This Week in College Viability: Recent Episodes
Gary Stocker
Imagine your college student calls home in a panic. Their college just announced it is about to close - for good.
How do you avoid this story happening to you?
Many private colleges have recently closed and it is likely many more will close.
Our College Viability App shows which ones are more likely to do so. Don't let your student choose a financially unhealthy college and lose lost credits, lost time and lost money if it closes. We have done all the work to let you compare the financial health of these colleges and choose one that will have the resources to provide your student with a solid education.
As a former college administrator, I have seen first-hand the financial challenges that too many private colleges face and have chosen not to share with you.
The College Viability App enables students, parents, leaders and others to compare the changes in a private colleges’ finances, enrollment, and outcomes over a recent period of 6 years.
For families this information lets them make more informed decisions about their college choice -- limiting the risk choosing a one whose financial results suggest viability concerns in the coming months and years.
For higher education leaders, the App provides comparative data about competitors and potential merger or alliance partners.
Here is a YouTube link showing how to use the College Viability App. https://bit.ly/3jGXA9t
Here is the full College Viability YouTube channel. See if a college you are considering is reviewed for financial health and viability. https://bit.ly/3DLq7mr
If you want to get updates to your inbox, go to https://www.collegeviability.com/institute-lead-magnetj5cyzcmf
At CollegeViability.com, we have also developed a curated site about private colleges and higher education. It serves as a single source for timely news about the challenges of both.
My name is Gary Stocker, and we continue today on our journey to inform college students and their families and faculty and staff and many others about what is really going on inside higher education. Of course, the focus is on college finances and viability, but we also try to shine the light. on the many transparency issues or lack of transparency from college leaders for both public and private colleges. Going to start off today with an article from New York Times Magazine.Show note links:Tulane featured in New York Times Magazine article about declining male college enrollmentBy KASEY BUBNASH at Nola.com 9-12----‘There Was Definitely a Thumb on the Scale to Get Boys’Susan Dominus from the NYT----Some universities’ response to budget woes: Making faculty teach more coursesJON MARCUS APR 2021 (Hechinger Report)----U.S. News’ Rankings Not the ‘Behemoth’ Perceived 9-13 Jessica Blake----Ron Lieber NYT “The Price You Pay for College” Link to online course on how to get more merit aid.----Wartburg College to reduce tuition by 45%, boost aid for students The WCF Courier----More belt-tightening ahead for UP (Univ of Portland)The Beacon ( student site) by Riley Martinez
I spend a lot of time espousing the weaknesses of colleges and justifiably so. But today I wanna share something I published about a year ago. It is my College Viability Manifesto. From my mind, the value of a college education is without any question desirable. Is it always ideal? Is it always perfect? No, but that's not the question. It is desirable. And I speak from experience as a first generation college student from a large family. I put my strong beliefs about that college education for me and for you, along with some important considerations and qualifications into what is the college viability manifesto. Listen and watch the podcast to see the 10 items and how to consider them as you choose and evaluate colleges.
Through all of the silly season admissions announcements, let’s remember to ask: “Who is the fiduciary - someone looking out for the best interests for students, parents, faculty, and the community?" It is definitely not college leaders and boards. Tune into our regular TWICV podcasts as we work to increase financial transparency in higher education. For students and parents, We’ll give you the perspective you need to make the most informed decisions about college you are considering. For faculty, staff, and other stakeholders, come to College Viability to get the guidance and data you need to engage in transparent conversations with your college leaders.
Here is a quick summary of one of the stories discussed in this podcast.As I read this, I realized the folks at Lakeland use a lot of big words for a university that can’t even graduate 50% of its students: AFTER 6 YEARS! Admissions Yield is down 27 points, tuition and fees down $4MThe story uses words like: visionary initiative, groundbreaking partnership, transformative alliances, and high-quality higher education for our community. I would humbly suggest they start being transformative by graduating more of the students they already have. This is yet another example in the endless efforts by colleges to win via PR. While it is likely they will have some number of students complete this BS at a Blackhawk Technical Colleges, it is almost certain that Lakeland and the other participating colleges will drive anything close to materially significant new net revenue. I need to come up with a catch phrase to describe this business by PR model.Enrollment does not pay the bills, net collected tuition and fees do.Here are the links to the stories referenced in this podcast.WVU must involve faculty when making academic cuts, AAUP saysLakeland to offer bachelor’s degrees at Blackhawk Technical CollegeAmericans Are Losing Faith in the Value of College. Whose Fault Is That?Growing numbers | SIU posts 2.3% enrollment increaseLes O'Dell from The Southern IllinoisianWebster University sued for failing to pay rent at downtown St. Louis campusSteph Kukuljan STL PD 9-5
For the many who regularly follow my podcasts and post, you may recall one of my most recent focal points has been the role of a fiduciary. Fiduciary: look out for the bests interests of an organization. Particularly that college presidents and other leaders are not transparent with their college's finances. That fiduciary responsibility precludes them from being honest and transparent. I don’t like it, but I can’t argue with it too much.The main reason I am upping my proverbial game with more podcast content is that students, their families, faculty, staff, and communities need a fiduciary in their corner. So the College Viability app and my running commentary on new stories will continue until every stakeholder in the higher education market has equal access to information about the financial health and viability of their colleges – and the viability of majors, programs, courses, and employment stability at their college.I encourage you to share my podcasts with others in the higher education: In particular, parents, faculty, staff, and community leaders.Email me a comment, questions, concern, agreement, or disagreement to gary@collegeviability.comGet your version of the College Viability appStory links:AntiochBushman on tuition discountsOshkosh layoffsYork CollegeIndiana StateFr. Gregoire Fluet at Mount St. Mary
Hodges University announced their closure Friday evening, August 25th.Who is responsible for letting these colleges stay open?To the data: (From the College Viability App and IPEDS data 2014-2021)1. FTE enrollment down more than 1,000 students (-73%)2. 4 and 6-year graduation rates averaged about 10% and 15%, respectively. These are the lowest I have seen for closing colleges.3. Hodges 2021 endowment was less than $3M.4. Total assets were down almost $14M (-17%)5. In the past few years, they weren't even posting all of their IPEDS data to the National Center for Education Statistics5. Their 2022 audited financial statement showed P&L losses of amost $5M over the past two years.Is anybody home at Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) I checked their web site. The December 2022 actions included an substantive discussion of Hodges and its weaknesses - yet the agency gave something called: 'continued accreditation for Good Cause (caps included) Here is the linkWho are these accreditors serving? Crashing colleges? Innocent students and their famlies? Faculty? Staff?Here is the full College Viability blog on this story.For faculty and staff: Here is a courtesy link to compare enrollment of more than 1,300 private colleges from 2014-2021 (the last reported year)For college leaders and boards, here is a link purchase both the public and private college versions of the 2023 College Viability Apps.Here is the link to Doug Lederman's IHE story about Hodges closure.
In this episode of TWICV, we look at the PR efforts of 3 colleges. We talk about spin, tranparency, and more.
The market pressures on both public and private colleges will continue to move toward consolidation in some format. The recently released DOE rule changes on mergers will not substantively change the direction the HE market was already headed. The DOE changes in merger criteria and processes will only expedite market forces already in place. Specifically, more closures; few consolidations (mergers).I have already noted that many financially-stressed private colleges wait too long to engage in consolidation discussions. They typically wait so long that any potential partners who look at their finances regulalry take a hard pass. I continue to argue that the die is already cast for many smaller, mostly rural private colleges.There are already 200-plus private colleges on my viability watch list using FTE enrollment, admissions yield. 4-year graduation rates, and endowment as the criteria. While it is unlikely all 200-plus will close, it is all but certain many will.Here is the link to the IHE story by Katherine Knott.Here is a promotional link to both the private and public college versions of the College Viability app. Each version retails at $1,500. Through December 31st, you can order both for $947.
Elizabeth Kelsey's Dubuque TelegraphHearld article: Leaders of local private colleges determined despite anticipated challenges is thorough enough reporting. Yet she falls into the PR trap that most regional reporters do. She doesn't challenge the company line from colleges she is reporting on.Here are three areas I have written about previously that appear in this article
.Fallacy 1: New programs will save us. It won't happen in almost all cases. We are not looking for 'couch money'. These colleges need materially significant new, net revenue. New programs only guarantee start up costs and years of effort before a small percentage might materially contribute.
Fallacy 2: We are unique. Nope. The competitors for these three colleges are engaged in very similar activities to try and grow their market share and net revenue. A college degree is a commodity. Some are certainly more valuable than others; but it is safe to argue that the fastest, least expensive route will prevail.
Fallacy 3: "Let's not share any actual data with reporters. They aren't that smart." The discussion about reporters and intellect is for another day. Certainly, these stories play well locally. That is why reporters write them. However, College Viability is only one of many higher ed data entreprenuers working to improve the transparency of college finances and viability. The data in this story was predominantly based on hopeful numbers somewhere in the future. The actual data paints a much different picture than these college leaders choose to share.
Here is a link to get a FREE pdf report on the financial health of Loras College, Clarke University, and U. of Dubuque
Here is a simple list of 4 questions to ask colleges that will allow for a better assessment of their financial health and viability.1. Has your FTE enrollment increased or decreased in the past 5-10 yearsNOTE: Ask about the FTE enrollment because that is a standard measurement that creates the best comparisons2. What is your 4-year undergraduate graduation rate for the past 5-10 years?NOTE: This may be the most significant - and overlooked indicator. If a college has not graduated at least 50% of its undergraduate students in 4 years, there is reason to believe the mix of student is not academically strong AND they don't have the systems and processes in place to guide students towards graduation.3. What is your current endowment value?NOTE: Use a minimum of $50M. If a college is below that number it suggests they don't have the systems and processes in place to solicit gifts from alumns, community, student and others. A college unable to reach that $50M over decades cannot reasonably be expected to do so on short notice when a financial crisis develops.4. Has your admissions yield increased or decreased over the past 5-10 years?NOTE: Admissions yield is a popularity indicator. It shows what percentage of students a college accepted actually show up and start paying tuition. If the admissions yield is decreasing over a period of years, it strongly suggests that students are finding more acceptable options. NOTE 2: As a sidebar, the really selective colleges (Harvard, Yale, etc.) keep their admissions yields low on purpose - typically in the 5% range.
Inside Higher Ed's story on the 2023 NACUBO report on tuition discounting was not surprising. It was also not particularly well-reported. The article seemed unable to clearly and consistently define tuition discounts. For example, the reporter quotes a NACUBO source, Ken Redd, that these increases in tuition discounts show that 'institutions are devoting a lot of their resources to make education more affordable relative to the tuition price". That is some serious wording choices. These tuition discounts do not reflect any resources being consumed from the colleges participating in this survey. They are only foregoing revenue from these discounts. There is no resource in nothing.The IHE report also suggested that most financial aid from institutions comes from undedicated revenue sources, like general funds, institutional reserves, endowment earnings, and fundraising. That too is a dance with words. IPEDS reports two fields that are instructive. They are unfunded and funded institutional grants. As we do at College Viability, let's go to the data.. . . . . . . . . .
It was in interesting verbal dance that Iowa Wesleyan leaders undertook to explain their decision to close in May 2023. The cited the typical issues with shifting enrollment trends, declining fundraising and other associate 'headwinds'. While they didn't note their 8-year trend of decreasing tuition and fee revenue or their miserable graduation rates, they did choose to castigate Iowa Governor Kim Reynolds.In spite of the fact that Reynolds had an independent assessment of IWU's finances and their report suggested the $12M ask would not fix their systemic financial issues.We explore the details in this podcast.
Before you go to college, first get at the core!
At The Core was founded in 2012 to empower students with knowledge and tools as they prepare to make the very important decisions that surround their transition from high school to their future.
They help students get “at the core” of who they are and how to use this knowledge to propel them toward the future.
Their work encompasses a variety of high school, college, and career exploration services, so families can make decisions with confidence and clarity.
Webster University (St. Louis, MO) was the focal point in a late January 2023 story in the St. Louis Post-Dispatch. The essence of the story is that the college is in financial trouble. It is unlikely to close, but it will almost certainly face a need for lowering its cost base. This podcast addresses the specific issues at Webster only in the context that their response is similar to almost all private colleges with similar financial distress - and it wont' work.
New programs, degrees, etc only guarantee new start-up costs. With the competition doing the same thing, Webster and all of the other colleges have no guarantees of adding any materially significant new net revenue.
The intense pressure private colleges face on tuition discounting will extend to new programs they begin. The Webster leader's focus on public grants are not a long-term solution. It’s similar to couch money. At some point, every business must generate positive net cash from operations. Webster's admissions yield (aka popularity) is down 19% points since 2014. Their 2021 unfunded discounts were over $33M and the funded scholarships were a meager $1.2M. Their tuition and fee revenue has decreased $83M (source National Center for Education Statistics and IPEDS).
Those trends are not good.
While the details of this story are about Webster University, the responses from other private and public colleges are almost universally the same. “Let’s grow our way out”. Do we not see the LACK of logic that if every college is trying to grow its way out of financial distress – none or very few will be able to do so?
While colleges can't cut their way to success, they can certainly look to change their business model and look for merger or other consolidation partners. Webster and other college leaders should be looking to lower their cost base because the documented trends from the past are not promising.
Forbes.com had a guest contributor discuss her predictions (aka wishes) for 2023.
Gary Stocker focuses on 4 financial health and viability predictions for 2023.
- Pressure on tuition discounts will continue.
- Majors and courses will be cut in more colleges
- The closure rate for private colleges will increase.
- A select few of mid-size private colleges will step up and lead the way in consolidating college operations.
From 2015-2021, La Salle University has had decreased FTE enrollment of almost 600 students. Their tuition and fee revenue is down almost $22M. 4-year graduation rate is OK at 53%, but 6-year is only at 60%. In terms of graduation rates, this college isn't much more than a coin-toss college.
Here is a link to a one-page summary sheet for the College Viability App results of
La Salle University.
This podcast episode reviews the enrollment, finances, and outcomes for Buena Vista University (IA). Their enrollment risks are mitigated by decent 4 and 6-year graduation rates and an above average endowment. The loss of almost 500 FTE students from 2015-2020 is a significant risk factor and suggests the university has not found a solution to those enrollment losses. It also has decreased tuition and fees revenue that does not quite match the decreases in total expenses.
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As private colleges enter another challenging financial and viability year, I am going to review these high-risk colleges. These are the basic factors I will use to determine which high-risk colleges to review.
A college that meets these general specifications will be considered 'high-risk' of financial weakness and potential issues with viability. The data source is the National Center for Education Statistics and its IPEDS data base. The application used for the analyses is the College Viability App.
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FTE enrollment has decreased in the past 6 years.
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4-year graduation rates average 50% or less over the past 6 reported years
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6-year graduation rates average 70% or less over the past 6 reported years
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Admissions yield (aka popularity indicator) has decreased over the past 6 reported years.
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Tuition and fees revenue collected by the college has decreased over the past 6 reported years.
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The endowment in the last reported year is less than $50 million.
As is always the practice at College Viability, we offer comparative analyses of college finances, enrollment, and outcomes. It is not our practice to predict college closures - simply compare results using government data that has been submitted by the colleges themselves.
As private colleges enter another challening financial and viability year, I am going to review these high-risk colleges. These are the basic factors I will use to determine which high-risk colleges to review.
A college that meets these general specifications will be considered 'high-risk' of financial weakness and potential issues with viability. The data source is the National Center for Education Statistics and its IPEDS data base. The application used for the analyses is the College Viability App.
- FTE enrollment has decreased in the past 6 years.
- 4-year graduation rates average 50% or less over the past 6 reported years
- 6-year graduation rates average 70% or less over the past 6 reported years
- Admissions yield (aka popularity indicator) has decreased over the past 6 reported years.
- Tuition and fees revenue collected by the college has decreased over the past 6 reported years.
- The endowment in the last reported year is less than $50 million.
As is always the practice at College Viability, we offer comparative analyses of college finances, enrollment, and outcomes. It is not our practice to predict college closures - simply compare results using government data that has been submitted by the colleges themselves.
Birmingham Southern College is following the same no-win model as many other private colleges. They have maintained such a parochial focus that their options to survive amount to begging for support.
In this episode, we discuss other options that colleges like Birmingham Southern, Holy Family, Cazenovia could have pursued much earlier.
How can a public university with a 4-year undergraduate graduation rate of 33% not demand more accountability for its faculty?
The Hechinger Report has a story on December 15, 2022 that describes the gneral challenges in getting a higher education organization to change. In this podcast, I offer some perspective on what that means for colleges and universities.
The focus on changing enrollment patterns and accountability for graduation rates is the focus of this 5 minute commentary.
From 2015-2020, Rockhurst University (MO):
- Tuition and fee revenue increased $3M
- FTE enrollment is up 400 students, so the 2022 enrollment crash has to be significant.
- 4 and 6-year graduation rates are strong at 56% and 73%, respectively.
- Admission yield is a strong 30%
- Their endowment is weak at $38M in 2020 and has been very flat over the past 6 years.
Quick analysis: The article suggests this is a bad confluence of events. I tend to agree. Rockhurst compares favorably to most colleges I review. What concerns me is the $40K to $10M jump. I think somebody at the top screwed something up. It’s possible the 2019 the acquisition of St. Lukes College of Nursing and Health Sciences induced some unanticipated costs that are just now showing up.
Rockhurst's current leadership is proposing adding sports and academic programs. The only guarantee for adding programs in the current higher education market is start-up costs. Net revenue is not guaranteed, in large part because so many other colleges are doing the same thing.
Rockhurst is one of those rare colleges in a position to merger with another regional private college. They would bring strong historical credentials and could leverage scale across many non-academic functions to better manage over costs.
It is also worthy to note that the university's top leadership has had recent attrition.
Higher education economics and finance researcher Julian Treves recently posted about how college tuition price increases weren't able to keep up with the general rate of inflation.
I share some observations and the concern that too many colleges have already lowered admissions and graduation expectations just to meet their own financial needs.
Here is a link to get these podcasts sent directly to your inbox.
It is a new resource for families and students creating their list of colleges to consider. But it is an increasingly important function for these same families.
News reports regularly note the increasing number of colleges that are closing. It is reasonable and likely that the closures will continue and even increasing in the coming months.
This podcast shares reasons why you want to include a college viability expert as part of your college decision-making process.
Click here to have these podcasts sent directly to your inbox.
The 2022 College Viability app is here.
I have been using term: ‘Coin Toss’ colleges to identify colleges with just 50% chance of graduating in 4 years – kind of like heads or tails when you flip a coin
Here are the statistics: 780 private colleges in 2020 4yr GR less than 50%
384 with 4yr GR LT 25%
As you start to develop your college list in the coming months, look at
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Enrollment Trends
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Graduation rates
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Admissions yields (aka Popularity)
Cazenovia College has now passed the 3rd deadline for making a past-due bond payment. There is no information coming out of the college. We have to wonder what the remaining students are thinking?
Don't be fooled by a new and better scholarship offer. Merit aid or scholarships are often simply a fancy way to say 'tuition discount'. It is still a savings to you, but it is a source of lost revenue for the college - something many smaller private colleges can't afford, but do anyway.
The higher education news this week includes bad trends for both enrollment and endowment. It is both for the smaller colleges that should concern us.
New York Times reporter, Ron Lieber, recently surveyed the lack of submission of the Common Data Set (CDS) from a small sample of colleges in the Northeast. Some colleges suggested process issues, some submitted, some refused to do so, and some of the colleges Mr. Lieber contacted didn't respond at all.
The Common Data Set is a single, but thorough, form colleges have submitted for years to a public site. A variety of researchers, regulators, and others used the data to report on higher education trends. This one CDS was the only form required and was used for all sorts of reports and analysis.
I took the story and ran with a similar exercise for 90 private colleges in Illinois, Iowa, and MIssouri. The result: 69 of the 90 had not yet submitted the most recent (2020-2021) CDS.
Future students and parents are typically overwhelmed with the material they must review and comprehend as they conduct their college search.
This' down and dirty' look at the Parent's College Viability App provides a quick tutorial on how to rule out colleges based on enrollment and endowment data.
Here is a link to have these updates sent directly to your inbox.
My focus is on the financial health and viability of colleges in the United States.
My life history is one for which the college education has been profound in more ways than I can reasonably describe. I developed the College Viability Manifesto as a resource to provide a more timely perspective on the college experience balanced with the reality that too many colleges are not financially healthy - to the point of not being viable as an on-going business.
We have seen many colleges close in recent years, and there is every objective reason to believe many more will close in the coming years. I believe my prediction is solid. The challenging part is the time frame. There are so many factors to contemplate regarding a college's viability that to make a prediction of 'when' would not be responsible.
The College Viability Manifesto balances the importance of both the experience of college with the need to carefully cull your initial list of colleges by compariing their financial health and viability using the College Viability App.
Here is a link to have these updates sent directly to your inbox.
The Fall 2022 data for college enrollments is not good. Declining enrollment across higher education institutions is common. I share a misleading enrollment PR practice by too many colleges who shout from the proverbial mountaintops that their 2022 enrollment has increased. The misleading part: they are comparing that enrollment to the pandemic years of 202o and 2021 that were at the height of the pandemic.
Here is a link to have these updates sent directly to your inbox.
It all started when the president of a small, midwestern college asked me to find some potential merger partners for his college. I found nothing of consequence.
So, I used data from the National Center for Education Statistics to create an app anyone can use to compare the financial health and viability of colleges.
In this episode, I give the back story and reasons you will want to make the financial health of your possible colleges a top priority as you develop your list.
Here is a link to have these updates sent directly to your inbox.