Burlington College — A Tiny College That Bought Too Much Land

Summary

Burlington College, a small alternative college in Burlington, Vermont, founded in 1972, closed on May 27, 2016, brought down by debt it took on to buy a lakefront campus far larger than its few hundred students could ever support. The board of trustees, citing the "crushing weight of debt," voted to shut the college's programs, and with its accreditor declining to renew accreditation, Burlington graduated its final class — 55 students — and ceased to exist after 44 years.

The college had always been tiny and unconventional. It began as the Vermont Institute of Community Involvement, an experiment for adult learners and veterans that, in its early days, met in its founder's living room. Even at its largest it enrolled only around 200 students, and by the fall of 2015 that had fallen to roughly 123 full-time students. It had no endowment cushion and no margin; it was, in the language of higher-education finance, a college with almost nothing behind its tuition.

The decisive event was a real-estate purchase it could not afford. In 2010, under then-president Jane O'Meara Sanders, Burlington bought a roughly 32-acre lakefront property on North Avenue — the former headquarters of the Roman Catholic Diocese of Burlington — for about $10 million, financing it with bank loans and a note to the Diocese. The acquisition was premised on donations that had been pledged but not yet collected and on enrollment growth that was projected but never arrived. The pledged gifts came up short, the new students did not materialize, and a college of a couple hundred students found itself carrying roughly $11 million in debt against a campus it had bought for a much larger institution it never became.

What followed was a slow strangulation. Burlington sold off portions of the land to pay down the debt and reduced the balance over several years, but the financial damage and the loss of confidence had been done; its accreditor placed it on probation in 2014 over financial resources, and in 2016, when a bank declined to renew a $1 million line of credit, the college could not go on. These are the facts of a financial mechanism — an overlarge purchase financed against money that did not arrive — and they are stated here without reference to the political controversy that later attached to them.

Timeline

The College in the Living Room

Burlington College was, from the start, a deliberately small and unorthodox thing. It opened in 1972 as the Vermont Institute of Community Involvement, founded to serve adult learners and military veterans — students whom the conventional college calendar and campus were not built for — and in its earliest incarnation it reportedly held classes in the founder's living room. It grew into a recognized, regionally accredited liberal-arts college with a progressive, individualized bent, but it never grew large. Even at its high-water mark around 2007 it enrolled only about 200 students.

That smallness was the college's character and also its vulnerability. A two-hundred-student college operates on a knife's edge: its tuition revenue is modest, its fixed costs are not proportionally smaller, and it has essentially no endowment to draw on when a year goes badly. Burlington had no financial cushion of any consequence. For decades that fragility was simply the cost of being the kind of intimate, mission-driven institution Burlington was — sustainable as long as it lived within its narrow means. The fatal error was a decision to stop doing so.

The Lakefront Bet

In 2010, the college made a wager wildly out of scale with its size. Under then-president Jane O'Meara Sanders, Burlington purchased a roughly 32-acre lakefront property on North Avenue — the former headquarters of the Roman Catholic Diocese of Burlington, on the shore of Lake Champlain — for about $10 million. The purchase was financed with bank loans and a note owed to the Diocese, and its viability rested on two assumptions: that donations which had been pledged would be collected, and that the spacious new campus would drive a substantial increase in enrollment over the following years.

Neither assumption held. The pledged donations came in well short of what had been counted on, and the enrollment growth the larger campus was supposed to attract did not materialize; a college of roughly two hundred students did not become a much larger one. Burlington was left holding approximately $11 million in debt against a property it had bought as if it were a far bigger institution. The deal would later become the subject of a federal inquiry — examining how the loan was obtained and whether the size of pledged donations had been overstated — an inquiry that was closed in 2018 without charges, and that is noted here only as a fact of the record. The relevant point for this dossier is the financial mechanism, independent of any controversy: a tiny college committed to debt service it could only meet if money it did not yet have arrived, and it did not arrive.

The Five Factors

Aftermath

For the students, the closure was handled better than the abrupt collapses of the same era. Burlington had lined up transfer agreements with several Vermont colleges before it shut, so the roughly 70 students still mid-degree, and the incoming class that had paid deposits for the fall, were given concrete options to continue elsewhere — some institutions agreeing to honor Burlington's tuition rates. The final class of 55 graduated on schedule. Faculty and staff at a college of that size were few, but they lost their jobs all the same.

The lakefront property — the thing that both defined the college's ambition and destroyed it — passed to a local developer who acquired it from the bank for housing and park use, so the land that Burlington could not afford became something the city could. A federal investigation into the 2010 financing was opened and then closed in 2018 without charges; it drew national attention because of who had been president at the time, but the underlying institutional story is simpler and more universal than the politics that surrounded it. A small, idealistic college reached beyond its means for a campus it hoped would let it grow, the growth never came, and the reach became the fall.

Lessons

References

• UPDATED: Burlington College to Close as Result of 'Crushing' Debt VTDigger
• Burlington College Closing Due to Financial Woes Vermont Public
• Burlington College to Shut Down May 27 Vermont Business Magazine
• Burlington College Wikipedia