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.
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Tara Genieys says
In the charter letter written by the original board of trustees of Paul Smith’s College of Arts and Sciences to the Board of Regents when the college was founded there is a paragraph that distinctly states that the intention of the board was to create opportunities for underserved students and to provide them with occupational skills they could take out into the workforce. It was the intention of the founder, it was then the intention of the founding board and it’s the intention of FEDCAP. If anyone wishes to have access to the charter letter it is in the archives in the library on campus. IMO Fedcap and PSC are a match made in heaven. It was this letter which the BOR used in their decision to extend the charter to PSC. FOIL produced several amendments to the original charter as the school expanded their degree program. It can handle one more. I guarantee if Phelps Smith could see where we stand now at the precipice of furthering the future of the college by means of a collaborative RELATIONSHIP with those who seek the same and more, he would be very proud. That’s the pioneering spirit his father Apollos bred into him. So why doesn’t everyone involved stop, go back to the basics and find the answers. As an alumni I would personally love nothing more than to hear that the campus was thriving again and churning out hard workers and that the employees and administration on campus could be retained and work together doing what they do best. The world needs more Smitties.
Andrew Charles Gardon says
Articles like this only hurt. The fact that a teach out plan has to happen is simply that-fact. It’s a requirement, not a reflection on the school. This is a nation wide trend where small institutions like Paul Smith’s are struggling. Paul Smith’s has faced greater challenges than this, and I have absolutely no doubt in my mind that we will continue to thrive and make it through these somewhat challenging times.
In the meantime, it would be appreciated if we weren’t attacked by the media around every corner we turn. Paul Smith’s has done nothing wrong, and is only trying to be successful in a challenging time for enrollment. Erroneous articles like this push the head down of a institution treading water.
As a Paul Smiths Student, I have never felt more welcomed, accepted and encouraged to succeed with my goals both in college and for my career. I am proud to be a Smitty, and learn amoung such an incredible group of learners and professors. Paul Smith’s College is the life blood of the Adirondacks, and it’s success means the success of the Adirondacks, our community and our North Country way of life.
Holly Harz says
Its articles like these that spread rumors. Shame on you, Adirondack Explorer. I will agree with Ms Genieys…the world needs more Smitties. Lets look at all the positives…the new programs, the improvements being done on campus, instead of focusing on the “what ifs” and turning people away who think, from your headline, there might be a closure.
PSC employs many. The college’s alumni are loyal and have made a huge impact after graduating. Why not choose to write about all the positives that the college provides? Find just a few of the many, many very successful alums and write about them and draw more students to the college?
As a writer, you have a choice, and a large impact with your words. Please use it for the positive, for the good, not to sell a story, one that could do harm If people don’t read through and understand that the plan is just that…a PLAN “in case”–that is merely a requirement that YOU made sound like an imminent threat.
You can do better….
#till the last white pine falls #forever
George Locker says
What does Fedcap propose to pay to acquire Paul Smith’s buildings, infrastructure, and land? Where is this number?
What is the financial and legal assurance that PS will continue to serve the students that it currently attracts after it is acquired by Fedcap? Where is the legal agreement?
All I have read is a lot of vague statements of how great this acquisition could be. Notably absent is anything concrete or specific. I’m sure it’s great for Fedcap. But for PS? If it is so great, why not collaborate now? Or last year? What’s stopping Fedcap?
I see a land grab and the eventual disappearance of PS. Do the writers who criticize this newspaper know something everyone else doesn’t know? Please share it. Otherwise, support this newspaper’s attempts to get at the truth.
Keep up the great reporting!
It is difficult to impress on someone who is not deeply involved in higher education, the magnitude of the changes that have occurred in the last 5 to 10 years. Add a global pandemic to the picture, and you have a perfect storm for the collapse of institutions of higher ed. across-the-board. Hundreds of colleges have closed due to low enrollment and thus, loss of principle revenue. Their campuses sit empty. They have closed because they could not find a way out of the socio-economic quagmire that is drowning traditional colleges. PSC is attempting to stave off the same ending as so many other gloriously historical and culturally important colleges. The college of the Adirondacks is not immune from the forces outside of the blue line. In fact, it is considerably more vulnerable to them. There are governing bodies that will protect the students and the quality of education that will be administered. I believe this is key to an ethical transition into the new landscape of higher ed. We just never believed it could happen here.
Robert Grayson says
A plan to “teach out” is not a plan to “close”. Very misleading headline that only serves to grab attention, increase circulation and throw shade on PSC. More ad dollars for the paper! If the paper is searching for revenue why not partner with PSC and set up a finders fee for every qualified/accepted student that matriculates in exchange for free advertising in every edition of the paper they publish. After all both institutions stand to benefit from a collaborative approach for the sake of the broader community. I might add that while some of the admissions are scant the omissions are numerous. It is the responsibility of college leaders to lead, they can start by leading the communication with transparency and honesty. That way the paper will have no other choice but to report on the facts and remove the speculation that these sorts of stories perpetuate.
A follow up would be a breadth of fresh Adirondack air.
How about having Mr. Odato write a positive story about the Paul Smith’s College community. I would love to see a story about the beneficial relationship between PSC students and the Paul Smith’s Gabriels Volunteer Fire Department and the Town of Brighton.
Greg Hart says
Paul Smith’s College is a gem and an enormous asset to our region. The graduates of PSC degree programs are well regarded in the workplace. The faculty, admin and staff are top notch. The Explorer reporting has simply pointed out that Middle States called for a plan in place to support the students in case there was a closure. Small private colleges are under considerable pressure these days and it is proper due diligence for the Commission to ensure that students (and their student loans) are supported.
The other point brought up in the article is the relationship with Fedcap. In the world of workforce education and training, they have a good reputation. What new opportunities coming out of that partnership will ensure the future of PSC and benefit the region?
Thanks for the good reporting
George Locker says
The nearly identical letters to Paul Smith’s trustees from Assemblyman Simpson and Mr. Martens both support a “partnership” between Paul Smith’s and Fedcap. They do not refer to an acquisition. They are not support for an acquisition.
If Mr. Simpson or Martens support an acquisition of PS by Fedcap, they need to say so because Fedcap states unequivocally that it wants to acquire PS.
Do the letters of support from alumni, students, staff and faculty refer to a partnership or an acquisition?
If these groups support a partnership, then no one supports what Fedcap intends to do: acquire PS.
If these groups support an acquisition, does anyone in these groups know the terms of sale? I think that no one really knows. Prove me wrong.
Anyone who has knowledge of the actual terms of this deal should make it public.
Frank Whitson says
Any story about the Paul Smith’s –
Gabriels VFD needs to go back to the student club, the Paul Smith’s
Fire Department which was started in July 1966, when students
” recycled ” a 1945 fuel tanker and a 1943 500 gallon/ minute pumper
which was found on the campus.
I was the second historian and in
2017 I finished 2 new expanded scrapbooks adding many never-
before seen photos and documents. PSGVFD received assets from the college in the late
70’s. These historical records can be found in the library.
Lewis Rosenberg says
As a longtime Explorer subscriber I join in the criticism of the tale of doom perpetuated by the “investigative report” gleefully predicting the demise of Paul Smiths College .
To find necessary two ‘clarifications’ of its headline strongly
suggests it was sensationalism that drove this article, rather
than reporting the mundane bureaucratic approval process the
College must go through, for its merger/acquisition with
Fedcap . Admittedly the Explorer article was “misleading” perhaps
warranting an investigation of the investigator.
George L says
There is nothing mundane about Fedcap’s proposed acquisition of the assets of Paul Smith’s: its land, buildings, and infrastructure. That is why multiple state, Federal, and accrediting agencies are looking at the proposal. Legally speaking, this is a rigorous process. And it should be.
This is business. Tell me, anyone, what are the terms of this acquisition? Why is it so great for PS?
Why the secrecy? Why all of the no-comments?
Why doesn’t the Board of Trustees explain the proposed deal to the public?
It’s embarrassing to see academics stoop to the level of leading a witch hunt and badmouthing the free and independent press for reporting on the cold hard realities facing this institution.
The Adirondack Explorer is not Paul Smith’s publicist. It’s not their job to write stories to attract prospective students or soothe the shattered nerves of faculty and staff. To suggest otherwise reveals a complete lack of understanding of how journalism works.
Furthermore, seems like Paul Smith’s stonewalled the AE when they asked for comment, thinking doing so would kill the story. Terrible strategy and a self-inflicted wound.
Now people are upset and reflexively attacking the AE for probing this secretive deal, which is what actual credible news organizations do (as opposed to being stenographers). What an embarrassing episode for Paul Smiths – especially those calling for Odato’s resignation, including once credible public figures.