This Week In College Viability (TWICV) for Apr 14 2025

Gary D Stocker (00:01.206)
Welcome back again to this week in College Viability News and Commentary. Hi, Gary.

Gary D Stocker (00:09.614)
Welcome back to this week in college viability news and commentary for Monday, April 14th, 2025. Hi everybody, Gary Stocker. Thanks for making time to listen again. Lots and lots, almost too much to go over today. Let's talk about some of the highlights. Two Massachusetts colleges in financial danger. An accrediting agency finds this, well, belatedly so. Our college closed. I've got a story about three faculty.

and their college that closed was the College of St. Rose in New York State. Another story, the reason dozens of Massachusetts colleges could close within a decade, and this is subheading we hand, it's not President Trump. And shockingly, a politician speaks out on a public college closure and then yet another accreditation for an undeserving college in my mind. When will accreditors wake up and make

colleges graduate more than half of their students. Goodness, goodness gracious. Hey, let's start with layoffs and cutbacks and I'm going to lead off with mergers today. Georgia has two public university systems combining into one. It's going to be east of Georgia State and Georgia Southern University coming together. This is an April 8th story from the Atlanta Journal-Constitution. Correct me if I am wrong, but I'm seeing a trend where slightly more

Public colleges are engaged in merger activity than private colleges. Now, if that's true, and I think it is right now, I don't expect it to stay that way because privates are gonna have to engage in, I think, large scale consolidation in the coming months and years. And I've said before, the first phase of consolidation in higher education would be closures, and we see a little bit of them now. I think we'll see more later this year. And then sometime in the next...

two years, give or take, three years, four years, we'll see those colleges that survive, who have modest at best financial health, looking to merge and join forces with other colleges across the country. So in that spirit, two Massachusetts colleges are in financial danger. The accrediting agency finds this is Massachusetts Live on April 3rd. It's Anna Maria College in Paxton and Montserrat College of Art.

Gary D Stocker (02:37.006)
So you know me, let's go to the data. The net income and operating cash flow margin is trending down for both. That's mostly since 2020. And in Maria, their operating revenue is up 10%. All right, wait for the drum roll here. Operating revenue up 10%, operating expenses up 50%. That's five zero percent since 2016. Somebody's not watching the piggy bank.

Montserrat is down 12 % on revenue and up expenses are up 17%. So again, if you can't balance the budget, if you can't make revenues match expenses, there are going to be issues, there are going to be closures, there are going to be cutbacks and layoffs.

Gary D Stocker (03:25.354)
And for both the enrollment is flat to down a little bit, employee headcount is also down to flat. For both of those, the net tuition revenue all over the place, it's down 20 points at Anna Maria, but up 17%, but only in 2024 for Montserrat. And there's much more, but again, both are clearly showing an inability to get a balanced budget. And what does the New England Commission on Higher Education say?

Anna Maria College in Paxton and Montserrat College of Art are both quote, in danger, end quote, of not meeting institutional resources. I know what the standard is, but the sentence doesn't make sense. So come on.

I will cede due process, gotta be. But when will the big six accreditors get out of their comfort zone and give the paying students, the paying students a heads up when a college is in clear financial stress and headed in the direction towards either serious layoffs and cutbacks or even closure? And I just shared the numbers on these two colleges.

And if you're an accrediting agency, the New England Commission or others are happy to share them with you. Happy to share those numbers with you you don't have access to them. Or if your dad is so dated or tough to read, which is more likely, happy to share with you. And I guess that's what I'm here for. So if you are at or considering either of these two private colleges, Anna Maria or Montserrat College of Art,

Be concerned, be careful.

Gary D Stocker (05:14.774)
Ann Arbor, Michigan, Concordia University there is to lay off 41 staffers amid restructuring. I think the university here announced plans to eliminate athletic teams last year. Last year, there's some push back on that, but the university administrators at Concordia Ann Arbor are insisting and working to dispel rumors that the college was closing. It will be all academics, all right, so there won't be any athletics. Good luck with that.

which I think everyone knows that we're finishing up our athletic season this spring," said Michael Duffy. The Concordia AA Interim Executive Director interim is always in my mind a leading indicator for a leadership role. So you've heard me talk about Jonathan Nichols and his book Requiem for a College. There was a story out from Inside Higher Education this week that talked about the story of three faculty members, three professors.

from the now closed College of St. Rose. The three were Jennifer Soriano, Terry Ward, and Julianne Cuccio Slicho. Slicho, help me if I miss that. And in this article, they shared insights for faculty. And I'll include the link to the story as I always do for you to read. And their journey, the reason I have this story, their journey is very similar to that of Jonathan Nichols, who was at St. Joseph's College in Rensselaer, Indiana back in 2017.

And I bring up this story as yet another reminder that head in the sand and hope are not successful career strategies for college faculty in 2025.

take my guidance, agree, disagree. If you have concerns, even if they're just in your gut, that your college is in trouble, access the tools that are available. I've got the 2025 College Viability app. It's labeled for students and families. It's on the College Viability website. But it's also an affordable resource for faculty concerned about their college's financial health. It's $39. Not even a meal for two at most places.

Gary D Stocker (07:29.25)
probably a wise investment for college faculty and staff, even community leaders, if you want an early read on a college's financial health. It's a wise investment if you have concerns about your college's future or just want to have better data to participate in maybe making things better. And by the way, John Nichols has a second edition of Requiem for a College coming out later this year. And I've said this before, it is a

Classic, classic story about college closures. I'm not sure anybody can tell it better than Jonathan Nichols. You can check out the podcast interview I had with Jonathan about the second edition on the same podcast webpage as you get this week in College Viability. Jonathan Nichols lived it. He analyzed it. He shared it. And now he is updating it Requiem for a College due out later this year.

You've heard me talk about bonds before. And this is kind of a story of two worlds. And the headline reads, and this is from Emma Whitford at Forbes, universities are seeking billions in bonds as protection against Trump's assault. All right, well, we'll give her to the political piece. Despite large endowments, taxable bonds are providing operating liquidity while colleges wait for clarity on federal support for research. Now, this is how the other half lives.

The other half lives in higher education. While many financially struggling colleges are regularly violating basic bond covenants rules that may threaten their existence, the big boys, the ones with billions or hundreds of millions, are legitimately, there's nothing wrong with this, are legitimately using bonds to maintain status quo operations. They're borrowing to pay bills.

Not the first time, not the last time. Any business has done that. Nothing wrong with it. I just point out the disparity. And I've shared this before. I'm going to share it again. In the end, when this era of higher education, the story is written, it will read that the same bond market that is used actively and properly by the financially strong colleges

Gary D Stocker (09:53.378)
will be the same bond market that drives many less financially secure colleges to the brink of closure or beyond. John Marcus, Boston Globe correspondent, had a story on April 9th. The reason dozens of Massachusetts colleges could close within a decade, and again, story subheading his hint, it's not Trump.

goes back to the demographic cliff and people not having babies back in 2007, eight, nine, that kind of time period. So first of all, Massachusetts, he's writing about is an Ed and Med state. They have long been proud and justifiably so of their focus on education and medicine, Ed and Med state. Some of the points that came out of John Marcus's story was from this demographic cliff, the sightings data from others.

that nearly there will be nearly 500,000, 500,000 fewer students, fewer college students in 2041 than in the year 2025. In Massachusetts alone, this is a big number. This story suggests that close to 72,000 fewer graduates will emerge from high schools in Massachusetts. Now, I assume it's the same time period, 2041. I don't know that the article says that.

That's a big number, 72,000 out of 500,000. I assume it to be correct. That's about 16, 17 % of the total for one state. Brendan Cantwell, who's a professor at Michigan State University and studies higher education economics says, but there are a ton of private colleges. Well, I don't know how you measure private colleges to get a ton of them, but he did it. But there are a ton of private colleges.

that are smaller and that have regional draw, that do not have big national markets that are really reliant on tuition. He goes on to say, this is Brendan Cantwell from Michigan State, as the local market shrinks for those campuses, things that are already difficult will only become more difficult. Dr. Cantwell, welcome to the show. Welcome to sharing the same kind of data and stats and conclusions I have for many years now.

Gary D Stocker (12:14.56)
And the story continues, this is from the State Higher Education Executive Officers Association. And I've talked about this data before, it's fairly readily available in the media. Most who attend colleges that close, give up on their education. Fewer than half transfer from a closed college to another one. And of those who do transfer, fewer than half manage to ever graduate, do the math.

And if a college closes somewhere in the vicinity of 25 % of those students impacted will, as the data suggests, ever graduate with their degree from college.

Gary D Stocker (13:01.634)
Page three.

Facilities universities face a daunting facilities need report says and this is from Gordian who is a facilities management firm capital and operations are spending are up But not enough to close backlogs construction data company Gordian GORDIAN says I point this out and again the story link will be in the show notes. I point this out because

We look at this regularly on the college financial health show with Matt Hendricks and Gary Stalker, a CAPEX, capital expense, to depreciation ratio. And Matt's app calculates this. had a private college advanced financial compass, calculates a CAPEX to depreciation ratio. If it's consistently below one, it suggests that a college is forgoing infrastructure maintenance, taking care of things.

Define that any way you want. I'm not going to put the safety tag on today. I've done that before. And reasonable speculation is because they don't have the cash, they don't have the resources to invest in that maintenance. Now Gordian, like most data companies, look at the macro. They look at the big picture and that's fine. That's what they do.

Here at College Viability, we look at the micro.

Gary D Stocker (14:23.732)
at Prospective Data Science, Matt Hendricks firm, we look at the micro, we look at each individual college, and this guidance, be concerned, be cautious, be wary about sending your child to a college that is not keeping up with maintenance of its buildings and its ground, that data is available in the private college advanced financial compass. There are lots of ways to access that. And hey, next story, a politician.

doesn't like that a public college is gonna close in her district. All right, Bill Boyle had this story in the Times Leader on April 11th. Senator Lisa Barrett, excuse me, Senator Lisa Baker from Pennsylvania, essentially says, Penn State University is spending too much money on sports and that spend should not.

impact colleges in her district to the point of them having to close. All right, I paraphrased what she said. I might have missed some of the nuance, some of the details. And she goes on to say that the warning signals for colleges, the one she's talking about is Penn State welks bear, W-I-L-K-E-S-B-A-R-R-E. I hope I pronounced that second part right. They're waiting too long. And she suggests that the issues with finances are Penn State's, I'm guessing the...

big Penn State colleges, their problem, not ours. And all I have to say with that is clearly we have going a fight, fight, fight between this Massachusetts state senator and the Penn State University system. Kellyn Stepler Tribune Live on April 13th faced, faced with a perfect storm. Small colleges try to navigate the future. Nothing particularly new about the story. It really affirms what I have been talking about for a long time.

Mr. Stapler starts out the story with a line, if you build it, they will come, was not the way to go about higher education in Pennsylvania. And clearly on your own hindsight, that's a great observation. bad somebody didn't have that many, many years ago. And this, this is another story. This is another story that reaffirms what I have been saying for years.

Gary D Stocker (16:48.11)
Mr. Stapler uses the term overbuilt to describe Pennsylvania public and private colleges. like the term overbuilt. I think I'll use it later on, but it's still a basic supply and demand situation. So one last notable stat from this story. Penn State had almost 88,000 students enrolled across its campuses last fall, making it one the largest public universities in the country. I'm guessing it's across all of its campuses.

Now last fall, the university welcomed its second largest incoming class with more than 9,000 students. So the story's a little vague as to where those 9,000 students are going. But in my mind, this is another subjective, soft indication that we're in the midst of a pattern where students, college students, are going big, Penn State, and going for brand names they recognize, Penn State.

and not for those colleges without the bigness, the size, and the brand name recognition.

So there's a Doug Zander, who's the Associate Vice President, whoa, Associate Vice President of Enrollment Management and Dean of Admissions, that on a business card, at Millersville University in Lancaster County. He said, and I'm not gonna like this, but I'm gonna share what he said. He said, need to focus on marketing the value of a college education, my words, not his, just to prospective students.

For example, someone with a four year degree makes on average significantly more in their career than someone with a high school diploma. I read that fast for a reason. No, Mr. Zander and all the others who had similar quotes. No.

Gary D Stocker (18:39.562)
No, maybe, maybe you should focus on graduating the students that you have.

and not drive something more than half of them into high cost college loans used to pay for colleges that are not graduating them in four years and in too many cases not even in six years. And remember what I said previously, colleges are all about making a lot of noise when the enrollment numbers inch up even a little bit each fall. However, they are much less

forthcoming. Each May, when students graduate, sarcasm alert here, I have yet to hear a college at their graduation ceremony each year say, hey, something like we graduated 42 % or 38 % or 21 % of the students who started with us four years ago, a national tragedy that

hardly anybody is talking about. We had the Higher Learning Commission on one story earlier in the podcast. Let's do it one more time. This podcast story is from Maddie Carr at the Emporia State University Bulletin. The headline reads, ESU, Emporia State, accreditation reaffirmed by the Higher Learning Commission, one of the big six. The next reaccreditation is in 10 years.

Well, it's been a couple of weeks since I've had the chance to challenge accreditors. So I'm going to do that now. Let's go to the data. Emporia State University have been in the news off and on regularly for all sorts of issues. From the college viability app 2016 to 2023, Emporia State University graduates less than 30 percent.

Gary D Stocker (20:39.278)
Over the last eight reported years, they graduate less than 30%, three in 10, 30 in 100, 300 in 1,000. Less than that in four years. Their enrollment is down about 40%, eyeball-parked down, about 1,200 plus students. Their non-current, which is years out, long-term debt has more than doubled to 34 million. Now, in my mind, the 34 million is not that bad. The doubling down in eight years is a concern. And tuition and fees,

are down $6 million. So I'm going to read, I should have put this in the college dribble, but I didn't. I'm going to read a quote from this release.

Gary D Stocker (21:21.949)
Reaffirmation of our status through our regional accreditor at this level demonstrates that the university is delivering the highest quality academic and student experience as well as affirms ESU's and Portia State's operating excellence. This is from Mr. Thomas. I don't have the rest of the name here. Told the bulletin. He goes on here. She goes on to say ESU's reaccreditation also ensures

Students have access to money, all right, that's why they do it. So I had a sarcasm alert a moment ago, let me issue another 10-year accreditation for Emporia State, even though they graduate fewer than three in 10. It also means Emporia State pays accreditation fees, whatever they are.

for 10 more years to the higher learning commission, I'm just saying. And what we really need, what we really need folks is people like Matt Hendricks and me to use our tools, use our data, use our analysis, use our comparisons to focus on the financial health and viability of colleges as a standalone product, as a standalone service, and gladly leave the eye-dotting and T-crossing that I've teased about so many times.

to the accrediting experts, just the academic ones. Page four, let's go to California, Sonoma State. Sonoma State Public College, Sonoma State officials outline recovery plan amid massive budget deficit and cuts. And this is from Kevin Koh on April 9th from CBS San Francisco. After a 23.9, almost $24 million budget deficit, Sonoma State University,

has going to implement a campus-wide, start that again, Sonoma State University has implemented a campus-wide set of cuts and they issued a nine page document titled A Bridge to the Future. I would have used Chad GPT to come up with a better name, but so be it. And this bridge to the future noted that Sonoma State has lost 38 % of its enrollment since 2015.

Gary D Stocker (23:40.526)
which has led to a significant loss in revenue. Okay, makes sense. So here's six goals from this bridge to the future. Bridge to the future, increase enrollment, number one, increase enrollment by 20 % within five to seven years. Launch a minimum of four high demand academic programs within three years, no details given. Grow campus participation, have no idea what that means. Grow campus participation by 20%. Implement a career internship.

pathway program for 30 majors, not identified. I like this one, create a true college town experience through local partnerships. And then the sixth one reduced 20 % of costs in the division of administration and finance within five years. And they show an estimate of some $10 million to implement those things. That's fine. You got to account for that. I'm glad they did. And the document also states that the university's investment decisions will keep students

in the North Bay, apparently North Bay of San Francisco, to reduce the regions, to reduce the regions brain drain and create, this is cute, and create a brain gain. All we'll use chat GPT for something at least. CBS News in the Bay Area also requested an interview with the university regarding this new direction and the university spokesman's spokesperson sent a link to the bridge to the future document that I just summarized. This is Sonoma State, this is...

delusional thinking in a shrinking, oversaturated, overbuilt market, whether in California or in middle of Iowa, it is highly unlikely that this college or most other colleges can grow their way out. To the data, College Viability Act 2016 to 2023, Sonoma State University, public college in California, tuition and fee revenue down 18, 18 million.

for your graduation rates, just like Emporia State, not even hitting 40%. Enrollment is down 3,000 some odd students. I've got about a 40 % drop, but I eyeballed that one. Even the graduate students are down over 100 students over that time period. And the leadership at Sonoma State plan to grow their way out. Let me offer this. How about doing just the shrinking part now? Cut.

Gary D Stocker (26:09.836)
what needs to be cut and then some. Balance that budget now and maybe have the hope of thriving in a few years.

So as I write today's rap for the podcast, I'm trying to think about the last time I read or saw or heard anyone predict that higher education was headed toward an upswing, industry-wide. In my experience, it just doesn't happen. Correct me if I'm wrong.

There are many copycats out there using, probably using my data or maybe in Matt Hendrick's data to support their position on jumping on the higher education is doomed bandwagon. I know they're using my stuff. My wife knows because she regularly hears me shout, they're stealing my stuff. It's a fact of life. I'm okay with it. Stealing is an interesting form of flattery, but I digress. And I understand that media sources are in need of content.

The late, great Paul Harbour used to say that bad news sells. So what we're seeing across the industry, especially since January 20th of this year, is many, many, many folks in higher education sharing bad news stories.

Gary D Stocker (27:32.686)
about that industry, about higher education. And they're not even things that have happened, they're things that may or may not happen. Speculative is a fair word to use to describe those. And we're missing the bad news, we're missing the true bad news. That bad news, like I've shared so many times, is the financial weakness and the viability issues of too many colleges, mostly private.

too many real student lives that have already been negatively impacted and too many more, too many more that will be negatively impacted in the coming months and years. Too many colleges. There are too many colleges and not enough students willing to buy a college education for an amount of money that will support colleges in an overbuilt.

industry until something happens to change that equation. This rocky ride will continue. And with that, I'm going to call it a wrap for this April 14th, 2025 episode of This Week in College Viability. Thanks for everybody for making time to listen. Let's do it again next Monday. I'm Gary Stocker. I forward to that conversation.