At first glance it appears that Flagler College in St. Augustine, Fla., is awash in extravagance. Rooms inside the Spanish-style buildings are decorated with Tiffany stained-glass windows, marble floors, gold-leaf lights, and hand-laid Italian murals.
But behind the opulent surroundings, a philosophy of frugality prevails. One fax machine serves the whole administration, teachers have no tenure and are required to take on a heavier classload than in most colleges, and even supplies such as lightbulbs are hard to come by.
The penny-pinching has won Flagler national recognition as the most efficient small liberal arts college in the South. It also represents a dramatic example of how both public and private universities across the country are being forced to scale back as enrollment declines and operating costs increase.
"It's pretty clear that in higher education people are going to have to pay a lot closer attention to how efficiently they operate ... and reinvent how they do business," says John Hopkins, spokesman at Marquette University in Milwaukee, Wis.
Though most colleges aren't going to the same extremes of frugality as Flagler, the majority are paring down significantly. And like the downsizing in corporate America, collegiate downsizing is controversial. It raises tough questions about sacrificing academic quality in the pursuit of profitability. Efforts to weaken or eliminate tenure are currently sparking battles on a growing number of campuses. But that isn't slowing the trend.
Since 1990, Boston's Northeastern University has cut its budget by 26 percent, faculty by 17 percent, and administrative staff by 22 percent. Last January, Marquette cut $6.5 million by offering voluntary retirement, dismissing 15 employees, and abolishing vacant positions.
The cuts are driven, in part, is demographics: A declining pool of high school seniors over the past several years has meant colleges don't have as many students footing their bill. And though those numbers are expected to increase, the new students may require more aid and services.
"It will be a very different cohort of students," says David Warren, president of the National Association of Independent Colleges and Universities. "A far larger percent will have been born and raised in poverty, a larger percent will have remedial needs."
Flagler's thriftiness was born of necessity. In 1971 the three-year-old college had 160 students, a $1 million debt, and had been denied accreditation. The buildings, which railroad magnate Henry Flagler built as a grand hotel in 1888, needed to be restored. Flagler hired William Proctor to turn things around.
President Proctor began defining Flagler's mission in terms of the available and foreseeable resources. At the time, he was bucking the trend. Higher education through the 1940s, '50s, and '60s had seen enrollment balloon. As a result, colleges added programs and professors without thought to the future.
"That was a golden era and I don't think anybody thought it was going to end," Proctor says. "Colleges and universities developed habits of operation that were like someone on a spending binge." But by the '70s, signs indicated the heyday was over.
At Flagler, Proctor was able to instill an atmosphere of austerity without breaking long-standing traditions. Tenure was never given because he felt it would pressure teachers to publish and might put low priority on teaching. Thus, professors focus more on class time. Most teach 300 credit hours a semester, which translates to five courses with 20 students each. In other institutions, two to four courses are the norm.
Proctor has limited the number of staff - from janitors to secretaries - to two per each full-time faculty member, compared with about a 4-to-1 ratio at other colleges. Flagler also concentrates on majors that aren't too pricey - education, graphic art, and business administration, for example.
The initiatives have paid off. Flagler has 1,360 students and has spent $43 million in improvements. Tuition and room and board remain among the nation's lowest for a private college at under $9,000. Quality doesn't seem to have been sacrificed: US News and World Report lists Flagler among the top 20 percent for quality of small liberal arts colleges in the region.
Despite the prudent approach, faculty understand the philosophy, and turnover is minimal. Says history professor Tom Graham: "We know there's not going to be a lot of frills," explaining that when he asked to replace a lightbulb for his lamp, the maintenance crew told him it was not budgeted. Still, money exists for faculty development and some travel and "though we're certainly not flush with salaries, we've tried to stay a percentage point ahead of the inflation rate."
Mr. Graham says students get a good education. They see the emphasis on thriftiness in the number of course offerings and professors.
"Partly that's a function of the fact we're a small college," he says.