NMC train could be heading for the Marianas Trench

The recent discussion by NMC officials with CNMI lawmaker Justo Quitugua (D-Saipan and chair of the House Committee on Education) regarding the move of the entire As Terlaje campus to the La Fiesta facility in San Rogue, and the projected cost of $6 million for renovation and $3 million for classroom equipment, clearly shows that the priorities of the NMC leadership, who are vested with making prudent policy decisions for the welfare and stability of the college and students, may not be established in proper order. Since the college has been now warned by both the Accrediting Commission for Community and Junior Colleges, as well as the Senior Commission for Schools and Colleges of the Western Association of Schools and Colleges over the past 60 days regarding financial instability and maintaining viability and sustainability of academic programs, e.g., baccalaureate program in elementary education, one might presume that the highest priority of the college leadership would be to “focus” on removing the institution from its financial dilemma and restoring accreditation with WASC, instead of putting forth efforts to establish “an aesthetic campus” while increasing the debt level of NMC in excess of $15 million, i.e., $2 million existing deficit; $4 million plus interest outstanding balance and the $9 million projected to be needed to allow the La Fiesta Mall to function as a campus. Removing NMC from financial instability and restoring accreditation will be crucial in terms of maintaining qualifications to receive and issue federal Pell grants for the students, as well as enabling the ones who matriculate for a two-year degree to transfer to an accredited four-year public or private institution of higher education located in the mainland.

If the college leadership places another $9 million of debt onto the existing outstanding balance of $4 million plus interest, and the $2 million deficit regarding annual budgets, then the overall amount that will be needed to be paid back will be about $15 million plus interest if the $9 million is borrowed. The total pay back with interest on a 20-year note (timeframe of 20 year payback is taken from the payback timeframe for the $4 million outstanding balance on La Fiesta) for $15 million will be nearly $26 million. And the annual payments that will be necessary to pay back this amount will be four times the $200,000 plus interest which NMC is currently obligated to pay back annually for the next 20 years. Where will the funds come from to pay back an annual obligation for the La Fiesta operational costs and outstanding loans that will be in the vicinity of $1.75 million a year? The NMC Board of Regents is obligated to give the island community answers to these questions since the college is a publicly supported institution of higher education.

The college is currently faced with the dilemma of not having the monetary resources to pay the monthly operational costs of $50,000 ($600,000 per annum), as well as the annual payment of $200,000 plus interest on the $4 million outstanding balance from the $7.5 million La Fiesta transaction made in 2003 and the NMC leadership is still talking about moving and needing more funds to accomplish their plans. It would be naïve to think that the WASC officials will not question the issue of the college incurring more debt and/or making plans when there aren’t any monetary resources in the college coffers.

If the college continues to accumulate more debt and remains unstable fiscally, this would no doubt prompt more pressure from WASC officials. It is highly probable that the college would either be placed on “probation”, or be compelled to “show cause” in terms of why WASC should allow the institution to continue being accredited subsequent to being on probation for more than two years. These guidelines are stipulated by the federal government and WASC must comply with adhering to them.

The other important issue that must be raised involves the Commonwealth Constitutional mandate stipulating the prior approval by the CNMI 14th Legislature of any additional debt that is incurred by NMC. Before the NMC BOR proceeds with any thinking and/ or planning regarding incurring any additional debt, it first must be evaluated and approved by the members of both the House and Senate of the 14th Legislature. To do anything otherwise flies in the face of what the Commonwealth Constitution says.

For the NMC leadership to move toward making a decision about incurring more debt without adhering to what the Commonwealth Constitution dictates and bringing it before lawmakers of the NMI, as well as the island community, might be problematic inasmuch as it is in defiance of the laws governing the CNMI.

The Institute of International Education conducted a study during the last quarter of 2003 and found that tightened visa procedures enacted after the 2001 terrorist attacks in New York have delayed the entry of many foreigners into the United States. Consequently, this has contributed to a foreign student enrollment increase of only 0.6 percent compared to 6.4 percent prior to 9/11. Because of the arduousness of obtaining visa clearance to attend institutions of higher education in the mainland, qualified foreign students are now attending institutions in England and Australia where enrollments for foreign students have increased and exceeded 30 percent over the past two years.

The loss in revenues to the U.S. national economy and colleges and universities from what the estimated 600,000 foreign students expend while pursuing undergraduate and graduate degrees is projected to fall from $12 billion to $9 billion annually.

It needs to be underscored that the existing foreign students enrolled at NMC will not be able to successfully transfer any and all of their academic credits and courses to “any” accredited public or private institution of higher education in the United States if the college loses its accreditation status with WASC. Although this situation may not be as severe as the “Saipan University” debacle where students lost their tuition money, as well as their privilege to pursue educational programs at SU, it is a very serious matter when foreign students are not able to pursue a four-year degree because the college they attended for an associate of arts or science degree is “not accredited” by a legitimate and recognized accreditation association approved by the U.S. Department of Education.

In 2002, the former NMC president said that the “relaxed” visa standards of the NMI, as well as an “attractive campus”, would draw foreign students to pursue degrees at NMC and “millions of dollars in tuition revenues” would be realized. Since the former president’s proclamation, there have only been five to ten additional qualified foreign students enrolled at NMC and the college is besieged with some serious financial turmoil. Because qualified foreign students are now flocking to renowned universities in England and Australia, it doesn’t appear that the lackluster numbers involving foreign students coming to the CNMI to study will increase by any drastic margins in the near or distant future.

The serious problem involving the financial instability of the college and maintaining accreditation status with WASC can be easily resolved with decisions that will effectively eliminate the debt level of NMC and allow it to commence with planning that will reflect “stabilization” and enable the college to move forward with progression, as opposed to digression.

Dr. Jack Angelo’s recent and prudent recommendation to sell the La Fiesta Mall and use the proceeds to remove the college from remaining entrenched in a financial quagmire should be taken under serious advisement by the NMC leadership. Should the leadership not heed to Dr. Angelo’s advice and make the decision to increase the deficit of the college to $15 million ($26 million with interest), then they should be prepared for the inevitable consequence of the college being placed in the predicament of filing Chapter 7 (bankruptcy) and possibly being asked to shutdown it’s operation and close the doors. It does not have to be this way and college leadership has the power to prevent this catastrophe from becoming a reality.

To go with the decision of incurring more debt amid the warnings that have been issued by WASC is essentially gambling with the future stability of higher education in the CNMI when the odds that the college will come out on top and be able to adequately sustain providing higher education for the present and future students of the island community, are not very favorable.

The destiny of the college is in the hands of the NMC BOR and should they not make the right decisions, then the NMC train will be destined for the Marianas Trench.

Dr. Jesus D. Camacho
Delano, California