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Agnes Scott retains ‘A’ credit rating amid difficult times for higher education

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Agnes Scott retains ‘A’ credit rating amid difficult times for higher education

Buttrick Hall as seen from across the The George W. and Irene K. Woodruff Quadrangle at Agnes Scott College. Photo provided by Agnes Scott.
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By Sara Amis, contirbutor 

Decatur, GA — Agnes Scott College, like other small liberal arts colleges, has seen some struggle in recent years.

In 2015, Fitch Ratings and Standard & Poor downgraded ASC’s credit rating based on the rate of spending from the college’s endowment and relatively low enrollment.  Similar schools around the country were closing. At that time ASC was putting its SUMMIT program into place, which then-president Elizabeth Kiss described as “reinventing women’s liberal arts education.”

SUMMIT, which is built around leadership and global learning with a strong travel component, garnered widespread praise. U.S. News and World Report put Agnes Scott at the top of its list of Most Innovative liberal arts colleges. SUMMIT was working to bring the college back on track financially as well, and ASC was on track to meet its enrollment goal of 1100 students by 2020, a number required to maintain long-term sustainability but which Fitch described as “aggressive.”

Then the COVID-19 pandemic hit, bringing with it financial uncertainty to institutions of higher learning across the United States. In addition to an overall drop in the college-aged population, distance learning classes mean there is no revenue from on-campus housing or fees associated with campus activities. Some students are delaying enrollment altogether. Furthermore, travel bans and safety considerations even when travel is technically possible have made SUMMIT’s study abroad component impractical in that form for now. However, ASC appears to be weathering the storm.

Fitch Ratings recently affirmed Agnes Scott College’s “A” credit rating, while revising its rating outlook from “stable” to “negative” based on the assumption that the widespread drop in enrollment and revenue would force ASC to draw further on its endowment in order to maintain operations.

However, ASC President Leocadia Zak says that while revenue is down, spending is also down.

“We balanced our budget during this time, because our faculty and staff, especially our senior leadership, were willing to take some pay reductions and some reductions in expected benefits, with the result that we were able to continue doing the work and serving our students,” said Zak.

In addition, enrollment has continued to increase to 1,081 students.

“We have the largest number of students in Agnes Scott’s history. For this fall, everyone held their breath, and we were very pleased to see that our enrollment held and if anything increased,” said Zak.

She credits the high number of returning students to the fact that faculty and staff checked in with students over the summer to talk about their return.

 

Currently, all classes are being conducted remotely, with plans for a limited return to campus in the spring. The college plans to open on-campus housing at 50 percent capacity, with a combination of in-person classes, distance classes, and hybrid classes. Professors, who attended summer workshops on how to use the technology required for remote classes, will be able to choose whether to be on campus or continue to conduct classes remotely.  The opportunity to return to campus will be offered on a first-come, first-serve basis, with consideration for students who have particular needs.

Zak said that in addition to a desire for the college community experience, some students need the 24-hour access to the internet and freedom from distractions and outside obligations that being on campus provides.

“Agnes Scott has no racial, ethnic, nor socioeconomic majority. So for some of our students, being at home is not the best learning environment,” said Zak.

The global learning component is being modified rather than put off.

“Our faculty is working with our students to create a virtual experience for our students,” said Zak. “They can still explore the international experience and relationships with individuals. I think this is something that will still be applicable after COVID and be able to be shared with people who may not be able to travel at that moment, not just with our students.”

Zak views ASC’s ability to remain financially stable even under adverse conditions as an achievement.

“This is an unstable time for an industry that relies on having students, and having students on campus,” said Zak, but she remains optimistic for the college’s future prospects and growth.

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