As part of oversight from accreditation commission, college is tasked with creating a ‘teach-out plan’
By James M. Odato
The accreditation commission for U.S. colleges and universities is asking Paul Smith’s College to submit a plan to relocate students should it cease programs or operations.
Instead of approving the financially struggling college’s request to be acquired by The Fedcap Group, the Middle States Commission on Higher Education took the step of calling for the college’s “teach-out plan.”
Such a plan is necessary should an accredited institution of higher education close or discontinue programs, and the college administration said the plan was deemed necessary because the school experienced a cyberattack.
Teach-out plans include a written contract with another institution to provide “an opportunity for the students of the closed school to complete their program, regardless of their academic progress at the time of closure,” according to the Code of Federal Regulations.
The Middle States commission asked Paul Smith’s on April 26 to submit plans under terms of the code, according to documents from the commission. The commission seeks the material by May 22, the day after the four-year college’s commencement.
Nicole Biever, a Middle States representative, said the college was required to come up with the plan because it was placed on “heightened cash monitoring” by the federal government.
The college administration did not respond to inquiries about the Middle States notices until Paul Smith’s Chief of Staff Nicole Feml emailed after this story was published online saying that the college “is not closing, has no plans to close, and is working in partnership with Fedcap to plan for the years ahead.”
“As a result of a recent cyberattack, federal regulations require us to develop a ‘teach-out’ plan as merely a precautionary measure,” she said. “The teach-out plan has no relevance or relationship to our financial planning, enrollment targets or partnership with Fedcap.”
She noted that the state has authorized programming for the coming semester but did not get into the details of the cyberattack or other issues raised by Middle States.
Her response was followed on Tuesday by a note to students and employees from Interim President Dan Kelting who said the college’s status on heightened cash monitoring stems from the cyberattack which harmed technology used to perform financial aid.
The monitoring program means the college undergoes a “more robust review of our financial aid programs” and “triggered an automatic process with our accreditor, Middle States, to require what is known as a “teach out” plan.”
The commission, Kelting said, “requires us to ensure that in the drastic event we needed to close, that we would have a plan to ensure every student had options to complete their education. The details of the plan, once approved, would be shared publicly but includes a comprehensive communication plan for all stakeholders.”
How we reported this article
Jim Odato’s reporting has come from federal records, court filings, the Middle States Commission on Higher Education, New York State Department of Education, internal Paul Smith’s communications and extensive interviews.
Follow the link below for some of the documents used in reporting this article:
- Middle States’ statement on the teach-out plan requirement
- Middle State’s directory page on Paul Smith’s College
- The letter that president Dan Kelting sent to the college community
- Middle State’s teach-out plan overview
- A copy of Paul Smith’s original charter
- Letter of support for Paul Smith’s/Fedcap acquisition from NYS Assemblyman Matt Simpson
- Excerpt of letter of support from Joe Martens
- Q&A from 2021 with NYS Department of Education regarding Paul Smith’s proposal to be acquired by a nonprofit
The commission’s notice arrived after Middle States informed Paul Smith’s that its petition to be acquired by Fedcap, identified as a “complex substantive change request,” remained incomplete despite earlier calls for completion. Now, the commission expects the college to start the review process over.
The college’s approval request “was materially incomplete because the written evidence of required approvals was not submitted within the one-year maximum time limit for the Commission’s review.” The deadline was March 11. A new request is due Aug. 1 with proof of approvals, the commission said.
The approvals needed likely refer to the authorizations the college has sought from the State Education Department for its novel combination with an acquirer that isn’t an accredited college.
Lawyers from the SED and from the state Office of Attorney General have consulted on the Paul Smith’s application, according to state documents made available from a public records request.
Matters including a potential charter amendment have been discussed, according to the records provided by the state to the Adirondack Explorer under the Freedom of Information Law.
The college has been seeking approval for more than a year of its plan for Fedcap to become the sole member of a corporation that would control the school save for an independent board of trustees.
Fedcap, based in New York City, runs training programs aimed at preparing people for the workforce. It has wanted to be associated with a college to enhance offerings of its many affiliated nonprofits engaged in job and skills training.
In a brief conversation, Fedcap President Christine McMahon told the Explorer last week that her group remains interested in acquiring Paul Smith’s. “We’re highly, highly, highly motivated and believe in Paul Smith’s College,” she said.
She said higher education is a pathway to economic well-being. “We’re heavily motivated to continue to advance access to higher education for a broader range of people,” she said. “Higher education is certainly facing particular headwinds.”
As schools compete for students, small private colleges have struggled, causing restructuring and closings.
For instance, Cazenovia College ends operations in June, resulting in 552 layoffs, according to state records. It developed teach-out agreements for its undergraduates with several colleges, including SUNY schools, but not with Paul Smith’s, according to Middle States commission records.
Earlier this month, Kelting informed faculty that layoffs may be necessary. The college’s student population fell below 600, he revealed, hundreds short of its one-time capacity.
State education officials have received letters of support of the Fedcap acquisition from the leaders representing Paul Smith’s alumni, students, staff and faculty as well as from Assemblyman Matt Simpson of Horicon and Joe Martens, of Lake Placid, the chairman of the Olympic Regional Development Authority.
The two men chose similar words, sometimes using the exact same sentences.
“At a time when many small private colleges are shuttering, this partnership will ensure Paul Smith’s sustainability for years to come,” Martens wrote.
Martens, and Simpson, whose son graduated from Paul Smith’s in 2019, both noted that the school generates $67 million in annual regional economic activity and provides important environmental education.
“Our community simply cannot afford to lose Paul Smith’s College,” Simpson wrote. He said no one asked him to write. Like Martens’ letter, Simpson’s was addressed to the college board of trustees, whose leaders have declined interview requests.
Editor’s note: The headline of this article has undergone two changes, in order to help clarify for readers. An earlier version that referred to the “closing plan” was misleading for some readers. We apologize for any confusion that may have caused.