated investing, financial planning, thematic investing, retirement planning. And to think that's just a small taste of what Schwab offers. Because Schwab knows that when it comes to your finances, choice matters. No matter your goals, investing style, life stage, or experience, Schwab has everything you need all in one place so you can invest your way. Visit schwab.com to learn more. This message comes from Capella University. You know that feeling when there's a spark building inside you that you were meant for more?

2:04That's your own drive pushing you towards what's next. Capella University gets that. With their FlexPath learning format, you can set the pace and earn your degree without putting life on pause. You've built experience and know what you're capable of. Now, this is your time to turn that momentum into more. The only real question is, what can't you do? Learn more at capella.edu. It is always good to remind everyone how this award show works. There are 12 regional banks in the Federal Reserve System. Each one studies their local economy and brings back little stories of what they see. They publish them in the document known as the Beige Book, and we give awards to the very best stories.

2:47We always start with the runners-up. Our third-place award today goes to the Dallas Fed. In the Beige Book, Dallas employers were talking about how some workers were demanding more money. The quote, Robert? One contact noted job candidates asking for San Francisco wages. Ooh la la. I love that as a shorthand for a worker who wants a raise. Razoroni, the San Francisco treat. Put that in your lunchbox, Robert. It is delicious. But, you know, you have to think, what will those workers demand next? Foggy mornings? Cable cars? Let them eat sourdough, I say. Meanwhile, in another rich city with high wages, the New York Fed gets our second place award.

3:29Why don't you read this one, Waylon? A contact noted that many prospective buyers of luxury properties in New York City shifted to the rental market following a proposed new tax on high-value second homes. This is the so-called pied -à-terre tax. And this is textbook economics. When you put a tax on something, people will consume less of it. In this case, if you tax owning second homes, people will rent those homes instead. Of course, that could then drive up rents. San Francisco rants, the joke never ends. Ay-yi-yi, no, the jokes must end, Robert, because it is time for our big award. And this goes to a regional fed writing about higher education.

4:11The envelope, please. And the beigey goes to... The Boston Fed.

4:24Coming to the stage is Riley Sullivan, lead policy analyst at the Boston Fed. We spoke on September 3rd. Congratulations, Riley. Have you prepared a speech? No, unfortunately, I do not have a speech written, but I'm really honored to be back. Boston hasn't won since 2023, so we are thrilled to be receiving this award. Well, you deserved it. Before we get to your entry in the Beige Book, I have to ask a critical question. Where did you go to college? I went to Boston College. Ooh, a product of Massachusetts' famous higher education system, which as I understand it, is an economic force in the state.

5:03You're absolutely right that Massachusetts, as well as a lot of the other New England states, are really heavily reliant on higher education for employment relative to the rest of the country. Robert, please read Riley's winning Beige Book entry. Education contacts noted a moderate slowdown in activity as one Massachusetts college closed recently and another reversed expansion plans and trimmed headcounts in response to declining enrollments. And later on the Beige Book, it says the outlook for higher education appeared increasingly pessimistic. Oof. Now, if you've been listening to The Indicator, you know about some of the challenges higher ed is facing.

5:45Demographic change means there are fewer teenagers coming down the pike, and the Trump administration has made it harder for international students to get visas. And then there's something that you've written about, Riley. More interest out there in jobs that do not require a four-year degree. Yes, yes. When there are such high costs of tuition, maybe people could be earning money doing something else. Like construction jobs or transportation jobs. Yeah, those jobs as well as ones that just require two-year degrees or certain technical programs, plumbing, electricians. You know, trade schools are really oversubscribed right now.

6:22Which, again, means less demand for traditional four-year colleges. I will say the shrinking and closing of colleges has a huge impact on small towns, which rely on these schools as the largest employer in some cases. And it's obviously horrible for the students and the teachers involved. So we wanted to check in on one school in Massachusetts that suddenly closed this year, Anna Maria College. Anna Maria College was just a little gem in rural Massachusetts. Small student body, I think no more than around 1 ,500 students. Travis Maruska was a professor and former chair of the Humanities Department at Anna Maria College before it closed this year.

7:01We had a big nursing program, fire science, business, and criminal justice. Travis says that although the school closed suddenly, there had been signs for a while. We were always struggling. We were a small liberal arts college. And, you know, when I first showed up in 2008, I got the idea pretty very quickly that there's not enough money. And so at first you're like, oh, no. And then after about 10 years, you're like, OK, crisis is normal. Until one day this spring, the college held a meeting and told them that the fiscal situation was worse than they thought. and that they wouldn't start up again in the fall.

7:39Travis, what do you think doomed the college? Was it the shrinking demographics? Was it the high cost of tuition? Yes, the cost has been going up for years. I can tell you from personal experience, it's not going to the professors, all right? There was an ongoing race to outbid each other to get these students. These students don't show up for the cool professors. They show up for the coffee bar, and they show up for the new building, and the new this, and the new that, and that all costs money. And so I think higher education got into this race to outdo each other. And then the price kept going up, you know.

8:11It's always devastating when a business closes and people lose their jobs. But there is something especially heartbreaking about a college closing. Because the first thing you're worried about are the students. Those are the people you're responsible for. And you want to make sure they land on their feet. And so you're scrambling to find them colleges to transfer to. Maybe your credits can go here, no there. There's all that going on. And then you also say to yourself at some point, wait, what about me? And wait, what about all my friends? And the community that is a family who you've known and loved all these years and enjoyed going to committee meetings, as boring as they are.

8:50I always complained about committee meetings. But doggone it, I like those people. Travis does not plan on returning to higher education, at least not immediately. At 51 years old, he wants to start a new career as a mental health counselor, which he says may be an easier field to get a job in. We should note that Anna Maria College is not the only one that's closing in Massachusetts this year. Hampshire College in Amherst will also shut its doors this fall. Thanks to the Boston Fed for reminding us of the higher education crisis. And congratulations again, Riley Sullivan. Do not wait three years before winning again.

9:25We will try to be back soon. Thank you so much. This episode was produced by Corey Bridges and engineered by Travis Hagan, was fact-checked by Sierra Juarez and edited by Julia Ritchie. Kicking Cannon is our show's editor, and The Indicator is a production of NPR.

9:59This message comes from Capella University. You know that feeling when there's a spark building inside you, that you were meant for more? That's your own drive pushing you towards what's next. Capella University gets that. With their FlexPath learning format, you can set the pace and earn your degree without putting life on pause. You've built experience and know what you're capable of. Now, this is your time to turn that momentum into more. The only real question is, what can't you do? Learn more at capella.edu.