This Week In College Viability (TWICV) for August 19, 2024

Gary (00:01.718)
Welcome to the August 19, 2024 episode of This Week in College Viability. If you think colleges are having troubles, as usual, I am recording this week from St. Louis, and St. Louis is where we can't even get the city kids to school. The great St. Louis bus catastrophe kicks off today. The school district couldn't find buses for lots of reasons to get students to schools.

And my friend, Blythe Bernard at the St. Louis Post -Dispatch has done what I think is Pulitzer worthy investigative stories on the colossal failure that is the St. Louis Public School leadership. It's not the kids, not the families, not the employees. It's the school board and it's hired and now outstid leaders high. It's Gary Stocker. Great to be back with you for another weekly podcast episode of This Week in College Viability. Hey, send your questions.

and comments to me at garyatcollegeviability .com this week. Some stories about colleges and the status quo. It's a story from the James Martin Center for Academic Renewal. The Chicago Tribune has an editorial. They, like me, are piling on Western Illinois University. We'll talk about that. Wittenberg University, a lot of folks sent me some information on this, is playing hide and seek, the old kids game, with information on its layoffs and cutbacks.

And Michael Horn asked the question, are we really on pace for 25 % of colleges to close or consolidate? Michael Horn thinks we already makes this case. I'll talk about that. And then we have a low end, sorry for the insult, low end local news media takes a small private colleges enrollment numbers without checking anything. I even provided the evidence that the numbers weren't correct.

talk about that and are students bailing on private colleges to go to financially safer public ones? I've speculated on that for a while. I have some limited and anecdotal evidence that that might be the case. As always, let's start off with layoffs and cutbacks and closures. I've got one. Ohio Northern makes job and programming cuts. This is a private Christian college in Ohio. The story was from June 26th. Somehow I missed this one.

Gary (02:27.638)
and it was from lemohoi .com and Mackenzie Kleeman has a story. Here's a quote, Ohio Northern University is eliminating 48 jobs and phasing out or realigning 21 major and minor degree programs with low enrollment. And of course, this is triggering a no confidence vote against the university's Dean of Arts and Sciences. I don't know what he or she did wrong. Incoming students will no longer be able to major in subjects such as religion.

physics, public health, youth ministry, forensic, accounting, or Spanish starting this fall of 2024, though general education courses and minors for some of those programs will continue. The university officials started reviewing its programs when projections revealed the schools would be short $7 million by 2025. Boys and girls, ladies and gentlemen, that can't possibly be short.

short notice news, they had to see that coming for a long, long time. Page two, colleges are wed to the status quo. And the subheading on that is ideals that were once a grounding have become an anchor. And this is from the James G. Martin Center for Academic Renewal by August, it's on August 14th by Clark Ross. Dr. Ross taught economics at Davidson College, home of Steph Curry.

from 1979 to 2024, that's a long time. And he served as Dean of the faculty for nearly 15 years. Dr. Clark writes, Kara Miller and Brian Rosenberg, and Rosenberg is a gentleman we interviewed on this podcast last year, wrote the book, Whatever It Is, I'm Against It.

Gary (04:20.0)
Who is this?

Gary (04:28.342)
Kara Miller and Brian Rosenberg, wrote, whatever it is, I'm against it. Rosenberg did. Whatever it is, I'm against it. Resistance to change in higher education. They write on different articles of the difficulty of fostering meaningful change in our colleges and universities. All right, we've talked about that before. Private businesses, they reference, in the United States demonstrating such inflexibility as colleges would quickly endanger their viability and existence. Dr. Clark Ross writes.

Dr. Ross goes on to say, today's world, he uses some strong words here, in today's world, the intransigence of our institutions of higher education is exactly getting them to the irrelevance they deserve. My word is not his. In prior years, the status quo filtered down. He makes a good point. In prior years, the status quo filtered down from elite universities and he argues helped ground post -secondary education with some positive warnings. All right, we'll grant him the premise.

Today is different, Dr. Ross goes on. American post -secondary education confronts a bevy of challenges that threaten its stability, and it concludes with adherence. Adherence to the status quo has become an anchor preventing meaningful change. Now, Dr. Ross goes on to offer some important ideas, and I'll include a link to the story in the show notes, some important ideas and details to move colleges away from their resistance to change. Their anchors, he calls them.

Now, let me offer the Gary Stocker addendum. And again, Dr. Clark offers some logical, well -meaning, possible anecdotes, possible solutions. Here's my addendum. of the changes and recommendations from Dr. Clark will move forward until the economic imbalance of supply and demand. And we have talked about that many times. The imbalance of supply and demand for colleges.

and college students reach something much closer to economic equilibrium. When I say when enough colleges close, or when more of them merge or otherwise consolidate into more efficient and effective organizations, and there's talk about that, but not much action these days, if they don't merge or consolidate, then we will witness the withering away of this chronic industry -shattering resistance to real economic.

Gary (06:56.726)
and business model change in higher education. So until supply and demand balances more, there's not gonna be change of any substance industry -wide. Yes, there'll be bits and pieces here and there. And of course, none of this applies to the top 30 or 50 public or private colleges, the IVs, the Illinois, some Ohio States, Texas, USCs. None of this applies to those kinds of colleges. Change there, the pace of change there.

will match that of glaciers in an ice box.

And I want to thank the Chicago Tribune editorial board for joining me in piling on Western Illinois University. They did this on August 13th in that edition of the Chicago Tribune. And I'll read what their editorial said in part. Western has announced two big layoffs. On Friday, the school announced it was eliminating 89 positions, including 57 non -tenured faculty and 32 staffers. That came after...

some 35 faculty roles had been nixed or not renewed last month, I presume in middle of July. Adding to that is a hiring freeze and the disappearance of several vacant positions and a pullback from another Western Illinois University location in the Quad Cities area in Illinois and Iowa. From 2010 to 2014, the editorial goes on, the number of students at Western Illinois hovered around 12 ,000.

But then it took a dive over several years in the fall of 2023. Last year, the university enrolled 7 ,000 and change. Interim president, and we've talked about that, interim president Christy Mindrup has said she expects enrollment this fall, get this, interim president Christy Mindrup has said she expects enrollment this fall to be between 5 ,500 and 6 ,000 students.

Gary (08:57.046)
It was 7 ,000 and changed 12 months ago. The editorial goes on to say that might change. I don't believe that. But it's still a big drop. Yeah, you think? It's still a big drop in one year, not something so easily blamed on demographics. That's the Chicago Tribune's nice way of saying Western is screwing up. Again, thank you for joining me on Piling On. They also conclude with we'd also wager most Illinoisans don't know that some of their state universities

are currently operating at about 50 % of the enrollment that they had previously. I don't know what to add. Will Western Illinois close? I don't think that's likely. It's public. It still has some handful thousands of students attending. But man, it's going to shrink. It's going to shrink to a size I can't even begin to guess, something less than 5 ,000.

Probably something more than two or three thousand in the coming years would be my guess. And they'll have to downsize to match the revenue that comes from that source. It's highly unlikely in my mind the state of Illinois subsidizes such a drastic drop in enrollment. Page three, Wittenberg University. I think this might be the first time they're on the show. Reaction to Wittenberg cuts mixed, of course. Faculty frustrated leaders look to long term. course, that's what leaders always do because it gets them out of the current bind.

The board of directors at Wittenberg University says details of 30 faculty and 45 staff cuts will be finalized by September 15th. Now, this story is from the Dayton Daily News. Eileen McClory, Jessica Orozzo, and Brooks Burlock all reported on this. There's an update on August 16th from this.

In the category of tough to believe, this is from the reporters, at a board meeting, the cuts were announced. It used to be, it was 60 professors would be cut along with 50 to 75 staff. Get this, there are about 100 faculty on campus and the initial proposal was to cut 60. And now it's down to, what did I say, to 30. 30 % of faculty are proposed to be cut on the campus of Wittenberg University.

Gary (11:16.95)
Laurie Askeland, Askeland maybe, is the American Association of University Professors advocacy chapter, chapter president, that's awkward, chapter president at Wittenberg. And she said that cutting 30 faculty and 45 staff is still a big number. Okay, we know that. And the devil is in the detail, she goes on, which we don't yet know. Here's what really gets me in. We've seen this kind of stuff before. Ms. Askeland goes on.

No faculty, not even the provost of the university, were allowed in the room where this plan was crafted, Aspen said. The board, she goes on, has exhibited a shameful degree of ignorance about the basic logistics of running an accredited academic institution so far. I don't know the faculty would be much better. And that body created the financial situation. She's talking about the board and leadership. They created that financial situation.

over decades of mismanagement. Okay, we've heard that before. So she concludes that I am not optimistic that this Hail Mary Cup Acts slapped together plan, there you go, will best serve the institution or the students. I guess it's time for me to recommend that the good folks at Wittenberg University start accepting resumes for someone to turn off the lights. And let's go to the data.

The four to six year graduation rate was 50 and 57%, respectively. Not bad, but not great. And tuition fees decreased $11 million over the last eight reported years. Total expenses were up $5 million. Total revenue decreased almost $6 million. That's an $11 million total change. The endowment is at $108 million. And of course, my college viability minimum is $50 million. And a quick look at Matt Hendrick's perspective data science visualization shows

Wittenberg University has really increased its draw on its endowment. We're talking about that in a future, I think it's the August 26th College Financial Health Show with Matt and myself. And they can do that. They can draw against their endowment, but that's not a good practice for many reasons. And I guess I'll wrap this one up. Does anybody know who the accrediting agency is or more importantly, where is the accrediting agency for Wittenberg University?

Gary (13:44.052)
Are they going to have some out of the blue announcement, a closing Wittenberg University like they've done at Wells College and other places? You are? Some Philadelphia?

Gary (13:55.147)
I'll leave my iDotter and T -Crosser conversation for another day. And same tone, where's the Federal Department of Education? Do they think Wittenberg is a fine university with exceptional financial capacity to continue on indefinitely? I'm not going to throw a jeesh at this because it's a new story, but how many more times will I have to report

on these pathetic college management stories. Michael Horn writes for Forbes among many other things. His headline in a recent Forbes article is, 25 % of colleges consolidate? An update on a prediction. And here's what should really scare folks from Michael Horn's story. He says, if roughly 10 % of private nonprofit colleges

have closed in the last 11 years, and that's actual data. Given the looming challenges, and all the things we've talked about in terms of financial health and enrollment and all those things, given the looming challenges, do people earnestly think that 15 % more off of the 2013 -14 number schools, roughly 250 more colleges will not close or merge over the next nine years?

To hit that number would be just 20 at a year or just over two a month and we're already about one a month this year. And I still expect that the demographic, the FAFSA debacle will up that number to two or three per week, per week over the next many months. And again, Horn reminds us the demographic decline really hasn't even hit in earnest. Yeah, page four.

Olivia Mazzell, KOMU, I think it's TV, it be radio, on August 15 had a headline that says, William Woods University welcomes its largest class of new students. Now I'm seeing this all the time and I look at all these stories, I don't put them all in the podcast because there would be too many. But this one caught my attention in part because it's regional, it's just a couple hours west of where I am here in St. Louis. And the story link will be in the show notes, of course. And so here's the note that I sent to Miss Mazzell.

Gary (16:17.942)
Again, KOMU, August 15th, Olivia Mizzell. Ms. Mizzell, the subject matter is, you double check the William Woods University enrollment data? Ms. Mizzell, I pulled William Woods data from the 2024 Private College Viability App. That's the one I wrote. It uses data from the National Center, blah, blah, blah, blah. And I gave her some screenshots. And I go on to say, clearly, William Woods University has had much larger numbers in the past reported eight years than the showing now.

I am confused, I say, how they can claim, end quotes, its largest class of new students in its 154 year history. They go on to say, this is the second year in a row the university has broken its enrollment record with 556 undergraduate students starting classes today on Monday. They are either confusing terms or using a data source not available to the public, I conclude. Now their enrollment has clearly decreased. To claim it has increased, look to be at

best misleading. And I'm happy to share the courtesy link to the 2024 private college viability app to Ms. Mizzal, but crickets, nothing. Crickets from Ms. Mizzal. And just as a point of reference, they say 556 broke its enrollments record. I show in 2015 total moment was 2 ,100, almost 2 ,200. Eight years later, it was 1 ,500, almost three times what they're saying is our most, the largest enrollment now.

And their full -time approval enrollment, which I think is a little better, shows 1 ,300 in 2015 and a little over 1 ,000 in 2022. Now, the 2023 data won't come out in bipeds for a little while. What's our source to confirm that? And I went to Matt Hendricks' visualization tool, and William Woods had a negative 23 % net income margin in 2023.

In 2023, they had a surge in endowment appropriation that was far above normal. Now, they can do that. It's not a good practice. not like I shared earlier. And they had a cash deficit of about $3 .6 million in 2023, again, from Matt Hendrick's tool. They issued $830 ,000 in their debt, sold $5 .6 million in investments, and borrowed $4 million from the endowment. Now, that doesn't add up. I don't know what's going on there. And the good folks at William Webster's... Excuse me, William Woods.

Gary (18:45.226)
William Woods University are certainly allowed to do this. Nothing inherently wrong with it. The big question is when, if ever, will they generate positive cash from operations? Our operation is they run a college. They should have students paying tuition that helps pay the bills and have the college something left over for investment in its future. And here's a question for the media folks. I've done this before. I'm going to do it again. Media folks, ask colleges.

when they're giving you their line for fall 2024 enrollment, ask them what was the average tuition discount rate for the fall 2024 class? Send it to me, doesn't that discount rate along with the college? I can guesstimate how much revenue they're bringing in from that. And remember reporters, free courtesy link to the 2024 private college viability app for any reporter who requests it.

All I ask is that the domain that you use in the email address is from a media source of some sort.

Gary (19:56.212)
And finally, let's talk about something I have speculated on recently. And this is one of a few stories I saw in the last week or two. The University of Missouri, this is by in KBIA by the Columbia -Missourian newspaper. University of Missouri students worry about overcrowding on campus as enrollment surges. University of Missouri students worry about overcrowding on campus as enrollment surges.

The university plans to admit 6 ,200 and change students this year, increase of 18, 18 % from last year. With limited dorm space, the story shows the university is contracting a nearby apartment complex to accommodate students. And there was more to the story.

So here's my operating premise. I don't have much data to support this. That's strange for me. What if we are seeing early signs that the class of 2024 college freshman class is staying away from private colleges in general and moving toward public colleges in large part because there is developing concern about the financial health.

private colleges. Now, of course, that doesn't apply to all private colleges. There are hundreds that are fine and solid financial shape, provide good academics. But I think if we continue to see these kinds of stories about other major land -grant colleges, both public or land -grant side and private on the other side, there's reason to think that I might be right, especially if we see lower numbers or no numbers from

colleges with bad data for fall of 2024. And if the FASTA debacle starts that closing rate increase, we talked about from about one per week, not quite, to as much as two to three per week, colleges closing starting sometime this fall and extending into next spring sometime. And I want to do a wrap with higher education friend, Kate Colbert. And she's the author, co -author of Commencement, The Beginning of a New Era in Higher Education. And this was a social media post.

Gary (22:11.838)
and it was talking about higher education in general. And I'm going to read, I guess it was focusing on Wittenberg now that I think about it. I'm going to read her quote. This is Kate Colbert. At the end of the day, it's a business talking about colleges. And when academic enterprises fail to provide enough value for enough people and fail to capture enough value for the institution, something Kate Colbert writes has to give. Reducing the workforce to better fit the workload is a good start.

but it's the beginning of the end, it's usually the beginning of the end, Kate Colbert writes, for schools that won't innovate. The vast majority of small, private, religiously affiliated liberal arts colleges aren't willing to serve modern students in the way they deserve. Schools like Wittenberg, Kate Colbert writes, would rather die than change.

In the end, the industry, she concludes, will be strengthened by this right sizing. But for alumni, students, and employees, there will be pain. Kate Colbert, I could not have said that any better myself. As always, thanks for making time to listen. Make sure you send your questions and comments, even insults, to me at garyatcollegeviability .com.

And I will close with two items from my college liability manifesto. There are 10 I'll told. The first one is college is good. College is really good. I'm an example of that. Go if you can. And the second one of the 10, colleges will close. Many will. Most will not.

Until next Monday for this week in college viability, I'm Gary Stocker. Let's do it again in seven days. We'll talk then.