TWICV Special Episode: Closing College Teach-Outs with Dr. Paula Langteau

Welcome back to a special podcast episode of This Week in College Viability. Hi everybody, Gary Stocker back again behind the blue Yeti microphone. The topic today is teach-outs. When colleges close, they have an obligation to teach their students, and with more colleges closing their doors, including Siena Heights University announcing its closure earlier this week for sometime in 2026, there is an increasing need to address what, what closing colleges should do what teach-out colleges should do, and really what students and their families should do when a college they're attending closes, or even when there's a concern that such a closure might take place. My special guest today is Dr. Paula Langto, and she has some firsthand experience with college closures. Paula, thanks for making time.

Absolutely, glad to be on here with you, Gary.

And you had some success. Just briefly tell about the successes you had at the college that closed for you?

So we closed Presentation College, which is a small Catholic college in South Dakota, in August of 2023. And that institution, you know, when we realized we had to close, we made really all of our plans focused on taking care of the people first and primarily the students who are the most vulnerable. And so we enacted a number of different procedures that resulted in 88% of the students who didn't graduate that year or that summer persisting in their educations compared to 47% nationally. And after that, folks like you started calling and saying, what's the secret sauce? It's not secret. There's no reason that we can't share it, and I'd like to see more colleges take better care of their students.

You know, one of the terms that I have coined or used from others is the term college ambulance chasers. Now, it's not meant to be derogatory, it's meant to be descriptive. But Paul, in your experience, I believe you've shared with others before that there are some colleges who have the best interests of the students at heart when their colleges close and those that don't. What are the categories of colleges the way you look at it when those teach-outs are required?

Well, I see it as really 3 categories. There are the teach-out partners, and they have special requirements, and those are documented by the accrediting organization and guaranteed by the accreditor. And those are guaranteed credit acceptance of 100% of the students' credits, same time to degree completion. That's the second one, and that's critical because they could guarantee acceptance but only accept them as electives. We're talking about accepting them in the same way that the original institution, the closing institution, did. And then finally, the same net out-of-pocket tuition cost for the student or less. Those are 3 big things that teach-out institutions have to agree to, and it's guaranteed in writing and it's enforced by their accreditors once the closing institution closes. So those are perhaps the best choices if students can find a match there. The second type is what I would call the respectable transfer institution. These are institutions that for whatever reason can't be teach-out partners, and yet they still have the best interests in students at heart. These are financially stable and programmatically stable institutions, and they may offer some sort of streamlined credit transfer for students to try to optimize the number of student— or, excuse me, so they try to optimize the number of credits that are accepted from the students from the closing institution, and they try to as closely as possible match the teach-out guarantees. They clearly let students know which credits they're going to accept and transfer, what the time to degree will be, and what the out-of-pocket tuition costs will be for those students before they make the transfer choice. The last category is, I think, what you're referring to. Do you want to tell a little bit about that before I get into that?

Well, yeah, there, there have been college closure stories over the last many years, and one of the things I have done, not with all of them, Paula, but with some of them, is I will look at the list of teach-out partners that these closing colleges announce, and I will go and look at the finances. That's what I do. I like the financial health and viability of public and private colleges across the country. And Paula, too many times, too many of those teach-out partners are themselves financially troubled, and they are just looking for a couple extra bucks, is my perspective. Now, they'll never approach it that way, but that's my perspective.

And that might be the case for some. I think there could be a misunderstanding among institutions that, um, want to accept students in transfer or even in teach-out that somehow they're going to make money. And this might not seem very believable to you, but teach-out institutions don't make money. In fact, they're pretty much going to break even. Sometimes it might cost them a little for their generosity of spirit in trying to help these students. Now, you might say, why? Yeah, but that's because they are accepting 100% of the credits. They are guaranteeing the same time to degree. And the big one is they are accepting that net out-of-pocket tuition cost, which means they have to match the financial aid that's been given to them, given to these students by the closing institution. And a lot of times these closing institutions are closing because they have given too much financial aid to students and are not able to sustain themselves given the significant discounts they've given to students. Now, a teach-out institution can not go into debt by taking on students if they can slot them into existing courses. And not have to add new professors to bring these students in. But that's why they have to look ahead and look at their own capacity before agreeing to be a teach-out institution. But in general, and I think most CFOs who have gone through this process can validate what I'm saying, teach-outs don't tend to make money. They do it because they love students and they want to help those students who are going to be displaced in a really tragic way if not for their help.

So in a minute, I want to talk about what students and their families can do in, in preparation for a college that announces this closure, or where there might be some significant risk that that would be the case. But before we do that, let's put you on the mountaintop, and you have every private college in the country listening to you, including those with some financial distress. What would you— what guidance, Paula, would you give to those college leaders who clearly have financial distress and might have to look at closure and offering those teach-out agreements?

The first suggestion I would make to them is get real about your situation. Most institutions want to continue to help students. That's why we're in the business. And sometimes they're hoping, praying for a miracle to happen, for donors to suddenly appear out of the blue, for cost-cutting and program closing to miraculously change their budgetary situation, or for a brand new program to enhance, you know, attract students and bring them in in large quantities with our new marketing strategy. And that's great. And if they want to pursue a means for turnaround, that's great. But I think they need to simultaneously pursue the closure process so that if this doesn't work, if their, you know, Hail Mary doesn't materialize, that they can take care of these students properly. And so they really need to, you know, look into what their finances are and how much runway they have. And this is what I do when I work with colleges is that we sit down and we get real together and we analyze the funds together and we look at the market together and who their competitors are and we plot a course for either turnaround, which sometimes is potentially possible, but also a backup plan for closure so that they do it in enough time to take care of those students as well as their faculty and staff.

It was about this time in 2024, about the first half of 2024, when there was about one college closure per week. Sadly, many of those in that time frame last year were short notice closures. University of the Arts in Philadelphia is one that stands out as the most notable. I've seen the pattern for the last 4 or 5 years when, and even though that pattern slowed down a little bit in the last year, there's still this pattern where colleges out of their own self-interest and the worry, and there were worries about a self-fulfilling prophecy, where the line has been effectively, we're fine, we're fine, we're fine, We're closed. And again, from your perspective, is that something college presidents should fight their way through, or is that just a reality that we all must live with?

You know, I actually came to having to fight my way through that, you know, in the college closure that I actually did. I think it's important to try to pursue a turnaround strategy. These institutions serve a really important niche of students, especially those who are underserved, you know, under-resourced. There's a really important need for small private, especially colleges in this country. I understand that. But it's incumbent upon them to also prepare for Plan B because without doing so, they seriously disadvantage what I consider the most vulnerable population. I think faculty and staff will rebound. They will find another position. Students oftentimes, if they are displaced, like I mentioned the statistic earlier, more than half of them don't go on to finish. And if they do stumble upon another college that's in serious jeopardy and they don't know it, then they end up losing that opportunity twice. And it can be very discouraging, and it can also harm their eligibility for federal financial aid because they only have so many semesters. Of federal financial aid eligibility before they're unable to get any more. And if their credits don't transfer, if they choose another college that fails, these things can lead to their losing the opportunity to get the financial resources they need to finish.

So, Paul, I've heard you speak with some passion in different media interviews before that colleges should not leave any student behind. That's really what you did at presentation. And I understand that, that college leaders have that fiduciary responsibility to the college. I understand that. But how do you balance that as a college leader with that obligation you talk about with such passion about not leaving any student behind?

Well, I think the prior planning, which I already mentioned— in other words, if you're looking for turnaround, you're also planning for closure at a separate parallel track just in case you need it. And then in terms of looking to place these students, do some institutional vetting of your own as an institution. There will be a lot of people coming forward, I'll be a teach-out, I'll be a transfer partner. Okay, great. Let's let them have clarity on the process, on the expectations, talk to them about financial aid, how they're going to support the students as they transition, get them if they're not teach-out institutions, if they're transfer institutions, put their own guarantees in writing on credit transfer, on time to degree. In other words, help these students sift through the other opportunities. In my case, the accreditors required only 2 teach-out institutions and we developed 36 because I said to the students, I emailed them, I said, if there's an institution you want to go to and it is not listed as one of our transfer— excuse me, our teach-out partners, then let me know. I will personally call the president of that institution and try to get a teach-out agreement. Now, you mentioned something earlier that I'd like to back up, Gary, and talk about, and that is, you know, how do you know that these institutions are going to be financially stable in the future? Now, the accrediting organizations do require when a college is closing, that it create a teach-out partner list that covers all of the majors that are currently taught at the closing institution and in the modalities in which they are delivered. So if you have a nursing program online and one on-site, you have to have a teach-out partner that's online and a teach-out partner that's on-site. Oh, so this requirement for so many programs often leads to institutions accepting teach-out partners that they either don't have time to vet or don't have any other alternative to. A lot of times the accrediting organizations are going to look at proximity, especially for on-site delivery. So if I'm having on-site delivery, for example, in South Dakota, but I find a TCHL partner in Maine, that might not be sufficient because all of those students who are in South Dakota want to go to Maine, right? So they're going to say, find me a teach-out partner as close as possible in proximity. And if you have an unusual major, there might only be one or two others, or maybe even none, in the same state as you. And when you find one, they may or may not be as financially stable as you would like them to be, but you put them on the list because they meet the accreditation requirement. So having really frank discussions with the accreditors is important, and I think this is where you come in handy. You've done a lot of research on these institutions that are not financially stable. When I work as a consultant with an institution, if I don't know, I reach out to you and I say, hey, you know, does this institution look stable to you? And I love that you never ask why or who I'm working with. You're just like, hmm, you know, and we can have these conversations and make sure that the closing institution is properly vetting, making sure that they can live up to their expectation.

You know, the history of higher education in America has been one of, for decades, if not centuries, of absolute trust. Trust in the college, trust in the higher education process. And really, in my mind, and feel free to comment on this, we've evolved away from that, where that transparency needed in what's really a consolidating market where there are way too many colleges, way too many college seats, and not enough students to fill those seats. There's going to continue to be closures. There's going to continue to be college consolidation in the form of mergers somewhere down the road, and more and more needs for these teach-outs. And yeah, you're right, you know, for those listening to the podcast, when Paula drops me a note, 5 minutes, you know, the tools I have at my disposal are very quick and can be very thorough. And so at College Viability, you know, you can reach out to me and I'll put the contact information in the show notes, and then we'll do that. We'll do that very quickly. I can provide documentation for any number of colleges, because that's my role in financial transparency. You know this, Paula, not just for colleges but for students and families as well, as I provide resources for students and families when they're deciding on colleges to look at the financial health of those colleges as well. I want to transition to the final thing that we're going to talk about today. We've talked about colleges and the requirements and the needs they have for the teach-outs, um, students and families. Many times, if not almost all the time, when these closure announcements happen, almost everybody, Paula, says, boy, I didn't know. Or they, in spite of the fact that there's been many leading indicators that the college was in trouble, what kind of guidance would you give to students and their families? And I want to offer some perspective as well.

Well, I'm actually going to take this in two parts because the first one is I want to talk about why the institution may not be as transparent or give as much notice as students and families might like. And one of the reasons for that is that, you know, human nature. People tend to react without thinking about if it's in their best interest. And as a result of that, sometimes accrediting organizations say don't announce until you have all of the teach-outs lined up, until you have all of the communications ready for the student. Until you can explain to them what's going to happen next. Because if you think about it, if an institution announced we're going to be closing, I don't know, in 6 months, for example, yeah, as a student you're going to say, what does this mean to me? Where can I go? What kind of help am I going to get? And you want all those answers right now, or you're in your dormitory packing up to get out. And what we don't want is for someone to leave to their own, um, you know, to their own harm. Because when they leave, then they don't find out about the teach-outs. They don't get the opportunity to make sure they get all of their credits and transfers. They get these guarantees that the teach-outs can provide. So we are actually required to have all of that lined up by our accreditors before we announce so that students don't panic and actually do harm to themselves in terms of you know, their next steps. And so that's part of the reason it doesn't happen with a long period of time. That said, I do think it is incumbent upon an institution to give students at least a full semester of warning, because then they'll have that time to work with the students with the preparations they've already done, with the teach-outs they've already developed, with the transfer agreements they've already developed, with the institutional vetting they've already done to protect those students in the next stage. And ultimately, it's the protection of the students that's the number one priority. So that's my first part of the answer to the question. And the second part you asked is, what can students do themselves when they would like to transfer or go to a teach-out institution? Hopefully their institution's done a lot of vetting, but they can also do their own research. Is that institution properly accredited by a regional accreditor? Is the program quality there? You know, is this institution laying off people right now? Is it closing programs right now? Those are signs of instability. Do they have the faculty expertise in the program that you want to graduate, the major you want to graduate with? Do they have the student support services? Are they offering you a financial aid package? Are they saying they're going to accept all of your credits? If not, how many. You know, students need to be very astute consumers also of their own education and ask these questions, and parents need to ask these questions. And if they don't know the answers, of course your app is an excellent resource for them on financial stability. But beyond that app, they also have to ask a lot of important questions to protect themselves.

You know, this will be an audio-only recording, but if you were to see the video of this, you would see across my forehead written the words data nerd, and there's a reason for that. I tease about that, of course, but when, from this, from the perspective of students and parents, Paula, there's just 3 things I encourage folks to look at that really quickly reveal the trends, patterns, and comparisons at a college. And those 3 things are enrollment. And again, the apps that you mentioned, thanks for mentioning those. The College Viability app for students and families tracks the last 8 years of enrollment trends. If that enrollment has gone down in each of the last 8 years or over the last 8 years, be concerned. Look at the 4-year graduation rates. I am a minority when I say graduation rates matter because there are more than— believe it or not, you know this— more than half of American 4-year public and private colleges do not even graduate half of their students in 4 years. That's an unspoken national catastrophe. You want to look for colleges that have the capacity, the historical capacity, to graduate at least and that's being nice, at least 50% of their students in 4 years. And even sadly, I track 6-year graduation rates, and there are too many colleges that don't even graduate half their students after 6 years in college. And finally, something called an endowment. Simplifying it, it's kind of a savings account. And if your college that you're looking at doesn't have an endowment— and I track this for you from almost 3,000 private and public colleges in the country— If they don't have an endowment of at least $50 million, 5-0 million dollars, be concerned. That is my minimum. There's nothing behind that besides the college viability minimum. But many times— and there was a college up in Wisconsin, Northland College, who wanted to raise something like $12 million in 3 weeks. And over the history of their organization, they'd raised $6 million or $8 million, some small number. If a college hasn't raised $50 million to date, they don't have the resources, they don't have the systems and processes, Paula, to do that on a short notice. And so if a college says we're going to go to our donors, well, trust me, from the research that I've done, the news stories that are out there, donors don't want to give to a college just to keep the lights on, just to meet payroll. They want to give their donations for scholarships for students and to make the college a better place for students. So, Paula, we've talked about perspectives for both students and families and for colleges themselves. And how about just a last bit of guidance that you would provide to colleges, again, from the successful experience you had at Presentation College a few years ago to address that really, really, really tough topic when it's time to turn off the lights?

Well, there's one other group that we didn't mention that I would like to get in here, and that is if you are an institution that wants to be a prospective partner to help a closing college, whether that be as a teach-out partner or as a transfer partner, there is some preemptive planning that you need to do to be able to respond quickly. I think of it almost like an emergency preparedness kit. You have to be ready when a college announces it's going to be closing to help them. And one of the things is, first of all, do not reach out if your own future is potentially unstable because what you're doing is actually causing more harm to students who are already going through a difficult time. Understand your own capacity and what you can take on, and have in place the administrative infrastructure to handle whatever influx you think you might be able to negotiate with an institution that's closing. Make sure you talk to your faculty if you have a shared governance process where they have to approve credit transfer. Get that done in advance, or get that done as a special exception for closing institutions so they don't have to weigh every single credit on whether they're going to accept it. There are things that you need to do and talk to your institution, work through your governance processes to be ready to be a good partner.

Dr. Paula Langto has been my guest today. We've been talking about teach-outs, and that's kind of an inside baseball term for what colleges are obligated to do when they need to close their doors for whatever reason. And it's becoming an increasingly important topic because we're looking at a scenario where it's quite likely that more colleges will continue to close in the coming months and years. And to protect those students, there are requirements, there are guidelines from accrediting agencies and others to protect those students. Dr. Langtoe, thank you very much for making time to chat today. We'll look forward to having you back on the podcast another day.

Always a pleasure, Gary. Thank you.