This Week In College Viability (TWICV) for October 14, 2024

Gary (00:02.374)
It is this weekend college viability news and commentary for October 14th. Well, it should have been for October 14th. It's really October 16th. Let me just tell you about taking technology on the road. It's kind of a problematic adventure.

I, for the first time, I took college viability on the road. I was at the American Association of University Administrators Conference in Indianapolis the first couple of days this week. And I recorded this on Monday, but the hotel bandwidth wasn't sufficient to get the MP3 file downloaded. So this should be my best podcast ever because I've already done a full dress rehearsal.

my, and I want to start off this week's podcast with a personal observation.

Last Sunday, I watched some 40 to really 50,000 people run in the Chicago Marathon. It was a spectacle of humanity to see so many people invest so much into a challenging endeavor like running 26.2 miles.

Gary (01:15.016)
As I was watching those tens of thousands of souls, it was easy, because this is what I do, it was easy to make the connection to a higher education number. 40,000, and there were more runners than that, but 40,000 is about the same number of college students impacted by college closures over the last few years. Those colleges have closed and some 40,000 students have impacted. That number is almost certainly to grow in the next coming months. And countless times.

as my family traversed the marathon route in Chicago, jumping on trains and walking and supporting a loved one, I saw so many times the excitement of people recognizing their loved ones. They were running and the screams of joy that came from their family members, loved ones of some sort or the other. And as I reflected on those encounters, I couldn't help but think about

how many closed colleges are taking away that same joyous scream from thousands of their students and families and other loved ones. So for those of you, and there are some, who write off the small percentage of college closures as not a big deal, no impact on the overall market, you're missing badly, you're missing the human point.

These are thousands of hopes and dreams being shredded by colleges, shredded by colleges that should not be in the business of higher education because they don't have the resources to do so. So grab a seat at the Chicago Marathon next year, the Boston, New York, whatever marathon you want. Watch.

Some thousands or whatever the number is, thousands or more human beings pass you by as they engage in that challenge of challenges, just like college is. And college viability exists to provide financial health and viability comparisons for about 3,000 public and private colleges. I would like to see every student graduate from their college of choice.

Gary (03:38.1)
But like we saw with the marathoners, on a positive note on Sunday, so many touching moments of joy. Too many will not be able to graduate from the college they started at. So talking about colleges in trouble, let's get at it. This week, let's start with layoffs and cutbacks. And the College of St. Rose files for bankruptcy. And this was last Thursday. This is by H. Ro Schneider.

in the Times Union. I don't see a city reference on that. It was a long way to step and not a big surprise. But here's what was in party announcement. The colleges filing the U.S. Bankruptcy Court for the Northern District of New York list assets for St. Rose, the College of St. Rose, at an estimated $100 million. I'm rounding up. And debts of about $56 million. I'm rounding up also. The college is almost broke. The note goes on. The college, the College of St. Rose is almost broke.

and it's seeking court permission to take out a 10.8, almost $11 million loan to cover its operations and prepare for selling its properties. So it's got assets, somewhere in the vicinity of $40 million in excess assets, but no cash available to take care of business, to actually finish closing down the operation. It's a sad note. It's not an unexpected note. But again, it begs the question, how many more times am I going to report stories like this for colleges who aren't doing the right thing?

And when the dollars aren't there, as soon as they know that, it's time to get out. Drexel University in Pennsylvania lays out a plan for cuts in the face of $63 million in operating losses. And this was in the Philadelphia Inquirer on October 10th. I don't see a reporter's name on this. Drexel University, during a meeting with its employees Thursday, outlined plans to cut and freeze some salaries slash benefits.

and implement a reduction in the workforce this November. As we often see, the story goes on, the university did not say how many people could lose their jobs, but it said it depends on the success of a voluntary retirement incentive program and how many vacant positions can be eliminated. Interesting that the decision on how many lay off is dependent on others willing to get out.

Gary (06:04.576)
It's probably a logical approach, but it's a sad approach as well. On to St. Louis Public Radio. On St. Louis University, the headline reads, St. Louis University faces budget deficit. This is not new news. Plans to cut $20 million in expenses. I had this story a couple of weeks ago. academic and administrative divisions at St. Louis University are expected to cut expenses by about 4 % or to about $20 million.

The news on this is the deficit reported by the college, by the university, the deficit is largely due to a sharp drop in international student enrollment. Last fall, fall of 23, the university enrolled 1,400 new international graduate students. I assume most of those paid full freight, full freight. And most of them did indeed pay the full tuition of $36,000 or more. This year, the university expected 1,300 and only enrolled about 300, so 1,000 short.

They go on, the university goes on to blame the US government for far fewer visas, maybe, maybe not. The source on this is David Heimberger, who's the St. Louis University Vice President and CFO. Now remember, the number of 4 % that I just talked about, it was 2%. As late as early September of this year, not even two months ago, it was 2 % cut. So I figured, $10 million, which is not much more than couch money for that college, for that university. But again, the...

The part that gets me the most, this is a strong college, this is a good college. It graduates lots and lots of high, high, high percentage of students and it still has substantive, materially significant challenges. Now of course, St. Louis University isn't going anywhere. They will be around forever, but it's a strong college and their college is much, much, much academically weaker than St. Louis University who are not upfront.

with their faculty, students, families, communities, at least give St. Louis your credit, they're up front. Page two, had an interesting call from a higher ed faculty member with a story about cancellations for a conference I think they were scheduled to attend on the West Coast. Attendees, so the story reported to me was, attendees were canceling because their colleges had cut or decreased their continuing education funds for the year. Okay, nobody's gonna fall over in shock.

Gary (08:30.368)
from that story, but this is yet another indication, and maybe a minor one, that suggests that there is a scaling back across the board of public and private colleges across the country. Now, another source, different source, shared with me that faculty, this is interesting, that faculty at their school were working to enhance their own departments, working to enhance their own departments, almost certainly at the expense

for the greater good of the college. I'll have more on that topic in a later broadcast sometime in coming weeks and months.

Fitch Ratings has a headline, pressure mounts for US colleges as students head back to school. Now this is kind of contrarian because I've talked about the last few weeks, how many colleges since mid August have announced exceptional enrollment. They're doing great things and everybody's going there because they have a great college. And I'm sure that's true in most cases, probably not all. Some are probably spinning it to the point just so they can delay closure. That's just educated speculation on my

Fitch ratings on October 11th out of Chicago, a modest uptick in this fall's enrollment will not be enough, Fitch says, will not be enough to stem intensifying pressure for many US colleges heading into 2025 and likely beyond, according to Fitch ratings analysts. A closer look, they report, at overall steady enrollment expectations for 2024-2025 reveals clear winners and losers. And I've talked about this before.

The source on this is a senior director for Fitch and I've reported from her data before. Her name is Emily Wadwani. She's head of Fitch's US public finance and higher education group. She says, for example, some flagship public institutions, selective private institutions and HPCUs are achieving record enrollment numbers. And I've talked about this. Conversely, and this is kind of the no news is bad news, conversely Ms. Wadwani shares.

Gary (10:33.824)
Many smaller, less selective colleges continue to see their enrollment decline. Ms. Wadwohani's sources are probably much better than mine. She's a little bit slow getting out the gate, but she's just confirming what I've offered for many, many weeks, if not many, months now. And I don't think she even references the fasted debacle. And the other thing she said is institutional discounting levels have ticked up. All right.

It's good to see her documenting that. It's a likely scenario in either case. Discounting, Ms. Waddu-Ahani says, is at its steepest for every incoming freshman class, which then becomes a trailing reference point as those students head towards graduation. Now, this is what Matt Hendrick talks about all the time. One bad class, whatever the year, 2024 or 2014, one bad class, either with enrollment or tuition discounts, merit aid, scholarships, whatever you want to call it.

lives on the books of a college for four years. One bad enrollment year is not, doesn't exist. One bad enrollment year is four bad enrollment years for that class. And while most Fitch rated colleges maintain stable outlooks, the downward outlook revisions that reported by Fitch, the downward outlook revisions have risen over the last several quarters. This could indicate, again, according to Fitch, more downgrades are ahead.

particularly for colleges unable to maintain positive operating performance. And again, when Matt Hendricks and I do the Tuesday, the college financial health show, Matt's showing you this stuff. Ms. Wadduhani is doing it at the macro, looking at the macro level. Matt and I look at the college by college level, and we're just showing you which ones. Ms. Wadduhani and others just saying big picture, it's gonna happen. Matt and I tell you which ones are at greater risk just by showing you the data.

just by showing you the comparisons. And again, this ties in with what I talked about at the conclusion of last week's podcast. Many colleges are reporting strong enrollment numbers. I don't doubt that. In most cases. Many, many, many more are not. They are silent on enrollment. And we know why. They don't want to report bad news. They don't want to create a perception that their college is in trouble. And some won't be. Some will be. Again, I remind listeners at enrollment,

Gary (13:01.512)
does not pay the bills, that certainly helps. It is the net tuition revenue though, from the enrollments that do so. Ms. Wadruhani says tuition discounts are up. It will be interesting to see which of these colleges since mid August reporting exceptional finances in the coming weeks and months, either report cutbacks, layoffs, or even closures. Now, Wittenberg University sends fall 2024 enrollment data to its bondholders.

Now, this had to be embarrassing for Wittenberg University. They have bonds and as part of the requirements, because Wittenberg did not meet some of the covenants of that bond, the bond holder said, hey, you gotta show us your enrollment numbers for 2024. They were down. They were down about 200 students.

down about 200 students. And again, Matt Hendricks and I on the College Financial Health Show had a, Matt has serious and substantial analysis of Wittenberg's financial situation. And you got to wonder what the bondholders will do when they see enrollment. It's not just down for this year, but it's been trending down, I think for the last four or five years, according to the document that Wittenberg itself sent to its bondholders. Page three. goodness, another tuition reset.

Hang on while I wipe the sarcasm off of my mouth. Touting transparency. Hartwick lowers tuition by 60 percent. This came out of best colleges dot com and Dr. Mark Drozdowski at best college. They do some good stuff. Best colleges. Here are the bullets. Hartwick College will reduce its tuition. Now get these numbers from roughly fifty six thousand. Yes, that's five six thousand to twenty two thousand.

Let get my fingers and toes out. is $34,000 reduction.

Gary (15:02.922)
And this begins in 2025. It's part of a rebranding strategy. The tuition reset aims to add transparency to college financing and save families money, maybe. Heartwork hopes to attract more families opting for public universities with this lower price. I don't know what that means. And of course, Heartwork joins a growing number of colleges lowering tuition costs. That's not true. They're lowering the list price.

and I still, know, the hard work is going down to 22,000. What happens this year and next year, the year after when a student wants to go to heartbreak and they say, well, I've got another offer for $19,000 in tuition. Can you match that or beat that? And if heartwork stays true to their transparency, they'll say, no, sorry, we can't do the 3000.

They're welcome. know, colleges are welcome to do whatever they want. And even in this case, the story didn't say is this thirty four thousand reduction for all students in all four years of their grade, their college years at Hartwick? I assume so. And without fingers and toes, it's a 60 percent reduction in the list price of tuition, probably very similar to what the high tuition price and a high discount model was at at Hartwick. they're that

those details weren't in the stories. Antioch University and Landmark College announced a new partnership. All right, good for them. So I went into the financial statements. And this is what caught my attention. The financial statement for Antioch University comes from, it was listed as the Coalition for the Common Good, the Coalition for the Common Good doing business as DBA Antioch University.

Now I've not heard of the Coalition for the Common Good. If somebody has, feel free to drop me a note to my email address, gary at collegeviability.com.

Gary (17:05.204)
It just makes me question what's going on here. Not necessarily for the worst, but it could be. When I read their mission statement, a quote from the story, I'm going to read it to you verbatim, no editorials. So the Coalition for the Common Good Doing Business at Antioch University and Landmark College, here's what they said, together, we have the opportunity to transform counseling and education for neurodivergent people by preparing knowledgeable and skilled professionals.

who value accessibility, equity, and inclusivity, end of quote. I have no idea what that means.

Three public Virginia universities have some viability risk. This comes from VirginiaBusiness.com and Beth Jojak, believe, Jojak, on October 8th. Radford, VSU, and Mary Washington are not in danger of closing the subheading reads. The heading reads, the title of the story reads, three Virginia universities have some viability risks, but those three are not in danger of closing. Now, that's what I want to talk about for this story, but here's what caught my attention.

And this is essentially a meandering article citing negative enrollment trends. And of course, they're all across the country and the responses of each of the colleges quoted referenced.

But it does show that at least in Virginia, at least for public colleges in Virginia, somebody is watching the college store.

Gary (18:41.49)
It does potentially suggest that the higher education market, maybe cross your fingers, cross your legs, is moving to an era of improved accountability. And I'll have a story for you, I think, next week on a conversation I had in Indianapolis this week with the college leader about accountability. Page four. This is from the James G. Martin Center for Academic Renewal. And I've used their stories on occasion. And F. Andrew Wolfe wrote this story, released this story on October 9th.

universities are doing education badly as a headline by regurgitating high school curricula and ignoring the virtues higher education is delivering a flawed product. Again, this is from the James G. Martin Center for Academic Renewal. From the story, suffice it to say in the West today and especially in US that's in the story, a type of a type of schizophrenic malaise. Yes, indeed, schizophrenic malaise.

has crept into colleges due primarily, this is a fascinating point, due primarily, Mr. Wolf says, due primarily to an ineffective K through 12 system. And over reliance on developmental college curricula and general course requirements, he says that essentially reiterate or redo high school learning.

He quotes some numbers about half of US adults, 51%, say the country's public K-12 system is generally going in the wrong direction. Okay, surveys do what surveys do.

College residence, Mr. Wolf shares, college readiness for students has declined. And now only one in five who take the SAT test, one in five, 21%, little higher than one in five, is ready to succeed in college, in core college introductory classes. Yet he goes on, some college students are expected to move.

Gary (20:46.08)
toward what secondary education experts call specialization. All right, that's inside higher education crap stuff, excuse me. By selecting a major course of study, whatever that may be. In the pursuit of any such degree, college undergraduates must also take a core curriculum that's been around for forever, which again, he makes the case is comparable to a high school course, to a high school course of study. Consequently, Mr. Wolf makes the point.

Due to time constraints, students receive insufficient instruction in their specialization area, thereby creating a need, felt need, to pursue further study at the graduate level just to be competent in their specialization.

Gary (21:31.156)
The United States, he says, has a daunting 39 % college dropout rate. I thought it was a lot higher than that, but we'll use his number. Underpreparedness is surely to blame in large part. College undergraduates, this is important, college undergraduates spend time and money taking general education courses under the guise, general education courses under the guise that these will make their education and therefore them more well-rounded.

He goes on, yet these courses offer only a superficial treatment of subjects that should have been mastered, should have been mastered in high school.

Given the testing results we talked about, the one in five, and the dismal college completion rates, the only thing that truly get well-rounded, I think he has some sarcasm here, the only things that truly get well-rounded are the coffers, university coffers, university financial coffers, into which student tuition and money flows, amounting to thousands of dollars worth, thousands, probably tens of thousands of dollars worth of wasted time and effort.

And regular listeners will know I'm all over how bad the four and six year graduation rates are in this country. On occasion, I've referenced that a significant culpability lies, I believe, with the K through 12 education system. But that topic is way, way beyond the scope of what I want to do at College of Viability. But what we are seeing, I think, I believe, in the Martin Center story is a concise telling of where this country is with higher education. A poor K through 12 system.

really poor K through 12 system overall, there are exceptions. A poor K through 12 system followed by a higher education system whose main focus, whose main work is to drive incremental revenue. Nothing wrong with that. Drive incremental revenue by reteaching high school stuff. I can make the case there's something wrong with that. It's evident to me that the market somehow knows that the value of higher education for too many

Gary (23:43.39)
of its students is not much more than reteaching high school stuff.

And I don't doubt for one millisecond that is part of the negative perception that the market has for higher education.

I'm going to hold off on any rap this week. I want to ponder for the next few days what I experienced at the first ever higher education conference I went to with college viability on the road. And I will say, I always appreciate the opportunity to be in the presence of higher education professionals. It helps me focus on what matters in the bigger higher education picture. And I'll have more about that in the coming weeks as well. Until then, thanks again for listening. I'm always grateful for your time and your support.

Until then, this is Gary Stocker with College Viability. We'll do it again next Monday, because I know I'll be in St. Louis. We'll talk then. Take care.