This Week In College Viability (TWICV) for Nov. 13, 2023 Grad rate teases, marketing or gimics?, Leadership 'atta-boys'

Gary (00:04.07)
It's this week in College Viability for November 13, 2023. Good day, my name is Gary Stocker. And let's start off with an interesting set of analogies. And you know, we talk about the deplorable state of graduation rates in American colleges. And my friend, Kate Colbert offers these analogies because remember, graduation rates in United States are way, way too often below 50%. So here's the first of Kate's three analogies.

this car there's a 50% chance it won't even run four years from now. Well what about the iPhone? Just spend $1,100 on a new iPhone? No warranty. If it arrives dysfunctional, try rebooting it for four years and then we'll tell you we're sorry it didn't work out. And finally, hey I spent $250,000 on a house and paid your homeowners insurance premiums and then it burned down.

Oh, yeah, sorry about that. Nothing we can do.

Maybe home ownership just wasn't for you. It isn't for everyone. I'm sure though it made you feel more well-rounded while it lasted. And that's a priceless investment. Thank Kate Colbert, those are good analogies. And the first story today is, can free graduate tuition boost undergraduate enrollment? This is from Katherine Palmer, an Inside Higher Education leader, Inside Higher Education. And Kate talks about the program where

a college is offering a program where students are able to get a free graduate degree if they enroll at that college for an undergraduate degree. Now this is kind of a reverse loss leader. I'll pay now to get something later and I'll be honest I...

Gary (01:56.694)
I don't see the logic in this. I did some quick math on this. And this university, and I'm not naming it today, is potentially walking away from about 1.4 million per year in graduate student tuition revenue. This is based on the numbers.

And I didn't really see any reference to where the research behind this idea came from. This is kind of one of those hope strategies, or maybe, maybe along the lines of throwing education mud against the wall and see what sticks and what the heck. I'll tell you what college that is. It's Spring Hill College in Alabama, whose FTE undergrad enrollment has been down about 200 students over the last eight years. The twist in fee revenue down a little bit, about 1.3 million. Their endowment has gone down.

million. And again, that tells me or suggests maybe Spring Hill College in Alabama is spending their endowment to keep the lights on or to meet payroll. The other option, of course, is bad investments. So they're trying something. All right. Credit due for trying something. But is this again, just kind of what I've said many times before, an example of managing by public relations and the lingering question with the model?

is, and this is from Jeremiah Nelson, who's at Catawba College in North Carolina, is how many of their students enter the door wanting that master's degree? Now, it's probably a decent number, I know from experience, because to the folks at Spring Hill College, if they're offering something they don't value, then what does it matter whether you're getting that graduate degree or not?

And then something I learned from my mother-in-law many years ago, you get what you pay for. And if students are paying nothing, if a student doesn't have any financial skin in the game, how might that impact the graduation rate for these students? Will they be taking out loans for other things, for living expenses or other non-tuition costs associated with a graduate degree?

Gary (03:55.738)
and what will be the incentive beyond the obvious degree if their graduate studies requires no upfront investment from them. And Mike Nitzel, Michael Nitzel, I apologize, who's a senior contributor at Forbes, took the same story and his comment was this, how much impact these tuition offers, how much impact these tuition offers will have

On enrollment yields is uncertain, Michael Neitzel says. The track record for tuition resets is sketchy at best, and we've talked about that before. And while free tuition might help sagging enrollment recover to a degree, they do little to help a college's bottom line, that net cash, net materially significant net revenue to that bottom line. And then along the same lines, this is from Emma Whitford, also at Forbes.

This headline reads, hundreds of colleges now offer automatic admission to students. And I get it. The higher education market is adjusting. I, I'm just here to help listeners think through the implications, both good and bad. So from the previous story, if you can't incentivize students to enroll, why not skip the admissions process altogether? Just say, you want in, you're in. Now there are some, there are some standards, there are some thresholds. I understand that.

But what's going on is we continue a race to lower the bar to go and get into college on the false premise that college is for everyone. And we do this just as the market is telling us in countless surveys and countless reports, the market is telling us that college is not for everyone. In the same article, Emma Whitford from Forbes.

uses the 2023 Forbes financial grades data for the 70 colleges with direct admissions for those students that create an account in the common app. Now I looked at the data briefly and of those 70 some odd colleges there were a few with Forbes grades of A but many, many more with low Bs and even Cs, even some low Cs and some of that. So I, is this a mud against the wall approach?

Gary (06:15.422)
Maybe. Are they trying something different? Yes, credit is due for that. But I... Our focus here at College Viability is on financial health and, of course, viability. And I've got concerns. I've got legitimate concerns that this buy now, hope to be paid later approach is problematic at best. But let's assume that this direct admit model works. Enrollment ticks up.

New sections of classes need to be added. New faculty and staff need to be added to support those new students. Where does the materially significant new net revenue come from to pay for those new classes, those new sections, those new faculty, those new staff? Could we be looking at a scenario where enrollment and cutbacks are both up?

we'll be looking at a scenario where both enrollment is up and the cutbacks are up as well. It'll be interesting to follow, and we'll do that for you here at College Viability. A closure slash merger last week, and this is Multnomah University. It is merging into Jessup University. And Oregon is not on my high risk state list. Maybe it should be, because this is another Oregon College closure. There has been right off the top Merrillhurst.

the Oregon College of Arts and Craft, go figure, and Concordia University, and now Multnomah College, Multnomah University, excuse me, have all closed. So heads up to those of you considering Oregon private colleges. And then Multnomah fit the profile, 600 students, the endowment was less than 10 million. Now the good news on this, and there is good news, is that it will become a satellite campus of Jessup University. Now I went to the college viability app and did a quick glance,

Jessup looked strong. They appeared to be both financially and outcome, with that graduation rate solid as a private college. And now to President Jessica Taylor.

Gary (08:25.47)
She said Multnomah's leaders considered a range of options, such as budget reductions and outsourcing shared service arrangements with other colleges. But listen to this part. But with, but all of those.

President Jessica Taylor of Multnomah says, but all of those were band-aids to the actual fundamental problem, comma, the business model. She said, thank you, President Jessica Taylor, for being one of the precious, precious few to acknowledge the obvious. And in a follow-up, Doug Letterman from Inside Higher Ed, I believe, made a mis-comment regarding the story from Jessica Taylor. This should be a nominee for the most transparent presidential

statement to date. Indeed, Jessica Taylor knows what's going on. Sad that her college is not going to make it. Maybe she can bring value to another college as her career moves forward. And let's go just down the street to Fontbonne University here in the St. Louis region and the headline from St. Louis Today and Blythe Bernhardt from November 8th reads Fontbonne University molds cuts amid plummeting enrollment and revenue. If only.

The good folks at Fontbonn University were wise enough to mimic Jessica Taylor from Multnomah University. Fontbonn is a private college that fits the pattern of other colleges that ultimately closed.

Their full-time equivalent enrollment is down. Tuition and fee revenues are down. Again, this is over the last eight reported years. Graduation rates are poor. There's a diminishing endowment. But you know what? They tried a seven person football team to save them. Sarcasm on my part, didn't work. And I was actually quoted in this story. I got a call from Blythe Bernhardt. And here's what I said to her and it was published in the paper. And I will, I've shared this before on the podcast and I have to think I'll continue to share it.

Gary (10:24.914)
And I quote from me, Gary Stocker, the university's leaders should be fair to the students and to their faculty, to their staff, and to their community and say to each, it's time to find another college and or career opportunities. Bradley University is the next story. And they're offering their story last week in some inside higher, I'm sorry, from higher ed dive was Bradley University looks to cut over 20 programs and 68 faculty positions.

Now on the surface, this kind of reads like the typical story that we have. And I've got another story coming up on highlighting cutbacks here in a minute. But when you look at this, Bradley's doing OK. Their enrollment has been mostly flat, their undergrad enrollment for the last eight years. Their graduate enrollment is up about 500 students. Their tuition and fee revenue is down not quite $4 million.

They're not reporting unfunded institutional grants discounts. That concerns me a little bit. Yet their endowment is over, the 2021 endowment is over $300 million. The total expenses are up about 9 million in the last eight reported years. So when I look at this, it looks to me like they are trying to get ahead and stay ahead of the demographic cliff. Now I did my own little study on another project I'm working on.

and I used the data from the college navigator with five Midwestern private colleges, I'm not gonna name them. And I looked at those five Midwest privates in the same majors that Bradley is proposing to cut. All five colleges in the five reported majors Bradley is proposing to cut had a total, had a total of only 125 students.

And off the top, that was economics, French, mathematics, philosophy, and physics. Those five decent sized Midwestern colleges had a total across those five majors of only 125 students. Now, let's go back to Bradley and there will be protests. I haven't seen the stories yet, but it'll happen.

Gary (12:42.642)
just like there are every time a college even thinks about changing its product offerings or business model. But my experience in reading this data tells me, though, that Bradley University leadership is probably doing the right thing. Faculty and students can protest all they want, and they will. But I'm going to introduce a new term here. And I haven't done this before, although there's probably been opportunities to do that.

I propose giving the college leaders at Bradley University the first ever college viability leadership attaboy. No gender bias intended. I don't have a trophy made up. Maybe I'll put something together for that, but it's a tough time. And I understand if I were going to college at Bradley University or had a child going to college, I would be distressed. But these college leaders have that fiduciary responsibility we've talked about many times before.

Their obligation is to look out for the best interests of that college right or wrong for the foreseeable future. And to the folks at Bradley, take my leadership at a boy for what it's worth. I think you're on the right track. From small, from medium sized college in the Midwest to major power five college in Arizona.

And this is from the Chronicle, this one from Cali Murray on November 8th. The headline reads, the University of Arizona has a major problem with finances, its president says.

Now I know from my conversations with college presidents that almost every sport offered is a financial non-winner. By the time you add up labor costs, travel costs, game day costs and more, every sport outside of some of the Power Five colleges, every sport is a financial drag.

Gary (14:38.09)
And now I'm not even considering the scholarship costs because those are non-cash costs. There's no money transferring from one fund to another. Student athletes sit in classrooms paid for by non-student athletes, that's a fact. And there is rarely any incremental cost associated with an additional athlete sitting in English 101 or Math 101 or Biology 101. Those courses,

are paid for by students not on full scholarships.

The University of Arizona story made it onto the podcast today because it is indeed a strong power of five college school. But nonetheless, President Robert Robbins announced last week, and I quote, now the athletics department is going to require some draconian cuts and we're just going to have to live with that, Robbins said.

It's possible, he continues, Arizona will eliminate some of its 23 sports programs. Now there's more details going on behind the scenes. I'll include the link to the story in the podcast notes. But in the category of what happens if.

And back up for a second. The category of what? Let's look at it this way. President Robbins went on to add, the university has been losing money from its generous financial aid policies. He continues, it costs around 20,000 a year to educate each student. All right, we'll give him that. But in state students pay an average of 5,000. Do the math, 20 minus five is 15,000 loss per student.

Gary (16:15.066)
And he had students with high school grade point averages about 3.75, pay nothing. We lose money on everyone, President Robert Robbins added. And here's the g-sh part, maybe a double g-sh. I have not really understood that, he said, as well as I should have. President Robbins says I really...

have not understood that as well as I should have. And I trust that President Robbins is sending a thank you note to every tax paying citizen of Arizona for subsidizing his losing business model. And that's not even the point. It's quite likely that dozens, probably most, Power Five colleges are looking at a familiar or similar financial scenario. So what happens?

If we reasonably speculate that other colleges start thinking about eliminating sports programs that cost money, I'm not going to even pretend to identify them. But where does it begin? What sport do they start with? What kind of losses must they be incurring? But more importantly, where does it end? Could we be looking at a day and then probably not too distant future when college athletes outside of major sports

football and basketball mostly, actually have to pay fees to participate in their sport.

be it Division I, NCA, Division I, Division II, Division III, NAIA, or others. And if it develops that way, if there is a cost associated with playing lacrosse, for example, what will be the consequence for those talented student athletes who can't afford to pay for the sport they have spent so much time learning to excel at? Stay tuned. I think there'll be many, many more stories like this.

Gary (18:18.69)
in the coming weeks and months. University of Wisconsin in Green Bay, it's cold up there, considers discontinuing programs, citing student demand and budget constraints. Now, this is from Joe Schultz from Wisconsin Public Radio, and Schultz reports that University of Green Bay, despite having released exceptional enrollment numbers last year, is looking at cutting back programs.

And so these two interesting stories tied together. And with all of the higher education trauma in Wisconsin, I really have to think that for the second time this week, we have to offer a college viability leadership at a boy to those at the University of Wisconsin Green Bay.

They're just trying to get ahead of the game. They've got good enrollment growth. Now, you've heard me say before enrollment growth doesn't mean that much. How much in tuition discounts did the University of Wisconsin Green Bay have to give out to get students to go up to cold Green Bay? It's not reported in the story. And we won't see that data for a better part of a year or two when it's reported to the IPEDS database at the National Center for Education Statistics.

And there'll be protests. I haven't seen them yet because this just happened. And we've talked about this many times before. And a quick look at the courses that are going to propose to be discontinued are the ones I've seen and listed elsewhere. They are typically low enrollment, low volume course majors. I'm going to continue to follow the story at both Bradley and University of Wisconsin Green Bay a little bit more closely than usual. Usually it's a one and done kind of report.

Gary (20:13.302)
because it's reasonable to believe that both of these college leadership teams are on the right track. And guys, it's been a whole week and yet Birmingham Southern College is still making the College Viability, the This Week in College Viability podcast. I'm just going with headlines today. I've shared the details enough. If you wanna look up previous podcasts about Birmingham Southern, they are on our podcast page. And...

The one that caught my attention, and this was from November 10th, by the WRBC and Guts Radio staff and Tristan Rupert, and it reads, Birmingham Southern lands potential $5 million investment to keep college open. Now, this is the epitome of managing by public relations, because when you read the story, there is an organization, and the name escapes me, that will match with $2.5 million.

if Birmingham Southern can raise another 2.5 million. So there is no guarantee that any additional funds are coming to Birmingham Southern, but in a desperate attempt to stay in front of the news and report any semblance of good news, that's what they're going for. And then in the same topic, Marie Leach, L-E-E-C-H, who's the managing editor of the Birmingham Business Journal, wrote in a viewpoint article,

closing Birmingham Southern College would be devastating for our community, no doubt.

Gary (21:49.346)
But other businesses have closed in Birmingham, Alabama. Other businesses will close in the future in Birmingham, Alabama. As I understand that there are other colleges in Alabama and surrounding states. If a business can't make it, if a business can't generate enough net cash from operations year after year after year, they've earned.

the need, the right, the responsibility, the obligation to go out of business. Marie Leach is right, it would be devastating, but that's not the only devastating thing that happens in communities that lose colleges. And it's gonna continue. No number of managing editorials or viewpoints is gonna change the fact that smaller private colleges in the United States will continue to close. We look at the data here at College Viability.

We're right, we don't know the timeframe, that's tough to call, but there will continue to be more colleges. And so a new feature as we wind things down, because there are so many cutbacks and layoffs, we're going to add a feature called the cutback and layoff list.

And this week we have three colleges, because I just started putting this together a couple of days ago. Fresno Pacific University announced layoffs and program cuts of 10% of faculty and 16 graduate and undergraduate programs. Bemidji State University has zero margin for error. That was the headline. Before enrollment declines, forced cuts, but they didn't offer any absolute numbers and absolute courses, just that they're gonna be doing it. And then we talked earlier about the University of Wisconsin-Green Bay.

majors and minors. I think that's total. This is off of MBC 26 of a YouTube video that I saw. I don't know if it's six majors and six minors, but nonetheless, are cutbacks. And let's wrap things up with Columbia College in Chicago. And the headline is the college addresses recruitment and retention amidst faculty strike. And this is from the Columbia Chronicle. I think this is a student reporter, Sydney Richardson.

Gary (23:58.042)
And let's just do this. Let's just call Columbia College. Let's just call this. We'll call this the Columbia College Chicago Calamity. Seed of the fourth. Part time faculty are striking this as of November 10th because they're not getting enough courses to teach. In April, the college announced a 20 million dollar budget deficit for this fiscal year.

And as we regularly do at College Viability, let's go to the data. And this is from the National Center for Education Statistics and our own College Viability Database. Columbia College has lost almost 2400 students in the last year, eight years. Their graduation rates are substantially below 50 percent for undergrads after four years, substantially below 70 percent after six years. Their tuition and fee revenue is down more than 72 million from 2014 to 2021. Their

Unfunded institutional grants are up to almost 28 million. That means they're giving away the store. Their graduate enrollment is down not quite 200 students and their full-time retention is down nine points. They are sitting on a $200 million endowment, so they do have some values there, but let's do this. To the president at Columbia College Chicago, and its president and CEO, Kwang Woo Kim, we have one suggestion here at College Viability.

Call the presidents of Bradley University and the University of Wisconsin Green Bay for guidance and support. And to the protesting faculty and now the protesting students at Columbia College of Chicago, we have one suggestion for you as well. Call the presidents of Bradley University and the University of Wisconsin Green Bay for guidance and support. And I close with something I put together about a year ago.

And it's called the College Viability Manifesto. I spend a lot of time chastising and challenging colleges. That's what I do. The value that it brings is it provides you with a perspective. Agree, disagree. It's a different perspective. But I want to read to you because I'm going to ask for a favor at the end. So here's my College Viability Manifesto. And you can find it on the website. You can find it on the blog portion of the website. And I think I've got a YouTube video out there as well. College is good. Really good.

Gary (26:15.674)
Go if you can. The second one in the College Viability Manifesto is graduation is better.

Some colleges will not survive. Many will. Only consider colleges in comparatively good financial health. Your FAFSA tells colleges about your finances. The college viability app shows you theirs. Enrollment trends matter. Graduation rates matter even more.

Gary (26:54.486)
are important. Closing colleges will cost you a lot of money. And finally, support higher education in the United States. It makes a difference in lives. And the reason I share this is I'm starting to look for stories that I can do a more balanced presentation of the silliness we see for many college leadership programs with some positive stories.

And I went and tried to find some on my own and they just weren't what I was looking for. So if you've had a positive story about your college experience, I'm looking for recent ones. If you're 40 years out of college, I don't really want to use those.

a place where a college took good care of you, where they provided some wisdom and guidance that you don't always get. And drop me a note, drop me a note at gary at college viability, one word, gary at college viability dot com. And I'll ask for your permission to share that story on a future podcast. Might even be a chance for us to arrange for you to join me on a future episode of This Week in College Viability. So it's the end of another episode of This Week in College Viability. Thanks for making time to listen. Send me your questions or comments.

or concerns to Gary at College Viability. That's one word, garyatcollegeviability.com. As always, I will post the links to each of today's stories in the show notes. Until next time, this is Gary Stocker. Good day.