This Week In College Viability (TWICV) for December 2, 2024

Gary D Stocker (00:01.582)
It is, of course, this week in college viability news and commentary for Monday, December 2nd, 2024. Hi, everybody. It's Gary Stocker. The Thanksgiving holidays are behind us. The last of the turkey and accoutrements are being consumed as leftovers, and it's time to stay focused on higher education. This week we have news and commentary stories on Webster University, one of our increasing number of frequent flyers.

Webster's Financial Distress, they get that designation from the Higher Learning Commission. And I kind of wonder if there aren't more of those designations coming. I'll talk about why. Keystone College could lose their accreditation. What else is new? They've been in the news for a long time. I've got a news story on that and some commentary, of course, so go with it. Central State and Ohio make some major changes. It really has to do with some online programming and some special programs they had going. You want to know what happened there.

And the Bell tolls, this is an article from Richard Vedder in the James G. Martin Center for Academic Renewal. And I'm going to focus on part of it. It's a look ahead kind of piece. I'm going to focus as I regularly do on graduation rates and poor financial health. Two layoffs and cutbacks. San Francisco State University. This is a story from Max Harris and Caldwell on December 1st. And they're cutting back. And they're cutting back. Lecturers amid.

a financial emergency that they have there. We see that happen with some regularity. The details are different, but the essence is the same. The revenue is not what they need it to be and cutbacks among the lecturers now. And one can guess programs later on. Page two, Webster University pushes back against financial distress designation. Of course, this is from the Higher Learning Commission. Monica Obradovich from the St. Louis Today had the story. This was back early last week.

And Obradovich says, the story is entitled Webster Pushes Back. What's interesting about this story is that the accrediting agency, the Higher Learning Commission, is, and I'm quoting, is warning the public that Webster University is facing financial headwinds that puts its educational programs at risk. Obradovich's story goes on to point out that HLC had noted a reference

Gary D Stocker (02:23.664)
to doubt about Webster University being able to continue as a going concern. I've talked about that in previous podcast episodes. They have doubt about Webster continuing as a going concern. And this is from their 23, the Webster University's 2023, audit and financial statement. Now here's a sidebar to that. There were, and I've had this story before, there were 17 references to Webster University continuing as a going concern.

If you open up a financial statement for almost any other private college in the country, and probably other businesses as well, you'll see anywhere between two and four references to a going concern. And those are just standard references to the responsibilities of the auditing agency and the college itself. Webster had 17. They had issues, we've talked about that before. So to the higher learning commission and to the other credit and the agencies, does this indicate a shift?

indicate a shift in your efforts to warn the public more aggressively about a college's weak financial health and even their viability. If so, what other colleges with going concerned notes are out there? I know there are lots. Will we see the same financial distress designation? Will that financial distress resignation be released to the media or will it continue to be hidden in the digital canyons?

your respective websites credits to Monaco Redavich for finding this about Webster University. Or I guess to the crediting agency, are you just picking on Webster University because they've been in the news so much? They've been busy showing us how not to profitably run a college. I got to wonder about both of those. Keystone College, Accreditation at Risk. This original story is Josh Moody and Inside Higher Education on November 27. And this is from the president, Keystone College.

His name is John Pulo. I think I pronounced correctly. And he shared in a letter with Inside Higher Education. I'm going to quote, we all knew that the process of rebuilding Keystone and changing our trajectory would not be easy. At the same time, I feel the adverse action, the accreditation removal, taken by middle states significantly undervalues the progress the college has made over the past several months.

Gary D Stocker (04:48.731)
to strengthen our financial situation, rectify our weaknesses, and move forward. Of course, this is from Keystone College President John Pullo to a letter to Inside Higher Ed.

Gary D Stocker (05:10.63)
Ben Engelsby in higher dive noted in a Monday letter to Keystone that the Keystone president cited the college's failure to provide evidence showing compliance with several accreditation requirements, including around ethics and integrity, planning and resources, and governments and leadership. So even if Keystone did all of these things around ethics and integrity, planning and resources and all.

Even if Keystone did all of those things, it does nothing to improve the financial position. In too many financial indicators, in a Matt Hendricks Private College Visualization Dashboard Compass app, Keystone closely mimics the eight-year pattern of recently closed colleges in the categories of net income, operating cash flow, net tuition revenue, change in operating revenue,

and unrestricted net assets to expenses. So they're not getting any better. They have a history of poor financial health for at least the last eight years. And even if they did improve finances, the college only graduates about 30%, that's three zero, about 30 % of its students in four years and less than half, less than 50 % in six years.

And what this tells me is that the accrediting agencies have established a culture within colleges, within the colleges they accredit that only values input. And as I said many times before, dotting of I's and crossing of T's, there is no way as a standalone college with this poor financial health that Keystone turns it around in a period of recent short months or in coming months at all.

Three, Union Institute announced this closure earlier this year, and there was a story last week, and I don't have this source, that Union Institute students can't get transcripts. And I bring this up because the students that went to Union Institute, even though they had a long history of not being able to afford to be able to stay open, they're not able to get their transcripts without going through a lot of trauma and trouble.

Gary D Stocker (07:33.667)
And it's just a warning. If you're looking at colleges in financial trouble, in financial distress, and you want to take a chance on going there, and that's fine, know that at least in the case of Union Institute, I think I've had other stories like this. If that college closes, getting access to the transcript of the courses you did successfully complete can be problematic at best. Central State, Ohio.

Central State University faces struggles as university makes major changes. This was in the Dayton Daily News last week from Eileen McClory. And I'm going to read you parts of the story for Ms. McClory. It was a program called Career Plus at Central State. It was a collaboration with several unions, including the AFL-CIO and the American Federation of State and County and Municipal Employees. And the program allowed students who were either union employees or the children of union employees

to combine other aid with union money to pay the full cost of tuition. The program was initially attractive to lots of students. It was over 4,000 in 2021, 2022, but dropped down to just under 900 students this year. Now the US Department of Education sent an assist letter to another college in Ohio in 2022 that the program, this Career Plus program,

unlawfully charged students with Pell Grants more than students without Pell Grants. All right, to their state, to their credit, Central States ended the program. It was an exclusively online program after the spring of 2023, so a little over a year ago. And after that, the new cost structure, I presume in an effort to be in compliance with the U.S. Department of Education, the new cost structure requires students who are Pell Grant eligible to pay a $150 fee each semester.

students who are not eligible pay 250 per credit hour, up to $3,000 per semester. So let's look at a quote from Central State President, Marquinho Couti, and he identified four key areas to work on. Now listen to this. Number one, building bridges across stakeholders. Number two, empowering faculty and staff, he goes with intent, prioritizing student success.

Gary D Stocker (09:55.989)
and optimizing campus resources, none of which has any immediate impact on a bad financial situation. It's like the president isn't even looking at the financial data at Central States. And as you all know, I looked at a lot of college data, a of college enrollment data, and it's tough. It's tough to find a college with decreasing enrollment for online courses.

Somehow the folks at Central State have produced a product for whatever reason that an increasing number of students have no interest in, and it indeed is contributing to a negative financial situation at the college, at this college in particular. Trump's vision for college accreditation could shake up the sector. And this is by Eric Kelderman on November 26th in the Chronicle for Higher Education. I'm going to quote his story.

Critics on both sides of the partisan divide complain that higher education accreditation is not driving big improvements in student outcomes. Duh! How many times have I talked about the pathetic four-year graduation rates? I think, I believe, these improvements should include requiring minimum program completion numbers. It's kind of like the old heart surgeon story. Would you rather have a heart surgeon who does a valve replacement, a heart valve replacement, for example,

10 times a year or one who does that same procedure, something like 20 times a month. It's the same with college programs and majors. If a college only has a handful or so of program completions, especially over a period of three or four years, is it really drawing students? First of is it really drawing students, period? Secondly, is that not an indicator that it's not a quality program if nobody's choosing to choose it? Nobody's choosing to go with that program?

So a college with a program market share, this is something I'm working on for 2025, a college with a program market share in single digits cannot possibly be as strong as one with a higher percentage. That app will be available sometime in early 2025. Page four, the Bell Tolls for Higher Education. This is a long article by Richard Vetter for the James G. Martin Center for Academic Renewal.

Gary D Stocker (12:18.342)
And the subheading reads, the incoming Trump administration should make serious post-secondary reform a priority and all sorts of stories like that are hitting us every day. I want to get a focus on a part. And Dr. Vedder says accreditation is another issue that should be on the table. State governments and accrediting agencies independently regulate collegiate behavior, but American higher education achieved its great

international reputation in the era before a centralized regulatory body existed in Washington. He's talking about the Department of Education. He goes on to say the accrediting agencies approved by the federal government do little to ensure educational quality and have pushed schools into more diversity. I will take his word for that. Into more diversity than they might otherwise have chosen. Fair enough.

If schools had to stand behind their results, I think he's talking about graduation rates here, if schools had to stand behind their results by repaying the government, if students couldn't repay, there would be no further reason to rely on accreditation. Interesting perspective. So there's two reasons that Dr. Vedder is correct. You've heard me talk about him before. I'm going to run with him again. Pathetic graduation rates and colleges with poor financial health.

There was a line in the early days of computers that we would be a mess as a country, as a world, if cars crashed as often as the early versions of Microsoft Windows or even the early computers.

That analogy, I believe, holds with colleges. If we bought, for example, 100 loaves of bread, we would expect every one of them to be fresh and ready to be consumed. However, talk about, I talk about time and time again, for every 100 students who start at a given college, less than half, less than half graduate from that college in four years.

Gary D Stocker (14:28.544)
And why have you established five accrediting agencies, regional credit agencies, although now they can go to national. Why have they not acted on graduation rates and even poor college financial health? Here's why. I'll tell you why.

They get paid by the colleges they credit. If those colleges don't enroll students because they lose their accreditation and lose their access to Title IV funds, they don't collect tuition and fee revenue, a small amount of which pays for their accreditation fees. It's a relatively small amount for the colleges, I know, but it's the main source of revenue for those accrediting agencies. And I even tried to search for what those fees were, what accrediting agencies charge colleges to credit them.

and surprise, sarcasm alert, and surprise, I couldn't find any authoritative source that offered a direct cost. And of course, there's nothing wrong with colleges charging fees for accreditation, a service that in theory provides value. The issue is that the value has deteriorated to the point that the accrediting agencies

continue to only focus on inputs and again, dotting I's and crossing T's. It appears that graduation rates don't matter. The ability to provide enough resources to provide any semblance of a quality college education don't matter. And what's the fix? What's the fix for this accrediting mess? Make both graduation rates and finances matter. Does that mean many colleges will lose their accreditation? Absolutely.

Is that acceptable? Absolutely. If you can't meet the standards, why your college? And poor finances and poor graduation rates are just two of many indicators of colleges that maybe shouldn't continue to be colleges. We don't want to pay. We don't want to continue to pay for a service that only works not even half the time in terms of graduation rates. And if sounds like I am increasingly targeting the accrediting agencies, you're correct.

Gary D Stocker (16:41.376)
It is the focal point of the higher education dog and it wags that dog's tail because they are the gatekeepers for title four funding. And maybe, just maybe the Webster story is a leading edge of a change of focus for these agencies. Trust me, I'll be following that closely. And as always, thanks for making time to listen to this week in college viability until next Monday. My name is Gary Stocker. I'll look forward to talking to you again.

on December 9th with another episode of This Week in College Viability.