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Tuesday, May 28, 2024

Nido Qubein turns High Point University into a conqueror.

This is a story about dramatic growth at High Point University. If you’re tired of hearing about a university with a ubiquitous marketing effort, maybe just read the following quote from Tom Ross — and skip the rest of the story. He’s the former president of the UNC System, with 16 collegiate campuses and nearly 250,000 students. He also ran Davidson College, an elite private undergraduate
school with a $1.3 billion endowment.

“High Point is as remarkable of a turnaround story as one can find in higher education,” Ross says. “President Nido Qubein has done a remarkable job and surpassed what many doubters thought was possible. I can be included in that list of doubters. I didn’t see it happening.”

Now, for readers who want to hang in there, here’s an abbreviated version of how Qubein pulled off this unexpected growth story.

SOMETHING’S GOTTA CHANGE
In late 2004, Qubein was the incoming board chair at HPU, where he had earned a bachelor’s degree in 1970 after immigrating a few years earlier from Lebanon. His father died when he was 6, and his seamstress mother urged her five children to attend college in the U.S. He says he arrived at 17 with $50 and little else.

Within 25 years, he was topping $1 million a year from motivational speeches, books and tapes. The media business sales were seven times as lucrative as speechifying, he says. He had other business ties, and was a director of Truist, or predecessors BB&T and Southern National Bank, from 1990 through 2023.

So Qubein was taken aback when HPU board Chair Richard Budd, who led the search committee to replace the retiring president, asked him to take the job running the campus because they couldn’t find a suitable candidate. 

The HPU alum loved his Methodist-affiliated college, but he knew it was in trouble. It had about 1,400 students on a 91-acre campus; more than 20% left annually rather than complete a degree. Its fundraising totaled a few million dollars a year, and campus buildings required $120 million in deferred maintenance. It had colleges of business, liberal arts and education and an endowment of about $45 million.

The campus was split along city-maintained streets in a neighborhood of moderate to lower-income homes, about a mile north of downtown High Point. “You could live in High Point and not know the school was there,” says former Mayor Jay Wagner. “It was educating kids, but there was little interaction with the city.”

The turnaround challenge intrigued Qubein, who envisioned that a strong university could help revive High Point, which was overly dependent on stagnating furniture and textile industries. He started the job in January 2005. In his first year, he recalls struggling to attract 40 or 50 potential students on official visit days.

Today, HPU has an enrollment of about 5,960, including 623 graduate students, according to a Standard & Poor’s report. There are 14 schools with the first class of dental and law students enrolling this fall, followed by optometry next year. Qubein regularly ranks among the highest-paid U.S. university presidents, with total compensation of $2.1 million in 2022, according to HPU’s latest tax filing.

The campus now includes 128 buildings, with its streets owned and maintained by the university. Gates and wrought-iron fencing surround the campus, which has expanded to 500 acres after HPU bought more than 1,000 adjacent parcels.

Cost of attendance exceeds $62,000 a year, which requires sacrifice from N.C. families who could pay half as much to send a child to a UNC System campus. It’s $15,000 to $20,000 less than some private colleges considered comparable by HPU officials.

Yet, HPU received more than 18,000 applications last year for about 1,250 first-year slots. It isn’t  highly selective, with an acceptance rate of more than 75%. But average GPAs and SAT scores of incoming students have increased significantly to 3.6 and 1250, respectively, over the past decade. Criticism that HPU is a magnet for wealthy families stings Qubein, and the university has boosted its annual spending on scholarships from $31 million in 2017 to $85 million this year.

And admission visit days? Now, it’s common for 1,000 potential enrollees to show up.

FACULTY MATTERS
In academia, senior leadership comes and goes, while faculty tend to stick around. The average president lasts fewer than seven years, matching the length of a typical major capital campaign, ex-UNC chief Ross says. Professors with campus clout know they can wait out a short-term president.

Qubein, 75, says his HPU experience shows him nothing could have happened without strong faculty support.

Before accepting the job, he stipulated each of the 100 or so faculty members had to support his hiring. College professors tend to disagree about a lot and don’t usually want a CEO-type as president.

So he met with the HPU faculty. After an hour in which he shared his personal history and hopes, then answered questions, the entire group gave him a standing ovation. No dissenters emerged.

Daniel Erb

Faculty remain respectful of Qubein, says Daniel Erb, who left Duke University in 2011 to become dean of HPU’s School of Health Science, then became provost in 2021.

“Does everyone agree with what we do? No, 5% of faculty is going to be opposed to whatever you do,” Erb says. “But we’re not talking about cutting programs here, so faculty aren’t worried about that, but instead are focused on their classes and our students.”

Unlike most universities, High Point requires faculty members to show up at campus five days a week. “If you want to teach Tuesdays and Thursdays, that’s fine, but I tell them that’s a part-time job,” Qubein says.

The faculty respect authenticity and listening skills, the president says. “I always start with a yes. It doesn’t always end that way after we’ve done the study, but a lot of people start with a no. We’ve created an atmosphere for creativity around here.”

About 30% of HPU faculty have tenure, an academic tradition that Qubein dislikes. He views tenure as typically a 30-year promissory note that unfairly binds a university. “I’m all for security in your job, but I can’t have but so many with tenure.”

The balance of educators work on multiyear contracts or are on a tenure-track. Despite some criticism, HPU receives ample applications when it is hiring professors, he says.

Adds Erb, “We couldn’t have accomplished what we have here without the faculty being behind us. There’s no way.”

THE GAME OF LIFE
“How did you do it,” is the main question that Qubein says he has received from the 400 college presidents who have visited HPU to study its success.

It’s a mix of several factors, he answers, but a list-topper is a focus on helping students develop life skills that trump any single diploma.

“A college education isn’t a prize to be won or a certificate to be completed,” says Kerr Ramsay, senior vice president of enrollment. “It is a process of growth and transformation that, if done right, can impact graduates for the rest of their lives. That’s what families are responding to. That’s what’s led to our growth.”

HPU caught Ramsay’s eye in 2011 when he was a student recruiter for Emory University’s divinity school. “The High Point students — and I’m talking about every one of them — were the only ones who looked me in the eye, shook my hand firmly, gave me their resume with confidence and had conversations that stood out,” he recalls. “It was a wow moment for me. I realized something different was happening here.” Ramsay was hired at HPU in 2013 and took his current post in 2022.

Netflix co-founder Marc Randolph with Apple co-founder Steve Wozniak

Each freshman is assigned to a career coach, who helps direct students to courses and internship opportunities. The program is led by Andy Bills, who led a Triad marketing agency and worked with the Qubein-led Great Harvest Bread retail firm before joining HPU in 2005. He’s now a senior vice president who oversees career development, student success and retention.

Qubein is especially proud of building alliances with a rotating group of about 50 corporate executives. They visit campus periodically to lecture and help students learn about the world in a way that Qubein calls unusual in U.S. higher education. Prominent members include Apple cofounder Steve Wozniak; Dallas Mavericks CEO Cynt Marshall; and Domino’s CEO Russell Weiner. North Carolina executives who’ve been HPU’s advisers include former Belk CEO Tim Belk, retired Truist CEO Kelly King and Greensboro media executive Bonnie McElveen-Hunter.

“We want to be a school that prepares students to be a person of influence
and relevance,” Qubein says. “I can’t tell you how brilliantly I think we are doing that.”

HEALTHY STRATEGY
Growth comes easier if one picks the right industry. HPU invests heavily to train students for careers in healthcare, a sector that makes up about a fifth of the U.S. economy. As a former CEO consultant, Qubein says he pressed them to look out 10 years and understand societal and geopolitical changes. A similar process led HPU’s board to approve the healthcare focus, he says.

Erb says he was confident in leaving Duke because of Qubein’s assurance that he had connections with wealthy donors who would support the College of Health Science, followed by programs for physician assistants, physical therapists and pharmacists. Before that, HPUs health-related offerings were limited to undergraduate exercise science and athletic training programs.

Qubein and his team made it happen by raising high seven-figure or eight-figure gifts from a few dozen wealthy individuals and families.

Doug Witcher

HPU’s pharmacy school is named after High Point chemical-company owner Fred Wilson. The Congdons, owner of giant trucker Old Dominion Freight Line in Thomasville, have their name on the College of Health & Sciences. Wisconsin’s Wanek family, which owns the Ashley Furniture chain, sponsored the School of Natural Sciences, among many HPU gifts. In March, High Point insurance executive Doug Witcher gave $20 million; the School of Human and Behavioral Sciences bears his name. Qubein himself is among the school’s biggest donors.

“Being a member of the team who raised over $400 million since 2015 has been a privilege,” former HPU development director Chris Dudley said last year when he left HPU to join the Raleigh-based BrightDot consulting firm. In March, HPU announced donations of $230 million from six families, including the Congdons and Witchers.

Erb says he chose High Point over jobs at higher-ranked universities. “You could try innovative things here as long as you were thoughtful,” he says. “And I thought I could help more here.”

Mark Martin

Former UNC leader Ross says he doubted HPU’s expansion in pharmacy would work. The statewide system studied adding a pharmacy school, but nixed it because perceived insufficient demand. He also questions if North Carolina needs another law school.

Pharmacy has been a success for HPU since 2016, Erb says. Qubein says he’s excited about the law school’s prospects, led by Mark Martin, former chief justice of the N.C. Supreme Court.

HPU’s plan for a third N.C. dental school has faced considerable opposition from the state’s dental community, Qubein says. The program received 1,400 applications for 60 slots in its first cohort this fall.


BUSINESS MATTERS
Qubein makes no pretense that he is a business guy and not an academic. Running a private university is vastly different than being a chancellor of a public campus beholden to boards appointed by politicians, he says.

Operating with solid margins — namely revenues over expenses — has been essential for High Point’s success, and it’s a source of great pride for him. Fast-growing businesses, he notes, are not nearly as rare as private universities that have soared in size and impact.

HPU operating revenue increased nearly 40% between 2020 and 2023, to $383 million. That doesn’t include donations. It had a $44 million operating surplus in its 2023 fiscal year, and $55 million a year earlier, according to Standard & Poor’s. That represented margins of 13% and 18% respectively. The national average for private colleges is less than 5%. Many operate at a deficit, using reserves to pay bills.

“Because of the continued growth in enrollment, as well as management’s conservative budgeting practices, we expect [HPU’s] operating results will remain robust,” the credit rating agency noted.

As of Dec. 31, HPU’s balance sheet showed $1 billion in assets and $83 million in debt, Qubein says. It had about $80 million in cash and liquid assets as of March, so it could extinguish its debt tomorrow, Qubein says. “But I’m paying a very low interest rate, so it would be pretty stupid.”

No wonder, he says, that rumors over the years that HPU held $500 million of debt or was a “house of cards” are now debunked. “Nobody is saying that anymore.”

What about the endowment, which totaled $151.5 million as of May 2023, according to S&P? Several N.C. colleges have larger funds.

Qubein answers that the endowment has been a low priority for much of his tenure. In 2005, he concluded that he couldn’t attract students without first-rate dorms, classrooms, labs, restaurants and a good recreation center. So he focused on raising money from those
who share his goals for HPU, then poured every cent into structures and programs.

The resulting campus evokes comparisons to Disney theme parks for its cleanliness and greenery. In a state full of beautiful campuses, HPU ranks high. No one would have said that in 2005, say Wagner, the former High Point mayor.

“The endowment is getting more attention, and it’s one of the biggest things on our radar,” says HPU board Chair Chris Henson, the former head of banking and insurance at Truist Financial, and president of predecessor BB&T. “But things have their priority, and we’re not relying on a large endowment for our future.”

VALUE PROPOSITION
A key aspect of HPU’s story is its emphasis on “God/Family/Country” values that rarely get top billing at elite U.S. universities. Qubein cites a mix of beliefs and gestures: He favors a universal belief in God; dozens of American flags are displayed across campus; HPU athletes are required to place a hand on their heart during the playing
of the national anthem.

Princeton Review, which rates colleges, lists HPU’s student body as among the most conservative in the nation. But High Point has intentionally avoided the path of Liberty University, the Lynchburg, Virginia, institution that grew rapidly in recent decades by appealing to evangelical Christian students and investing in online education. Liberty has more than 15,000 students on campus and nearly 100,000 take online classes. It has an endowment of $2 billion.

Qubein bristles at the comparison. He says he supports diversity and inclusion efforts, including welcoming LGBTQ students and faculty. He doesn’t define what constitutes a family. About 24% of students are diverse. HPU is focused on character and career-building, not gender and racial differences, he notes. To attract Jewish students, he started a Hillel program. Now, he says about 7% of the student body call themselves Jewish.

“I don’t define God for people, and we have Muslims, Jews, Christians, people with no religion,” he says. “What matters is we believe in God. We don’t push it down your throat, but we want you to know where we stand.”

Qubein wants “actionists” on campus, not “activists,” whom he defines as noisemakers who rarely deliver positive results.

It is a timely strategy. “We’re seeing across the country in higher education and corporations that people are attracted to organizations that offer a clarity on what they believe, even if they don’t agree 100%,” says Ramsay, the enrollment leader. “We don’t say we are a great place for everybody, and people appreciate that clarity.”

The president says he wants everyone to share his love for the USA, reflecting his personal experience. “We have enormous blemishes and many inequalities that we can agree on. But my God, the available opportunities for success can be loaded up by the truckload.”


THE REST OF THE STORY
Following Qubein’s act will be a challenge. He isn’t saying how long he will stick around. Estimates from people close to the president range from the end of this year, after conclusion of HPU’s 100th anniversary events, to completing his current contract, which ends in 2029.

It won’t be for a lack of energy or mental agility, people familiar with Qubein say. He wakes up around 5 a.m. for exercise and reading emails and the news, gets to campus by 7 a.m., then fills his days with meetings and activities such as his weekly PBS NC interview show. He attends many HPU athletic contests, sitting close enough at basketball games to badger refs over “bad calls.” He has led many civic efforts, including efforts to revitalize center-city High Point with a ballpark and kids’ museum thas is named after Qubein and his wife, Mariana.

The Qubeins spend considerable time at their condo in Palm Beach, Florida’s Worth Avenue district. That’s where the money is, he says, referring to North Carolinians and others with second homes in the Sunshine State. He also enjoys walking on the beach.

Qubein emphasizes that a strong team runs daily operations and “two or three” senior leaders are highly capable successors. HPU’s board has many veteran business leaders with succession experience.

“Nido has been a catalyst, but he’s been mindful of bringing in a deep bench of talented people,” says Henson. “If we had an emergency tomorrow, we’ve got an answer for that. But if his health holds up, we’re not there yet.”

Henson is a 1983 graduate raised by a single mom who was a seamstress. He attended HPU on a federal grant and private donations arranged by the school then rose to be BB&T’s second-highest paid executive. He thinks sustaining growth will be less challenging than what Qubein faced in 2005. “People say it’s an unbelievable campus, but they miss the focus on values, generosity and personal initiative,” he says. “The vision to build a university that creates unique value has been the driver.”

EPILOGUE
This story started with a comment from Tom Ross, a progressive. Let’s close with a word from a conservative, State Treasurer Dale Folwell: “I’ve listened to President Qubein for two decades and never detected a gap between who he is and how he leads. In such an upside world, young minds gravitate toward that stability.” ■

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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