Let me just come out and admit it: The moment I heard the kiss of a rumor that the State of New Mexico might step in and save the College of Santa Fe, I decided it was the perfect solution and nothing else would do.
The whispering said that Gov. Bill Richardson liked the idea, that the college would remain independent from the University of New Mexico and retain its arts focus, that tuition would drop and that regional enrollment would increase. Lottery funds would offset costs and the state could lay claim to a progressive, arts-centric liberal arts school in its gem of a capital, Santa Fe.
The Savannah College of Art and Design (SCAD) and other for-profit colleges vying to scoop up some City Different real estate could, as they say, take a flying f *ck at a rolling donut. Richardson loves to be a hero and Cabinet Secretary of Higher Education Reed Dasenbrock expressed serious interest as well, so I figured those boys and I were on the same page with this one.
So, imagine my surprise when it was reported that the CSF board voted unanimously to move toward a "partnership" with Laureate Education, Inc. Soon after, CSF President Dr. Stuart Kirk announced that the wheels of state government were too slow (meaning, also, that the situation at CSF was too dire) to pursue any option with the state. When I finally sat down with Kirk to get the full story, I wanted to know why the deal with the state is dead.
"Our financial situation is such that the state would have had to take a pretty big bite in order to make us part of their system," Kirk says. "The state has to go through appropriation processes and this and that."
Reluctant to go on the record about the full extent of CSF's debt and the speed with which it must be satisfied, Kirk is clear that it can't wait until the next state legislative session. Talks with the state began approximately four months ago—too late for consideration in the last round of funding—in another demonstration of the sometimes stubborn and insular nature of the college, despite its recent attempts to be more open and involved with the community.
Kirk, however, backs the CSF decision to pursue a partnership with Laureate. He says he's personally vetted the company and its educational holdings, and spoke with at least one of the university presidents within the Laureate network, all to favorable impressions. "They're expecting to invest $80 million dollars here over the next few years," he says. (According to the rumor mill, approximately 40 percent of that would go toward satisfying the existing debt.) Additionally, following detailed discussion with Laureate, Kirk feels satisfied that no Santa Fe staff positions will be lost, and he expects the addition of new positions and facilities.
The idea of a for-profit corporation taking over a beloved community, educational institution is a hard pill. No getting around it. When Laureate's chairman and CEO Douglas Becker led a buyout on the company a few years ago, making the transition from publicly traded to private, there was an uproar and a fight. Shareholders felt that the chairman, in selling the company to a consortium including himself, was low-balling stock prices. Becker and his investors outwitted other shareholders, however, and took the corporation private. Since then, nothing untoward has blipped on the company's radar screen and it has been able to operate unbeholden.
Kirk, who holds a PhD in economics, argues that such freedom is what will allow the company to invest so heavily in Santa Fe with the hope of returns at least 10 years out. Laureate has never purchased and destroyed or parted out a campus. CSF is—cliché as it is to say—cash poor and land rich, but selling everything and parting out the campus is, as Kirk says, "about a wash," given the significant debt.
So, let's look at the best possible situation, which involves a Maryland-based, global education consortium taking hold of our community's most populist full-degree college. Major Laureate investors include Microsoft founder (and regional hero) Paul Allen, liberal icon and progressive global financier George Soros and the conservative but savvy Harvard Endowment Fund. Kirk's assessment is that Laureate is willing to invest in CSF because of the cache of Santa Fe. Doing the numbers on when Laureate might actually pull a profit is brutal; but if it's the truth, nothing but gain exists for the local economy and the future of CSF. True, an ideally superior and more locally friendly situation could have come from working with the state, but would the state have been able or compelled to invest some $50 million beyond satisfying CSF's debt? Doubtful.
So, one may decry CSF's vote to court Laureate, but Laureate's willingness to invest in Santa Fe in many ways outweighs Santa Fe's willingness to invest in itself. If Kirk's belief that Laureate will follow through with its investment and a mission to integrate the college within the community—while leaving admission standards and core mission in the hands of CSF—is true, there could hardly be a better option. At a time when for-profit contractors are making gruesome impacts on military maneuvers and prison management and corporate citizens can hardly be said to have the nation's best interests at heart, it's a frightening place to entrust education. Still, Laureate has a check that other private companies don't. Not shareholders, but a significant student body in countries like France and Mexico where the students don't take poor conditions lying down and are known to rally and protest at the drop of a hat (or the need for a faculty pay raise).
And if the Laureate deal doesn't go through? "It would be a hard scramble," Kirk says. "It would be very difficult."