This Week In College Viability (TWICV) for January 22, 2024

Gary Stocker (00:01.162)
It's January 22nd, 2024. It's another episode of This Week in College Vibe. Hello, hi, my name is Gary Stocker. And this week has it almost all weeks. Let's start with cutbacks and layoffs. Our good friends at Birmingham Southern are gonna make the news, not only the news, they're in the Wall Street Journal this week. We'll talk about that. Believe it or not, our first, I believe, no faculty, no confidence votes for 2024. I think we have two of them.

We talk about bonds and higher education again. Goddard College is really, really close to having to get someone to turn the lights out. They're gonna become online only and of course we'll have much more. To cut backs and layoffs, we go to the University of New Hampshire. Announces job cuts to help reduce expenses that happens all the time that are in many places. Kirk Enstrom in digital managing editor has that story on January 16th from WMUR.

in New Hampshire. And the cutbacks here are going to be 75 employees. They need to save about $14 million. You're not going to get that with just 75 employees. UNC Greensboro, I think I have some more details on this later on, they're looking to cut 19 academic offerings. Let's talk about that now. The offerings are across the spectrum. Let me just read some of the items from the story. And again, it says 19 programs.

And anthropology, Bachelor of Arts in Anthropology with 62 students is going to be cut. Russian, a BA looks like in Russian, it was six students. A Master of Arts in Languages and Literature with seven students and a Master of Arts in Mathematics, this has all concentrations for five students. Now there are many more to the 19 being cut here, but here's the point that I want to make on this. There's a range of volumes here from 62 down to five or six, I think.

But one of the factors we continue to not focus on with these colleges, and this is across both the public and private spectrum, is the number of program completions and major completions in all of these disciplines. And I'm working on a new version, a new product from College Viability that will let users compare those completions across both bachelor and master's degree programs.

Gary Stocker (02:20.774)
across multiple colleges just like you can the finances and enrollment and graduation rates with the regular college viability app. You really don't want to think about going to a college who has four journalism majors because that program is going to be high risk of cut, whatever the major is. You want to look at colleges that have dozens, if not hundreds of majors in that discipline they're considering. That's the same analogy I've used before and you've heard from others. If we need brain surgery.

We'd like that brain surgeon to be someone who does three or four a week, not three or four a year. Same thing for majors. You want a college and its faculty who do this on a regular basis, who can stay up to date in the field and know what's going on and not one who teaches journalism. I'm just picking on journalism as another job, another task. So, of course, we have the cutbacks and immediately following the cutbacks, we have the protest.

And the protest story reads, faculty members, and this is at UNC Greensboro, is that correct? UNC Greensboro. Faculty are saying, hey, you got counting numbers. Faculty members question the process and outcomes as University of North Carolina Greensboro considers discontinuing 19 programs. The subtitle reads, errors and undercounts in the evaluation of targeted departments lead professors skeptical and frustrated.

And this is from Joe Killian on January 20th in ntnewsline.com. And so here's the quote, and I'm going to read from the story. Within hours of the message about the 19 at-risk programs at UNC Greensboro, professors and department heads had identified multiple errors in the specifics of the list, which credited some programs with dozens fewer student majors than they actually have.

and they use Russian and Chinese as an example. Okay, all right, we're gonna pick apart the numbers and I think it might have to do with minors and majors, I'm not quite sure. But the trend here is that any, and you've heard me say this before, any proposed change to a business model at a college, almost anywhere, the faculty protests will follow.

Gary Stocker (04:38.522)
You know, you've got pizza and pepperoni, you've got hot dogs and apple pie, you've got news stories and Twitter X. One almost always follows the other. College faculty just aren't receptive to change. And maybe they have a case on the numbers. That's not the point. We're going to talk in a couple of minutes. We're getting back to economics. It's just that these protests are expected. And I'm sure presidents, when they're making these decisions, boards, when they're making these decisions know they're going to get the protests.

It's not going to change much of anything.

And then our good friends at Birmingham Southern, and we've talked about Birmingham Southern many times. This time they made the big time. There was a story in the Wall Street Journal last week, Melissa Korn on the 20th. The private college, this private college has been on its deathbed for 15 years. Birmingham Southern seeks new Alabama lifeline as city pushes to avoid closing of campus. And this link, like all the stories linked here, talked about here will be in the show notes.

Here's the interesting part that I pulled from the story. Birmingham Southern University President Daniel Coleman said he and the school board will, the school's board, excuse me, he and the school's board will make a final call, I presume on closure or not, before April on having the fall term or not. Page two, why Americans have lost faith in the value of college. We've talked about this before.

And the subtitle reads, three generations of college for all. And the US has left most families looking for alternatives. This was Doug Belkin with a Saturday essay in the Wall Street Journal. And I should note that the Wall Street Journal stories, many are behind a firewall. So be wary of that. And here's, this could be a tipping point story. I don't know how many folks that are considering college read the Wall Street Journal and education stories in the Wall Street Journal, but consider this conceivably, possibly.

Gary Stocker (06:39.706)
A tipping point story, and here's what Belkin writes. University governance was designed for an era, an analog era, long, an aged era. Decisions are shifted through a slow, deliberative process until faculty, administrators, and trustees reach consensus. Belkin writes, the genius of the system is that it avoids the strictures of top-down control and protects academic freedom.

The richness he writes is that it is a recipe for stagnation.

Gary Stocker (07:19.15)
the digital revolution demanded a nimble capacity for academic, for the academy, for the academy, for colleges, so that students could learn a quickly emerging set of skills to meet changing labor market demands. And Belkin concludes, instead of adapting campus interest groups, that's a nice way of saying faculty protected their turf, and it's always happened, and for the foreseeable future, it's going to continue to happen.

And he adds many university presidents, and this is from Brian Rosenberg, who wrote the entertaining book, whatever it is, I don't like it, of course about faculty in large part. Rosenberg, I think writes many university presidents who pushed for new programs, the faster adoption of technology or the removal of undersubscribed majors, like we just talked about, undersubscribed majors face no confidence votes, which we also talked about from their faculty.

And I interviewed both Brian Rosenberg and Chuck Ambrose, who were at Colleges on the Brink last December. So it's possible that Gary Stocker here at College Viability scooped the Wall Street Journal. Eh, probably not. And it's faculty. Most certainly, college leaders and the boards have substantial responsibility for the challenges that many colleges face. Let's not ignore that it's the faculty. It's the faculty who, at the end of the day,

are leading our colleges and universities in their own way into this era of consolidation and subsequently of closures. They're intensely parochial focus on themselves and not their students and not their communities and not their world is not good. To go to blue and stick, we go from the Chronicle for Higher Education. This was on January 17th.

The story reads, the edge, her story, her newsletter, eight takeaways from the education department's chief economist. Now, I'm not going to read all eight. I've just got a couple. And the ones that I found, the ones that he found most startling, he listed eight, I'm going to talk about two, more than one third of 45 million people, one third of 45 million people. So do the math, that's 30%, give or take of 45. So that's 13 million people approximately. Now carry student loans.

Gary Stocker (09:44.394)
and they carry student loan debt, but don't have a degree. Just economic tragedy in so many ways. And then he also has one that I know the value and limitations of the college scorecard is what he talks about. I think the college navigator also fits in this category. It really lends itself to what we do here at College of Viability. And one of the things that we're doing, we talked about this earlier, is developing a product.

that will let our users, our customers compare the programs and major completions at each college and with any luck over a period of years. And right now it looks like it's gonna be three years. That's coming in 2024 sometime. I don't have a date for that yet. And it's not just one year as you can find in the college navigator. You can go now to your college, go into the college navigator and it has a program setting and I'll show you the completions. But it's not easy to compare one college to another. We're gonna fix that.

with our program comparison in the College Viability app. Hey, I don't think we have done no confidence votes this year. If I had music, I would play the music. And Cal Lutheran University, faculty vote no confidence in President Lori Varlotta. I am stunned. Isaiah Myrnaw and Tony Biasati at the Ventura County Star have this story. And the president, Lori Varlotta.

said the university will have a bit of a challenge for the next five years as it seeks to recover enrollment and balance its books. The drop has already triggered some belt tightening measures, the story reads, and the college president, Laurie Varlata, said more drastic cuts are possible. If the situation doesn't improve, I can amend that, more cuts are likely, no matter what. And read the story, I'll have the link in there. And

You know, I've talked about this before. From my reading and the work and research that I do, it's probably time to start nominating someone.

Gary Stocker (11:50.838)
at Cal State, Cal Lutheran, excuse me, Cal Lutheran University. It's time to start nominating someone to turn out the last light of Cal Lutheran. It may not happen soon, but it can't possibly survive with its current business model. Hey, and if we have one no confidence vote, let's have two. Jessica Harkay and Keith Fonel from the Conn it's like a website.

This is from the quote I'm going to read is from the Eastern Connecticut University president, I believe. And the quote reads, this vote was the culmination of conversations I have had with faculty leaders throughout the system. I'll save my sarcasm on that. There's a real concern about the direction of higher education in Connecticut, in particular for the students we serve. Okay, that's touching. Said William Lugo.

Eastern University Senate president. It's a system that is here to serve all students, and especially those from Connecticut, regardless of income, all students, he goes on, deserve the opportunity to attend a quality in-person, interesting part, a quality in-person, nothing more, no reference to online, in-person higher education institution.

However, he concludes the direction the system is currently headed threatens such a possibility. The Connecticut state system needs a new direction is how the quote wraps. Dr. Lugo, this is basic economics. This is supply and demand. There are too many college seats in Connecticut and throughout the country.

and not enough students willing to invest the time or the money to sit in those extra seats. There is no, there's not a no confidence resolution, Dr. Lugo, in the world, that will change that basic economic fact. A quick merger announcement, a quick merger story. University of Redlands announced a merger this week.

Gary Stocker (14:11.058)
It was two small colleges, small liberal arts colleges in California. Good for them. They're taking a really small step for mankind. Two small colleges is probably not enough. Mergers in my mind need to be to scale something along the line of 10 to 12 to 15 to 20 colleges. It will happen. I don't know how soon that will happen. And then I think I talked about bonds last week. I'm not sure. Check my notes. But I have a story about struggling, a struggling Midwest college.

strikes a deal with bondholders. This comes from Amanda Albright and Nick Corollo, excuse me, from Bloomberg. And Lake Erie College, we've talked about them before, which has 700 undergraduate students, is the latest small college to see its financial struggles extend into the municipal bond market. Lake Erie College sold about 30 million bonds in debt in 2019 to finance.

a barn and other projects at its equestrian center. And then Lake Erie College did not meet a required debt service covered ratio, it's a financial term, it's a common one, which is considered an event of default. This is according to regulatory filing. The school also only had seven days cash on hand. That's scary. Seven days cash on hand in fiscal 2023 while it was required by the covenants in the bond, it was required to have 25 days as part of the bond deal.

So the school entered into a forbearance agreement with the bondholders, and as part of that forbearance agreement, the investors holding those bonds agreed to not take certain actions against the borrowers like Erie College, such as demanding immediate repayment. That gives the stressed borrowers like Erie College and many, many other private colleges time to shore up their finances. That's probably a pipe dream. And the story concludes with the specific terms of the agreement have not yet.

been disclosed and this is almost certainly happening. It is happening at many, many other private colleges. They're just so far able to stay above the media radar. And in my conversations with bond experts, they suggest the frequency of these covenant defaults will increase. Whether bondholders call their loans due or not is another story in its entirety.

Gary Stocker (16:39.318)
And then our final story for the week has to do with Goddard College in Vermont also, interesting trend there, will become online only, dash temporarily, comma, at least. And this was Anne Wallace Allen for Seven Days Vermont. I think it's a web news service. And I'll read from her reporting, Goddard College in Plainfield, Vermont will eliminate its on-campus residency programs this fall and they have dozens of members of staff and an effort to stay afloat.

The online model is just an experiment and not necessarily permanent. President Dan Hocoy said when he described the upcoming changes to the college in a letter last Friday. Any references the same thing we hear from every other college president. Inflation and increased maintenance costs continue to make it progressively more difficult to maintain a fully operational campus. Blah, blah, blah. Now it is important to note and to be fair that Goddard's model

already includes distance learning with occasional residencies. So this isn't the traditional model with students living on campus for 15 weeks, 18 weeks out of a year. It looks like in the case of Goddard, it became too expensive in some form or fashion for these colleges to come to campus for eight days. So they're going exclusively online. What impact that will have on their enrollment and their capacity to charge profitable tuition rates remains to be seen. So

Is it time to turn out the lights? Not today, but it's probably not too far off. And then when we look at this week's news, I'll say it again, college is a worthwhile investment of time and resources. Absolutely no question, not for even a second. But that investment should be

Gary Stocker (18:38.35)
a demonstrable, demonstrable financial health. And second, I think with a four-year graduation rate that is above 50 percent, or is at least trending in that direction. And the 2024 College Viability App for private colleges will be out shortly and will track the graduation rates and everything else from 2015 through 2022, the last reported data that just finished coming out last week. And there will also be institutional versions.

with about 30 comparisons, kind of the high end version for leaders and boards, along with special versions that we're going to also continue in 2024 for faculty and staff, for students and their families. And both will have just a smaller number of important reports for those groups. And for faculty, use the College Viability app to prepare for your conversations with your leadership teams. Don't go in blind. Don't try and figure out IPED yourself. Don't try and figure out financial statements yourself. Use the comparisons we make available.

in the College Viability app and go have those conversations today, should have been yesterday. And then for students and families, grab what I'm going to make an affordable copy of the app just for your purposes to make sure the colleges, the colleges you are considering are financially capable of providing you with the college education you desire. Hey, that's a wrap for the January 22nd, 2024.

episode of This Week in College Viability. My name is Gary Stocker. Let's do this again on January 29th. We'll talk to you then.