To Members of the WC Community,

We have been receiving questions about the College’s financial situation and the actions that we have taken to assure the financial sustainability of the institution and the integrity of the academic experience for our undergraduates. The challenges we face are real, but our foundation remains strong. I am confident that the measures we are taking will in no way diminish the value of the exceptional educational opportunities we offer our students as Maryland’s premier liberal arts institution.

Below, you’ll find what I hope are brief, clear answers to the questions many of you are asking. As the situation evolves, I will do my best to keep you informed. Thank you.

Wayne B. Powell
Interim President

What is the College’s financial condition?

Washington College is dealing with a structural deficit, which means that expenses are exceeding revenue in the current year. COVID-19 has compounded the deficit. The structural deficit is projected to persist unless we take steps to restore balance. The College’s underlying financial condition is strong. Although we are currently operating at a deficit, the College benefits from a combination of favorable factors. Our endowment of $235 million is large for a college of our size. Our debt load is modest. Our Board and administration have been resolute in taking necessary actions to achieve financial sustainability.

What steps is the College taking to restore financial balance?

Like all of higher education, we are confronting challenging financial trends caused by COVID-19 as well as some earlier structural issues experienced by Washington College. The direct effects of the pandemic have worsened the trends in enrollment that the College experienced the past few years. College leadership has been quick to identify and address these challenges. We began the work of restructuring the College’s finances a few years ago as we started to reduce operating costs in order to achieve a balanced budget. This past spring, we continued that work with the creation of a Budget Task Force that had equal faculty and staff representation. The task force was charged with identifying and presenting possible budget savings to the President, Provost, and Board of Visitors and Governors. We are also advancing a range of ideas for revenue generation, including a new certificate program and summer courses.

What has the Budget Task Force accomplished?

The task force first focused on identifying millions of dollars in non-employee expense reductions. Additionally, because employee compensation accounts for so significant a share of the College’s overall budget, staffing levels were reviewed as well. The task force recommendations were approved by the Board and have taken effect across every area of the College’s operation. They have included both one-time and sustainable measures that are immediate and planned reductions in both academic and non-academic staff. Throughout the task force’s work, its guiding principle was to protect and preserve the quality of the student experience and to enhance the College’s achievement of its mission.

Did COVID create this problem?

The effects of COVID did indeed worsen our deficit. The primary impact was the loss of room and board revenue as well as increased expenses for testing and safety measures. The College made the difficult but necessary decision to forgo this revenue this fall in favor of the value we have for safety and academic continuity.

Are faculty positions being cut?

Yes, the operations of Academic Affairs are part of our overall planned reductions in costs, with reductions slated for both salary and non-salary expenses, including faculty positions. The budget cuts planned for Academic Affairs are proportionate to cuts made in the non-academic budget, most of which were implemented earlier this year. While the final number of faculty reductions has not been determined, the reductions are relatively few in number (fewer than 10), and better align faculty positions with enrollment trends.

How will faculty reductions be decided?

Some reductions in faculty appointments will occur in the coming academic year and have been communicated to affected faculty and departments. Additional faculty adjustments may result from an ongoing review of the College’s educational mission. This is intended to be a faculty-led process, through which the Provost works with faculty committees, department chairs, and the entire faculty to evaluate potential changes in staffing and the impact on educational programs.

Will academic programs be cut?

It is unlikely that any academic programs will be eliminated, although some may be reduced to be consistent with current and projected student demand. Any curricular changes will be a function of changes in enrollment and student demand.

How is the College approaching the question of unionization?

Federal labor laws governing collective bargaining restrict the College’s ability to comment on this issue at this time.

Have employee benefits or salaries been cut?

Yes, there have been benefits cuts, including the College’s contributions to employees’ retirement plans. We hope that some of the cuts – like the one-year suspension of the College’s contributions to qualified employees’ retirement plans – can be restored when we reach fiscal stability. The Board determined that the suspension of retirement contributions imposed a less immediate and painful impact than reductions to employees’ salaries or health insurance. The Board chose not to exercise the option of across-the-board salary reduction for all employees, choosing rather to limit salary reductions to senior administrators who report directly to the president, as well as the president, and hour reductions for a number of other staff members around the College.

Where are we going from here?

Washington College is taking this as an opportunity to assess, be creative, and come out as a stronger institution. We are turning our focus to our future, understanding that the competitive landscape for small residential liberal arts colleges is changing. Washington College will thrive in this new environment by making investments based on its strengths and focusing on ensuring the highest quality student experience.

Well before a pandemic hit America’s shores earlier this year, the job of a college president was listed as one of the most difficult in American education. Faced with rising costs and a lower applicant pool, these leaders were scrambling to recalibrate the role of a traditional liberal arts education for the 21st Century.

All of those long term strategic plans however were abruptly put on hold as the coronavirus quickly emptied college campuses. Millions of students were sent home while tenured professors had to pivot to online learning as the only viable, if not particularly satisfying, solution to keep students on track in earning their degrees.

While at the beginning of the COVID crisis, there was optimism that on-campus learning could resume in the Fall, the reality is that most schools have had to cancel those plans in the face of growing infection rates.

That was the painful decision Washington College made in August when the 239-year-old institution was in the midst of a presidential transition. The then-president Kurt Landgraf and the College’s board had agreed not to renew his contract in late spring. And, as with most institutions of WC’s caliber, it would typically require over a year to properly conduct a search for a new president. The question for the college leadership was whom they could bring on board during the interim when some of the most important decisions related to Washington College’s future would be made as it found its way back from the pandemic’s devastating impact on the school, its budget, and mission.

A few weeks ago, to the relief of many, they found that special person, Dr. Wayne Powell.

Recently retired after fourteen years as president of Lenoir Rhyne University in Hickory, North Carolina, the former math professor, and academic dean has been given substantial credit in transforming a small Lutheran college into a Western Carolina university powerhouse. That included a 120% rise in its endowment value and an increase in its student body by 80%.

In the Spy’s Zoom interview with Dr. Powell a few days ago, he was the first to admit that no one can predict at this time the full impact of the pandemic on schools like Washington College. Nonetheless, like many crises, he also sees the opportunities that coincide with a challenge of this magnitude. President Powell also talks about the real value of the liberal arts education, how the field of mathematics has helped him in his management approach, and how he rejects his new job as a caretaker role.

This video is approximately eight minutes in length. For more information about Washington College please go here. Photo courtesy of the Hickory Record.