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Dowling College scraping by day-to-day, official says

A deal that would have helped debt-ridden Dowling College apparently fell through and is threatening the school's existence. The liberal arts school is rushing to find a new academic and investment partner. (Credit: Ed Betz)

Dowling College is rushing to find an academic and investment partner after a deal to help the debt-ridden liberal arts school stalled, threatening both the school’s existence and the Class of 2016’s commencement ceremony, a key senator said Monday.

A flurry of activity over the last four days averted a crisis — but only for the near term, said state Sen. Kenneth LaValle (R-Port Jefferson), chairman of the Senate Higher Education Committee.

“They are alive for another day,” LaValle said in an interview in Albany. “Right now, it’s a day-to-day basis.”

A cash infusion allowed the private college to get through the end of the academic year and Saturday morning’s graduation program, some said, although Dowling President Albert F. Inserra, in a telephone interview Monday evening, said “no infusion” of cash was needed. He did not elaborate.

“We are vigorously pursuing all opportunities to keep Dowling Dowling,” he said.

Dowling, a private college founded in 1955, has its main campus in Oakdale and a Brookhaven campus in Shirley.

“We worked Friday to make sure they could have graduation,” LaValle said, calling it a “roller coaster” that didn’t conclude until that evening. “We were talking about hours. Quite honestly, Friday night I thought it was over.”

LaValle said the college is in talks with “interested parties,” whom he declined to name, after an investment arrangement with London-based Global University Systems appeared to hit a dead end.

The identity of that potential affiliation had been kept confidential since Dowling announced in mid-March that it had reached a deal with an academic partner to help keep it afloat.

Earlier, in a brief interview at the Oakdale campus, Inserra would not answer other questions and referred a Newsday reporter to a college spokesman, who acknowledged that Dowling is looking for investment help.

Roger Tilles, Long Island’s representative on the Board of Regents, the state education policy-making body, also said Dowling needed an “emergency infusion of cash” to get through the last week and noted that it is an estimated $54 million in debt.

Calls Monday to the state Department of Education and the Middle States Commission on Higher Education were not returned. Middle States is a nongovernmental agency that accredits Dowling and other institutions of higher learning in certain areas, including New York.

Three employees who were leaving the Oakdale campus said their workdays Monday were normal and they planned to return Tuesday. They would not give their names.

Joseph Olivero, 19, of Shirley, who is majoring in criminal justice, came onto campus to return a book, but the bookstore was closed. He said there has been no communication from the college about any changes in its future, and he wants to continue his studies and graduate from Dowling.

“The professors here are awesome and I really like my classes,” said Olivero, whose brother attends Dowling and is on the lacrosse team. “I like the school. It’s a nice atmosphere.”

Dowling has struggled for years with financial challenges, changes in leadership and plummeting enrollment. It had 1,784 undergraduate and 670 graduate students in 2015, according to a Middle States report — a drop of nearly 50 percent from its 4,500 students in 2009.

LaValle said one hang-up with the affiliation with Global University Systems, an education management company that runs institutions around the world, was the establishment of a Dowling branch in New York City, which involves a lengthy process. That led the London-based company to “walk away,” he said.

Inserra, in the later interview, said the partnership is “still percolating.” Another source said it wasn’t necessarily dead yet.

“This has been an accident that has been in the making for some time,” LaValle said of the overall situation, adding that “keeping the doors open” is “critically important.”

Tilles said it is possible that another university could be interested in taking over the campus and running the school, if that other school would not have to assume Dowling’s debt.

“The creditors, the bondholders would have to make that deal,” Tilles said. “But they are owed $54 million and there is no money.”

When colleges announce they will close — as did the for-profit Briarcliffe College in Patchogue in December — they are required by Middle States and federal regulations to provide a “teach-out plan” that allows equitable treatment for students to complete their education, and to include any teach-out agreements that the institution has entered into or intends to enter into with another institution.

Dowling has been on warning regarding its accreditation since June 2014, when a Middle States report showed the school had failed to comply with three major standards. The college remained accredited while on warning.

Dowling had been required to submit to Middle States audited financial statements for the most recent fiscal year, budget projections through the 2019 fiscal year, a fundraising campaign and a debt repayment plan. The college also had to provide Middle States with a “teach-out” plan, describing how students would be accommodated if the commission withdrew its accreditation.

Middle States was scheduled to consider Dowling’s status at the commission’s June meeting.

Inserra, a former superintendent of the Port Washington school district, was named the college’s president in August 2014 — its seventh leader since 2005. Inserra had been chairman of Dowling’s doctoral program in educational administration, leadership and technology.

The current cost to attend Dowling — including tuition, room and board and fees — ranged from $40,000 to $44,000 per academic year based on a 30-credit undergraduate course load, according to the college’s website.

The school has been teetering on a financial precipice for years.

In November 2014, the faculty union approved $4.7 million in contract givebacks to help close the school’s 2014-15 budget gap.

That same month, Dowling agreed to pay more than $400,000 to Robert Gaffney, the former Suffolk County executive who served as the college’s president from 2006 to 2010, in a settlement of his lawsuit against the Oakdale school. Gaffney’s lawsuit, filed in 2010, alleged that he was owed about $375,000, including interest.

According to a Standard & Poor’s Ratings Services report in fall 2014, Dowling depended on student tuition and fees for more than 95 percent of the college’s budget, which was $41.9 million at the time.

The Standard & Poor’s report dropped Dowling’s long-term debt rating from a B to a B-minus, citing high debt, the dramatic drop in enrollment and unstable leadership. At that point, the school had $54.9 million in debt and a $2.1 million endowment, according to the S&P report.

Moody’s Investor Services, in March 2014, said the school was “likely in or very near default” on bonds issued by the industrial development agencies of Suffolk County and the Town of Brookhaven.

When it was founded in the mid-1950s, Dowling was an expansion of Adelphi University and it became Suffolk County’s first four-year college. It was established as an independent institution in 1968, and named after planner Robert Dowling, then its main benefactor.

With Kathleen Kerr

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