This Week In College Viability (TWICV) for February 12, 2024

Gary (00:02.778)
It's February 12th, 2024, and it's this week in College Viability. My name is Gary Stocker. Hey, it's Valentine's Day this week. And I want to throw a little love to Cabrini College, and I'll tell you why in a minute. And not so much love to Birmingham Southern Colleges, Birmingham Southern College and colleges who believe a snippet of data is a good thing. We'll talk about both as the podcast progresses.

We're talking about colleges turning to older students this week to stem the enormous crisis. Birmingham Southern, again, they're on my list this week. Scott Carlson has an interesting component to an article where he talks about what's really behind the view that higher ed isn't worth it. He's got a perspective that I try and enforce, and he does, I think, a better job with it than I do. The University of Arizona, all sorts of problems there. Their president takes full responsibility for financial woes.

I almost have a tear forming in the corner of my eye. Two colleges are spinning enrollments. Those are just the two that I found. Another story about athletics in the small college marketplace. There's a good component to this story and one I'm gonna focus on the financial piece. And Cabrini University, they're closing. Those that follow higher education, those that follow my media, know that Cabrini is closing their doors this year. But I'll tell you what, they're doing a good job.

They are taking care of their students. They're doing this closure process well. It reminds me of McMurray College here in Illinois, in Central America, in Central United States. Three or four years ago, they closed on very short notice and really did a good job of not only taking care of their students, but their college as well. And then Rick Seltzer from the Chronicle talks about a double dip enrollment cliff. And I guess that means that higher education has to fall off of potentially two.

enrollment cliffs that can't be a good thing and we'll talk about that. Layoffs and cutbacks just one this week the headline reads facing a six million dollar deficit. University of North Carolina Asheville to curtail adjunct faculty and look at entire enterprise the entire university enterprise. This is from Barbara Dure on February 6th from the Asheville Watchdog and the essence is the school's 25 percent decline in enrollment.

Gary (02:25.802)
over five years has led to a shortfall. And the chancellor says academic offerings will be assessed. That never causes anxiety. Looks like their deficit is projected to be 6 million this fiscal year and 8 million next year. Page two, colleges turn to older students to stem the enrollment crisis. And this is from Yahoo News. Alejandro Hohano-Domenich, again from February 6th of last week.

And the story reads colleges and universities across the United States are trying to enroll more adult, non-traditional, greater than 25 years old, I think students, as their traditional aged applicant pool grows smaller. The story continues facing a decline in enrollment and fearing that the decline could become a cliff as America's population of fresh high school graduates continues to shrink. Schools are offering flexible schedules, financial aid, childcare.

and specialized advisors in an effort to appeal to adults 25 years and older. OK, all right. Nothing, nothing wrong with reaching out to other markets. Nothing at all. And non-traditional age college students is certainly a viable market. But don't tell anybody. But let me give a tip to colleges doing this. Gather close to your speakers.

Don't tell anyone else you are working to enroll more non-traditional age students. Because then everybody is going to do a Jish. All right, yeah, it's a valid market, go get them. But if everybody does it, you're going to see the same challenges you see with the traditional student market. There will be discounting on tuition. There will be graduation issues. And I guess, you know, maybe even a bigger...

picture is, is there any way, sign me up for this, is there any way we could get some reporters to actually engage in deep thinking or even, even semi deep thinking on these stories? Too many reporters, and I've talked about this before, too many reporters are regurgitating college public relations drivel and calling it news. Next Shapiro, the governor of Pennsylvania.

Gary (04:43.902)
as a budget proposal that seeks funding to increase, to merge state owned universities and community colleges. Now, Pennsylvania, a couple of years ago, merged many of their public colleges and universities, and this is from Bill Shackner in the Trib Live on February 6th. And the governor, Josh Shapiro, is working to get funding. He's being innovative. He's trying some new things. He gets credit for trying. And the funding mechanism is addressed.

thoroughly in the story and I'll include the link in the show notes. But here is what's not addressed in the story. And I'll read the quote from Bill Shackner's article. The governor's plan, it's Governor Josh Shapiro of Pennsylvania, the governor's plan for higher education includes an outcomes based funding approach.

Gary (05:38.27)
Anybody ask the faculty at these Pennsylvania public colleges if they're OK with outcomes based funding? The story clearly avoids that topic. Tell you what, I'll do this. I will give a free copy to the just released 2024 college viability app that faculty will protest any link to their protest, any link to their performance. Free copy 2024 private college viability app.

on the assumption that some faculty member somewhere will protest this link to performance. Now, of course I'm being silly. Of course I'm being sarcastic. I'm good on the 2024 college viability app. You can find a college where faculty don't protest. You get the app for free. I'm guessing that faculty in many places, not just in Pennsylvania, will probably create something along the lines of,

make our funding based on performance because that's interfering with academic freedom.

They have to actually prove that their students are learning something. It's been my experience that they're not comfortable actually demonstrating they're being successful. Have I ever talked about Birmingham Southern before? Sarcasm alert. Birmingham Southern could get a second chance at a state bailout, at least a second chance, and Alabama bill would install a new loan administrator. Let me read that again. A new

loan administrator to replace the state treasurer who denied the college's application for a $30 million loan. This comes from Laura Sputaniak in Higher Education Dive. So Birmingham Southern and some politicians in Alabama, they don't like the referee's decision, so they want to hire a new referee. So I'm all on top of this. I'm all over this. I think what we need to do in conjunction with this is have a new basketball rule. We're in the middle of basketball season. March Madness

Gary (07:43.766)
A new basketball rule, yours from those politicians and others at Birmingham Southern College in Birmingham, Alabama. The new basketball rule is you don't like a referee's decision, like the folks at Birmingham Southern, ask for a new referee. I go to a lot of basketball games, referees are fabulous overall, they make mistakes, they miss things that aren't there, they see things that aren't there, they miss things that are there, it happens. So.

Let's see, if you don't like a referee's call, let's ask for a new referee. Now here's the downside. In the average college basketball game, probably at any level, there would probably need to be somewhere in the vicinity of 100 or more referees for every game.

That's the approach that some folks in Alabama would take to give, given their predisposition with hiring a new referee because they didn't like the no-loan decision for Birmingham Southern College. You know what? There's a Jish on that. I'm going with a Jish. I'm pondering a double Jish, but no, I'm sticking with a single Jish. And there's some details behind that. So of course, the state treasurer, a young boozer in Alabama had to respond to this. And he makes some points that are valid. And let me just quickly read them.

And this is from ALreporter.com, state treasurer, Alabama state treasurer, young, young Boozer, bio UNG Boozer.

Birmingham Southern College had significant ill-considered borrowing to build facilities from 2004 to 2010. They had a screw up on millions of dollars in Pell Grant awards. The endowment has gone down from $130 million or something much less than that. Their bonds have been downgraded by Moody's Investor Service. They've had eight presidents of the college in the last 20 years. They're creating serious, they created serious doubt, young boozers suggest, about the

Gary (09:35.998)
its future, Birmingham Southern's future, by declaring in December of 2022, a year plus ago, that it would close. And the enrollment has gone down from 1,200, close to 1,300 students, down to a little over 700 in 2023, a decrease of 43%. So I'm going to start a new referee school because I'm sure colleges will now want to do the same thing as those in Alabama and have a new referee every time they don't like a decision. I probably should have a sarcasm alert on some of these things.

Scott Carlson at The Chronicle on Feb. 6 also. His story was what's really behind the view that higher education isn't worth it. Now, the readers' digest summary of this is he makes note of a Wall Street Journal article, but then makes the case and does it well that college has value. So let me just kind of expand on that a little bit. So Carlson wrote, it's February 6 in The Chronicle for Higher Education, Chronicle of Higher Education.

A recent example appeared in the Wall Street Journal, which explored in quotes, why Americans have lost faith in the value of college. And it uses a broad brush to paint American higher education as a bloated system suffering from its own blunders. All right. It hits on a theme frequently seen in both mainstream and social media lately. Carlson writes, college isn't worth it. And he goes on to add the reported Douglas Belkin for the New York Times.

Recap 60 years of higher education history, drawing on a thread through the demise of vocational education, the digital revolution, intransigent faculty, profligate administrators, employers not being happy with the graduates that come out, and in disengagement of students, cheating their way through school. This is from the New York Times and Doug Belcombe. Well, that's fine. We've seen that kind of stuff before, but here's where Scott Carlson reinforces what I think is an important point.

And I'll read from his article. But despite its problems, Carlson writes, American higher education has demonstrated its usefulness and is still valued by large swaths of the American public. In a Chronicle survey, he cites, of the public perception of college, nearly 80% of those who had graduated said college was worth the cost, while about the same share of all respondents.

Gary (12:02.622)
recommend college to a friend or relative. Absolutely, positively. And listeners to my podcast and readers of my post will easily note that I am always hard on higher education. I've done that for the first 10 minutes of the podcast today. And I've shared the reasons before and I will continue to do so. That's the role that I play. I believe in what I talk about, but.

Carlson says it well, college is valuable. College is really valuable. My own college viability manifesto starts with, college is good, period, really good, period, go if you can, period. It does add a couple caveats, graduation is better. And you've heard me talk about colleges not graduating, even half their students. And I also conclude with in my manifesto, the first three bullets. Some colleges will not.

survive, some colleges will not survive, they're already closing, most many will. Let's go to the desert of Arizona. In a public college, the University of Arizona's president takes full responsibility for financial woes. Does the university trust him to make amends? This is from a Chronicle weekly briefing from Fernandez and Mudio Suarez. This is on February 10th. There's not going to be a hyperlink for this story.

Gary (13:32.514)
because it's from an email newsletter. But it does fall in the category of true and unneeded confessions. The story writes from Fernandez Amudio Suarez, in November, the University of Arizona announced a big unexpected budget deficit. Last week, administrators outlined a financial recovery plan, which includes budget restrictions to departments and academic divisions, layoffs, and possible cuts, even, whoa, even to athletics.

University leaders, the story goes on from the Chronicle, university leaders are trying to regain the confidence of students and employees and alleviate a projected $177 million budget deficit. How did this happen? The university says that it lost track of its spending because of inaccurate budget forecasting models and poor.

communication between the central administration and individual academic units. I'd like to say it happens, but it really shouldn't happen. Robert C. Robbins is Arizona's president. And he said, and this is the headline on the story, he said to a university leadership forum, and I quote Robert C. Robbins from Arizona's president, "'We have some serious financial issues.'"

And I want you to know I take full responsibility period end quote. OK, if it weren't Robert C. Robbins taking responsibility, I guess maybe me, maybe I should take responsibility for Arizona's financial challenges. And the story concludes with today out of 81, this is an important caveat, I think, today out of 81 budget units.

61 out of 81 operating budget units have been operating at a deficit, the university said.

Gary (15:35.838)
and academic units have to submit three budget cut plans for a 5% cut, 10% or 15%.

Gary (15:45.27)
There is some concern across the organization for the way this has been handled. What else is new? The United Campus Workers of Arizona called on Robbins and the Chief Financial Officer, Elisa Rolney, R-U-L-N-E-Y, to resign. Rolney, the CFO, was stepped down in December, but the story reports she remains employed at the university as a senior advisor with a salary, and I'm going to paraphrase here, of over half.

million dollars. Man, how do I get that gig? And then Lila Hudson, Chair of the Faculty and an Associate Professor, told The Chronicle that the university's leadership team suffered from a profound misunderstanding of how to run a high-profile research university. University leaders have said they will be transparent about cuts and that they will evaluate

just rank and file positions. Page three, spin, is the theme. Western Illinois University, spring enrollment is down 500 students. International numbers are still high.

This is by WGEM by Dylan Smith. I presume that's a radio or TV station in Macomb, Illinois or in Western Illinois somewhere.

Gary (17:13.602)
The story notes that spring enrollment is down about 500 students. And for those keeping track at home, it was about 10,200 in 2014, and not quite 7,000 in the spring of 2024. That ain't a good trend. Assistant Vice President for Student Services and Enrollment, Justin Schuch, S-C-H-U-C-H, maybe Schuch, said the overall decline came as expected. Okay, we're planning on that. After the university saw a drop in the fall as well. And I think I reported on that back.

in the fall of 2023. Trying to spin, that's my words, not his, trying to spin. Justin Schuch said he said the caliber of students that are enrolled are now a primary focus rather than on simply a number. All right. Spin, spin, spin. We want to see them cross the stage, Mr. Schuch, and now it continues. It shouldn't be about numbers. Well, it always is. Our students aren't just a number here.

Pause for tears. Our students aren't just a number here. We wanna make sure as we welcome students that they are seen and heard and have as much support as humanly possible. Shook is talking about graduation rates. Should I tell you what their 20, 21, four-year and six-year graduation rates were at Western Illinois University? Over four years, they graduated 32% of undergraduates.

Over six years, they barely graduated half, 51%. So on the good news side, they've got a lot of room for improvement. On the bad news side, spin, spin. And then Western Illinois gives a link to a Western Illinois webpage with enough unorganized, unusable data that would chase away almost anyone interested in pursuing the financial and enrollment challenges at the university. And that's why I created the College Viability App.

And the 2024 version is almost out the door any day now. Users can easily and quickly compare the last eight reported years, not some selective stuff that universities spin. The last eight reported years of financial and enrollment and outcome data on almost 1,300 private colleges. And when the public version comes out, it's about 1,500 public colleges, both two and four year in the country. Spin, spin, spin part two, Lion College. Spring enrollment shows positive growth.

Gary (19:40.426)
Strong retention rate. All right, let's pick those blueberries out of the strawberries. And this is from baseball Arkansas, KAIT, radio, television, I'm not sure. And in the line and the Western Illinois line spelled L-Y-O-N. That's why I'm here. Colleges can spew out this selective data rubbish.

And I can refute it with actual data trends. For example, at Lion, in 2022, their revenue was only 81% of expenses. Their FTE enrollment over the last eight years is down over 200 students. They only have 488 to start with in fall of 2022. So it was 600 something eight years ago. Their graduation rate is not much better. It's not even as good as Western Illinois, as good as relative.

39% after four years, just so sad. 45%, not even close to half of all in college undergraduate students graduate in six years. Why are they even a college? Their tuition fee revenue is down about a little over half a million over eight years. That's not a big number, but it's down over eight years. That's not good. You know, down over one year, not a big deal. And then Dowman is a little under a hundred million dollars. That's okay. But as I recall, they had a big gift here recently. So I don't know what it was before that. I'd have to look up.

And then athletics in the small college marketplace. The side heading on this is campus sports are not perfect, but they do more harm than good. And this is from the James G. Martin Center. And Joseph Nippenberg wrote this. And he suggests that I quote, he suggests that athletic programs might actually serve as a source of ideological and intellectual diversity on otherwise politically homogenous campuses. So the point is, athletics on campus have value.

I like sports, I like athletics, I will seed the point, I will seed the point readily. However, and I had to know there was a however coming from a financial perspective, college sports teams are subsidized in a materially significant part by the tuition revenue from non-athletes and other talented college students.

Gary (21:55.466)
If I'm in college, I'm readily assuming that any incremental revenue from the tuition and fees paid by athletes will drop mostly straight to the bottom line. Here's the reason. Other students, other non-athletes, other non-musicians, other non-artists in those colleges pay the fixed costs associated with labor and operations. For example, a section of History 101, I made that up, a section of History 101 with 20 students

already in the class, already enrolled in the History 101 class, has zero incremental costs to add five more student athletes, or tuba players, or artists, or really sharp computer folks. The first 20 students paid for whatever allocated costs are associated with that class. So, yes, there is value in that, but keep in mind there's a cost component.

You're adding insurance and coaches salaries and travel costs, health insurance costs. And when I do the math, and when I've seen the math done other places, be careful. That is not a materially significant way to save money. And then lastly, Cabrini University, closing up here this May. With stats, the headline reads, with stats stacked against them.

Students get help from soon to close Cabrini University to enroll elsewhere. And this is from the Philadelphia Enquirer and Susan Snyder. Good story. How to close a college. McMurray College, as I mentioned in the opening, did a good job with that also. And there's a student referenced in the story, Zachary Donlon, strolled into what was once the admissions office, but is now in the school's waning days, the story reads, focused on helping underclassmen find new universities to attend. I know where I'm going, Mr. Donlon declared.

The junior accounting major from Pennsylvania is settled on Gwynedd Mercy University. I think I pronounced that right. G-W-Y-N-E-D-D in Pennsylvania. It's one of four universities that Cabrini has designated as an ideal partnership school for its students. Now, when I see this happen, I really right away worry about two time closures because it's happened.

Gary (24:14.946)
A student will close, a college will go, that student will go somewhere else and that college will close. And so I worry about those kinds of students. So I went to the 2024 private college viability app and looked up Gwinnett Mercy University. I'm gonna be nice. It's kind of doing okay. They're certainly in a lot worse position. They have a 147% revenue over expense ratio. That's good.

They've lost 500 students, 500 FTE students in the last eight years and have questionable graduation rates. But in terms of financial health, I think Mr. Donlon should be able to complete his degree at Gwinnett Mercy University, but that's not always the case. And I will follow the colleges that close in the future with similar kinds of studies. And I did know when I went to the college viability app for 2024,

Gwinnett University is doing a lot of serious discounting, a lot of unfunded institutional grants. Their endowment is pretty low at $36 million in 2022.

Gary (25:18.37)
Something to watch, something to watch. So.

Gary (25:24.662)
The 2024 Private College Viability App is ready for release. It's going to come out this week sometime. And not just the executive analysis version, but dedicated versions for faculty and staff. There will be nine comparison reports. For student and families, there are five comparison reports. The executive analysis version has 32 comparison reports and a lot more functionality than the other two versions. So here's the thought process. Here's the thought process for potential users. The higher

Education, market, SMS, you can agree with me, you can disagree with me, but you can't disagree that there are too many college sheets and not enough college students willing to pay for those seats. There have been about one private, has been about one private college closure per month since about 2016. It's not quite one, but it's close. There is every logical and data-driven reason to believe that this trend will continue. I look at a lot.

a lot of college financial and enrollment and outcome data. And I believe the rate of closures will increase. That's a Gary Stocker opinion. Take it for what it's worth. I believe also there will be two consolidation periods. We are already in the first one. Colleges are closing. Colleges are cutting back and doing layoffs. We talk about that each week.

And I think it'll continue for another year or two. The second period, not really talked about much of at all, will include many colleges that survived this first period that we're in now, this first closure and consolidation period. And they'll start looking for merger partners. That's happening hardly at all right now. It should be, but it's not. And after that second period, say two to five, something like that, more years, the market will have consolidated enough, enough closures, enough mergers.

for the supply and demand imbalance that we're looking at here in early 2024 to reach something closer to an economic equilibrium. Go back to econ 101 class. Purchase the proper version of a college viability app or don't. Some will, some won't. There will be colleges and consultants and bondholders and banks and college counselors and many others who do purchase the app to compare the financial health of private and public colleges.

Gary (27:37.99)
Again, like I said before, some will, some won't.

I will. I'll use it constantly. I always do. And we'll continue to use it, to continue to provide the news and commentary on This Week in College Viability, on the other podcasts that I do, Uh-Oh! College, and the new one, College Counterpoints, that I do with Joseph Pellerito Jr. This message needs to get out. And here at College Viability, we're taking that as our responsibility to do so. This is Gary Stocker with This Week in College Viability. Let's do this again next week.