Dowling College -- tucked away on Suffolk County's South Shore -- faces a fiscal storm stemming from steep enrollment losses, millions of dollars of debt, a small endowment and a poor borrowing rating, records and interviews with school officials and educational experts show.
The private liberal arts school, whose picturesque main campus is in Oakdale on the banks of the Connetquot River, ran a budget deficit of $977,000 in 2011 and is almost $60 million in debt, school officials said.
Last February, Moody's Investors Service downgraded $14.1 million of Dowling's already junk-rated bonds. Almost $10 million of the high-risk bonds -- issued by the Suffolk County and Brookhaven industrial development agencies -- were for a 289-bed residence facility that stood half-empty during the last school year.
Dowling president Jeremy Brown, who took over a little more than a year ago, says he's confident he can put the college back on course.
"I knew it was a turnaround situation and I love a challenge," said Brown, the former president of Edinboro University in Pennsylvania. "Finances have been tough. We have a good budget plan."
The key culprit is a steadily declining enrollment -- fed by a turbulent economy, decades of administrative turmoil and failing academic programs -- that is at its lowest level in more than 20 years, officials said.
Fall 2011 state statistics show Dowling had a total of 4,416 students -- 782 fewer than in 2010. The last time Dowling recorded lower enrollment was in 1989, according to state figures.
College spokeswoman Heather Shivokevich said five additional students were expected for fall 2012.
Despite the state figures, Dowling's website states enrollment is more than 6,300 students. When questioned about what is on the website, Dowling added small type saying the 6,300 figure is from 2008.
Once affiliated with then-Adelphi College, Dowling, located on the grounds of the former Vanderbilt Idle Hour estate, became an independent college in 1968 with schools of business, education, arts and science, and aviation.
Dowling officials said they have recently raised admission standards but would not be specific. The college still accepts close to 80 percent of all applicants and does not require SAT or ACT tests, two measures of student aptitude.
Accreditor asks for report
Dowling's troubles have not gone unnoticed by the Middle States Commission on Higher Education, which accredits colleges.
The Middle States website says in 2010 Dowling was asked for a report documenting its progress toward achieving fiscal stability, an enrollment management plan and adequate faculty staffing.
Such reports, the website says, are required when: "issues are more complex or more numerous; or issues require a substantive detailed report."
"An issue or issues" must have spurred concerns about Dowling, said Middle States spokesman Richard Pokress. Requests for such reports are not unusual, Pokress said. "Decreasing enrollments would have an impact on institutions' finances," Pokress said.
Shivokevich said she didn't know why the report was requested.
Dowling's accreditation was reaffirmed in 2008 and Middle States will visit in 2013-14 to decide whether to renew its current status, Pokress said.
Compounding the fiscal woes is that Dowling has a $1.8 million endowment, the value of the school's investments, which is often used to fund operating or capital expenditures. By contrast, St. Joseph's College in Patchogue -- a Dowling competitor -- has a $46 million endowment.
"It's one of the things we have on our radar screen to improve," Brown said.
With a small endowment, "You are basically living on tuition revenue," said Jane Wellman, executive director of the National Association of System Heads, a group of chief executives of public higher education systems. "They're in a very tippy spot."
Dowling has repeatedly laid off staff. And this spring, the faculty union agreed to a 5 percent pay cut, wage deferrals and an end to the school's pension contributions.
Michael Shapiro, the retiring faculty union president, said pay cuts were the right thing to do. "Together, the faculty, administration and staff eventually will emerge from these tough times," Shapiro said.
Getting Dowling back on track could be difficult, experts said. John Nelson, Moody's managing director for higher education, says dwindling enrollment has meant a loss of crucial tuition revenue. For the 2012-13 academic year, the college's undergraduate tuition cost is $25,324.
"Dowling is in a little more stress situation than most" private colleges, Nelson says, noting its endowment is "a financial challenge to be sure."
Richard Ekman, president of the Council of Independent Colleges in Washington, D.C., says one of the obstacles Dowling faces is its competition with other Long Island schools such as Stony Brook University, Adelphi, Hofstra University and St. Joseph's.
Education school hit
Dowling's education school -- Brown calls it the college's "hallmark program" -- has seen an enrollment decline.
The school -- especially its graduate program -- has lost 800 to 1,000 students over the past five to six years.
"The demand [for teachers] on Long Island declined dramatically" over the past few years, said Scott Rudolph, past chairman of the board of trustees and currently a board member. "That's why you see a decline in Dowling, because of the education" school.
Rudolph said enrollment losses in the education school coincided with the recession.
As schools began saving money, fewer classroom jobs became available, Rudolph said. Some would-be teachers chose other careers or decided not to pursue graduate degrees because of the costs. And, Rudolph said, some businesses stopped paying employees to earn degrees.
Rudolph said the education school cannot fully recover its losses and that trustees weren't vigilant enough.
"We didn't look forward," he said. "It's been that way for some time and we're going to work our way out. As a board, we waited a little too long to react."
Brown said the education school has benefited the region. "There are more than 5,000 Dowling alumni working in public education on Long Island," he said.
Issue with online program
Over the decades, a lack of foresight and a reluctance to deal with details ultimately affected two other academic programs and led to enrollment problems in one.
The Dowling Institute, which offers courses online and at various corporate offices in New York and other states, had to cut back its offerings several years ago after a report ordered by then-president Robert Gaffney, the former Suffolk County executive. The report found no record of the institute receiving proper out-of-state authorizations to operate certain courses and that "in the past, DI had to abandon its programs in New Jersey because of the lack of proper authorization."
Brown said he believes the institute's problems were resolved before he arrived.
Another academic initiative, Dowling aviation school's much-trumpeted National Aviation and Transportation Center, adjacent to Brookhaven Calabro Airport in Shirley, is now a shadow of what it was meant to be.
The brainchild of then-president Victor Meskill, the Brookhaven campus and aviation/transportation center, which cost about $125 million to build, have lost millions and failed to attract the thousands of students Meskill had predicted would enroll.
Meskill was forced out in October 1999 and his successor, Albert Donor, began trying to limit the financial damage at the aviation center.
Later, a curriculum analysis done for Gaffney indicated an aviation school program for students from India, which included flight training, was a drain on revenue. Eventually, the Indian students stopped enrolling in the aviation school.
The college converted a hangar into classrooms and after Rudolph became president in 2010, he sold the planes the school had bought and outsourced the flight training program. The former aviation center is now a school with an enrollment of 238 students offering aviation and aerospace degrees.
"I decided we didn't want to be in the flying business," Rudolph said. "We wanted education to be in educational programs."
Dowling has had four presidents in the past six years, which has contributed to a state of constant upheaval and administrative change, sources familiar with the college said.
The turnover has led to firings and hirings of key staff, replacement of academic personnel and a lack of continuity in planning that has filtered down to academic programs such as the education school, sources said.
Gaffney, one of Dowling's past presidents, is suing the college in State Supreme Court in Riverhead. Gaffney said he is owed about $375,000, including interest.
Gaffney left Dowling on May 28, 2010, months after then-board of trustees chairman Rudolph devised a plan, later approved, that then-trustee Matthew Crosson said in a 2009 letter would curtail the power of the presidency and make it easier to fire the person who held that office.
Crosson wrote that Rudolph had offered to donate $10 million to Dowling if the trustees agreed to his plan. Crosson, the former head of the Long Island Association, died in December 2010.
Gaffney's attorney, Anton Borovina of Hauppauge, said Rudolph's plan to change the school's governing structure was an attempt "to usurp power" and that it was aimed at Gaffney.
Attorney Steven Pinks of Hauppauge, who represents Dowling, said the school is countersuing Gaffney and that it stopped paying him because his administration repaid some of the school's debt with money intended for capital expenses and because he led the trustees to believe enrollment was better than it was.
Gaffney would not comment except to say: "If there was no Dowling College, Suffolk County would have to invent it. While not Yale, it's just as important for a lot of people who, except for Dowling, wouldn't have an education."
When Gaffney left, the trustees named Rudolph interim president.
Rudolph had no college degree but attended Dowling for a while. He is the former chief executive of the Ronkonkoma-based NBTY Inc., a large nutritional supplements manufacturer, and led the search that resulted in Brown's hiring.
In 2011, Rudolph arranged a $2 million credit line for Dowling but said it has not been used and that Dowling will repay him if it does use it.
Rudolph's generosity to Dowling began years ago. About 12 years ago, the school named its Oakdale campus for him following a $1 million donation.
Despite Dowling's woes, officials, former students and experts offered hope.
Brown is optimistic about the future and says Dowling will not close. "If we're here in three years, we'll be here in five years," Brown said.
"I've seen very few schools close," said Ekman of the Council of Independent Colleges. "Colleges are pretty adaptable. They can change their programs; they can take new initiatives."
Dowling officials are now trying to acquaint more high school students in the metropolitan area with the school's offerings. Currently, most students come from Nassau and Suffolk counties.
Shivokevich said Brown has traveled to South Korea, China and Taiwan and has attracted about a dozen new international students.
And some alumni are rooting for their alma mater.
Dominic Guida, 2012 class president, graduated with a bachelor's degree in political science and said he will continue to support the school in the future.
"Everything's on the rise at Dowling," Guida said.
Said Nelson of Moody's: "For a small college, the president and the senior leadership -- these are absolutely critical positions and they can make all the difference in the world. They have a president now that has previous extensive experience in higher education."
DOWLING COLLEGE FACTS
HISTORY: A private, nonprofit college founded in 1955 as part of Adelphi College's outreach to Suffolk County. It severed ties with Adelphi in 1968 and was renamed after its chief benefactor, Robert Dowling, a noted city planner and aviator.
PROGRAMS OF STUDY: Bachelor of arts, science, and business administration degrees as well as various master's degrees, a doctorate in education and advanced certificates in education and business administration.
STUDENTS: Most are residents of Nassau and Suffolk
FULL-TIME UNDERGRAD TUITION, 2012-13:
Dowling College -- $25,324
Hofstra University -- $34,900
Adelphi University -- $27,870
St. Joseph College -- $19,500
LIU Post -- $31,202
DOWLING COLLEGE PRESIDENT MAKES CHANGES
Since Jeremy Brown became Dowling College president, he has made several changes to the school's academic offerings in both its undergraduate and graduate programs.
For the 2012-2013 academic year, the school has added new bachelor's degree programs in criminal justice management, sociology and teaching English to speakers of other languages.
In addition, it has launched a new doctoral degree in educational administration with a concentration in health care and online master's degree programs in sports management and educational technology leadership.
The college also recently began a marketing campaign and appointed Suzanne Johnson, a Dowling faculty member for more than two decades, to the newly created position of dean of the college.
The dean will oversee the college's four schools: arts and sciences, aviation, business, and education.
Brown took over the college's top post in June 2011.