This Week In College Viability (TWICV) for Jan 20, 2025

TWICV For Jan 20 2025 (00:01.102)
It's this week in College Viability News and Commentary for January 25th, 2025. Hi everybody, Gary Stocker back again this week. welcome to the cold winter and to Twik V for January 20th, 2025. want to start off today's podcast with a story about two college professors I met. I met them virtually. I had a chance to meet and talk with these two kindred souls just last week and they

They released a book on Amazon in December. And I'm going to tell you the title, but not much else. The title of the book is Bankrupt You. Bankrupt You is the title. The authors are two college professors, Bill Quain and Joe Karabi. Now, as you might guess, I get folks from across the higher education spectrum reach out to me on a regular basis to get my perspective on college finances and closures and mergers and more.

And I've had authors on the podcast before, and I'm going to have these two on the podcast as soon as we find a nice, convenient date. They are two experienced senior and, I'll add, professors who take on colleagues and college faculty in a way that you're going to want to hear about, you're going to read about. I'll say the details for later. And again, they'll be on the podcast as my special guest as soon as we can get a lined up. This week,

I have news and commentary on layoffs and cutbacks at the University of New Orleans, Columbia College in Chicago, again, St. Norbert College, also back on the show again today. Frequent flyer, Webster University. This one got me. Webster University touts financial turnaround. This is one year after their auditors said they had a going concern.

$39 million in debt and only is down to $22 million for 2024, I believe. It's an absolutely ridiculous assertion that I shredded to bits on social media. And I'm going to share that post with you today on the podcast. And I guess the big national news last week was freshman enrollment didn't flop after all. This was from the National Clearinghouse and it was all over the media last week. I'm to talk about that. I'm going to share with you. I don't really think it's that big of a story, but we'll talk about that in a few minutes.

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More silliness at Guilford College, not just Webster University. They don't have a monopoly on silliness. And as always, much, much, much more on the show. Layoffs and cutbacks. The University of New Orleans to furlough hundreds of employees. Furlough hundreds of employees as it faces a 10 million dollar budget gap. This is from Marie Fazio, who's a staff writer at NOLA.com. And it's 290 employees. And I'm looking at the Yahoo version of the story. And

Until June 30th of this year, nearly every staff member, including upper administrators like the president, making more than 30,000 annually will be required to take unpaid time off during each two week pay period. Lower paid staff will be required to take a day and a half of unpaid time off per pay period, while the highest paid will take three days off every two weeks. And 290 of the 575

Full-time employees will be required to take furloughs, layoffs, program and course cutbacks. It's just more of the same. It's continuing evidence of the overall contraction of higher education. There's just no way around that.

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Doreen Rodriguez at Columbia Chronicle. think we've had her on her stories on the podcast before. Columbia College lays off 23 full-time faculty amid historic restructuring. Well, all right, she can write whatever headlines she wants. This is 23 more full-time faculty. The college laid off 23 full-time faculty on Tuesday, January 14th. The announcement came in an email, in an email from the interim president and from the senior vice president and provost. Names aren't important for the story.

Nine teaching track faculty and 14 other faculty members with tenure appointments will be let go after the spring 2025 semester. The layoffs came mostly in programs that were consolidated or eliminated in the massive restructuring that took place last fall as Columbia attempts to reduce its $17 million deficit. Now keep in mind, Columbia is at 17 million. They're not proclaiming a turnaround. Webster University was 39 million in 2023.

It's down to 22 million in 2024, and they're claiming a turnaround at Webster. Just, just, just, just ridiculous. Now, know, the Columbia College has been on the podcast before, and I have noted their weaknesses. But the more I ponder this and the more I read some of their news stories, it's possible. It's possible that Columbia College might be doing just enough to survive. I'm certainly going to watch this one closely. St. Norbert College.

And a story from Brian Kernan on Fox 11 news on January 16th. Additional faculty layoffs are coming. They're not specifying how many. And the college is using, this is from Brian Kernan on Fox 11. The college is using what's known as retrenchment. All right, nice and another synonym for layoffs. Where faculty positions can be terminated for financial reasons and or program discontinuation. By the way.

Interesting, I might have missed this before. St. Norbert graduates about 70 % of its students in four years. So again, another example of a college that least graduate students, unlike probably most of the others we're going to talk about today, still facing significant and maybe impossible financial challenges. College dribble. I'm starting off with two today from the same place. And again, I don't mention the college. There's no value in that yet.

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We are not closing, says this college, we are changing. We are not closing, we are changing. We are going to be a model of higher education for the world as it is and as it will be during your student's life.

Okay, we're not closing, we're changing. Great. Here's another one. The freshman retention rate can be attributed to the college's continued dedication to fostering a supportive learning environment and its personalized approach to education. How many times have I read that and heard that from colleges? Trite, trite, trite, trite, trite. And another one, same college, and I'm still not going to reference it. Our exceptional growth and retention rate are indicative of our collective efforts.

to empower students to reach their fullest potential. Hey, I'll give you some selective use of data. I'll give you some real use of data because this college is picking and choosing what it wants to share. This private college graduates just over 30 % of its students, just over 30 % of its students for the past eight years. This is from data they submitted. Their eight-year retention rate, they boasted in this story about a 92 % year-to-year retention rate.

Their eight-year retention rate is in the mid 60 % range. It's just college, again, college name, use whatever data that you want. But that's why I'm here. I'm going to point out where it's silly. And this is yet another example of college spinning, spinning, data to their benefit, but not to anybody else's. So Webster University, again, a frequent flyer here on the program. Webster University touts financial turnaround.

Now this was in two publications, the essence of the story, in Higher Education Dive and here in St. Louis in the Post Dispatch. And the subheading reads from one of the stories, I can't remember which, a year and a half ago, the private Missouri institution's sustainability was in doubt. Survivability was in doubt, but enrollment increases have led to steep improvements in its finances. All right, let's drill down onto this.

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And I'm just going to effectively read my social media post to this story. And I say, this is just plain silly. It's like me saying my five foot nine inch body will become six foot two because I will eat extra oatmeal for breakfast tomorrow.

The continuing issues with bondholders at Webster University and substantial budget cuts, they're not suggestive of anything close to a turnaround. Nothing close to a turnaround. The university is pitching a story that is high with projected results, anticipated results, and low with actual performance data. Now, one reporter in these two stories did the research that I do all the time. Not one reporter has noted

that Webster's percent admitted, and again, that's number of all the students that Webster gets applications for, are admitted. Webster's number went up from 59 % to 96%, 37 points in one year from the fall of 2023 to the fall of 2024. Now Webster has clearly decided

to go all in on driving up tuition revenue by becoming much less selective. And they're welcome to do that. That's a business decision they can do that. I'll tell you what's gonna happen. Four years from now, the graduation rates for these students are gonna be really low, but Webster will have been able to post that they collected some tuition revenue, they increased their enrollment by being much, much less selective. And a reporter might have also checked out the changes in Webster's admissions yield. I did.

The percent admitted of the top 25 % high school applicants is down 18 points from 49 % in 2023 to 31 % in the fall of 2024. Draw your own conclusions from fewer higher performing students selecting this university. And this is, as my post goes on,

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This is yet another example of what I call regurgitation reporting. Regurgitation reporting media in whatever form or fashion takes a college's press release and treats it and treats it as news. Not cool. And again, I'll share I'm getting away from the post here. I'll make my data available to reporters anywhere in the country as a courtesy. No fee, no charge.

I'll send you the link. you have to do is drop me a note to garyatcollegeviability.com. And since I am doing all of the work for the media, I will add that this university, Webster University, averaged only 44 % four-year graduation rates for the past eight reported years.

There was an editorial in a North Dakota media outlet, and I'm not going to post it because it was behind a firewall, so I had to find it through different sources. Rob Port, who's a reporter, I believe for this publication, says, sorry, North Dakota Governor Armstrong, but we need to talk about shutting down some of North Dakota's colleges. Now, the North Dakota governor is Kelly Armstrong. The story goes on to say the North Dakota University system is comprised of 11 campuses.

Eight of which are mandated by the state constitution. Mr. Port goes on to note, our system is overbuilt and duplicative and something needs to change. He goes on to say the reasons for lack of accountability in some of these colleges are tied up in the local interest politics, which makes sense, that dominate discussions about the size and the number, I guess, of our state's university system.

We know these schools can create many jobs in their communities and the students who attend generate a lot of commerce. Closing any given campus, we know this would be a blow to the local economy. But Mr. Port continues, is not a good reason to keep them open, even as demand for higher education falls through the floor. And then from the intro, freshman enrollment.

TWICV For Jan 20 2025 (12:45.218)
didn't flop after all. You may or may not recall last fall's news story from the education clearinghouse data center that the freshman enrollment was down, like something like 5%, 5%. Every media outlet in the country had this new updated story last week. It was not down 5%. They're not willing to say how much yet. is later, maybe later this week, they're going to release an updated number, which should be more accurate. So we're to have more

actual college data and not a projection like you did last fall. I don't think the undercount is that big of a deal.

It matters to the clearinghouse, I'm sure. And here's why I don't think it's that big of a deal. The change, this didn't drop five percent change, doesn't impact the hundreds of colleges whose enrollment decreased at the college by college level. They already know it's down. They're already dealing with budget cuts and layoffs, program cutbacks and more. We hear that every week on this podcast in other places. Yet, yeah.

The big picture for the higher education market is impacted a little bit. Maybe it didn't drop as much as projected. Maybe it went up a little bit. We'll find out soon enough. But the only way I look at this is that the proverbial cliff, enrollment cliff that we hear so much about, maybe it's become more of a steep slope in some form or passion. But in places like St. Norbert or Olin College, Guilford College, La Salle University, and many, many, many more,

The impact of the clearinghouse data being too low is not, I doubt it's even on their radar. These colleges and many more are already in financial peril. A predictive methodology error only obscures the inevitable, that being much, much more consolidation in the form of closures and mergers in the coming weeks and months. Let's go to Guilford College

TWICV For Jan 20 2025 (14:55.188)
in North Carolina and I don't believe I'm ready to classify them as frequent flyers yet but they're getting close to being frequent flyers on the program. So the board chair I believe, Gene Bordovich, is currently serving as Guilford's acting president. Now this is from an internal story and the headline on this reads, it was from Guilford.edu, the headline reads, we are not closing, we are changing.

One of the questions in this little FAQ that they had at the website would be to Ms. Bordewich.

the acting Guilford president, formerly the board chair, draw your own conclusions. What would you tell prospective students and parents? This is about the financial health and viability and operability of the college. Ms. Bordewich says, I would tell them that if Guilford is the right place for their son or daughter, they should come here. Okay, that's fine. Students, you might want to look at the data, the bad data that I have posted for Guilford before.

She goes on to say, are not closing, we are changing. You might have recognized this from earlier in the show. We are not closing, we are changing. We are going to become a model of higher education for the world as it is and as it will be during your student's life. She concludes with, I would tell them,

I would tell them they will not find an environment like this at any other college or university. How many times, how many times have I heard that? Students, parents, faculty, staff, community leaders, make, certainly make your own decisions. For sure, make your own decisions. But from my perspective, looking at the data, this college presents data, this college presents data that is financially

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unsustainable. So let's jump over to accreditation for a second. So I had some time last week, or I made some time, and I went out and grabbed a financial criteria for one of the accreditors. I'm not going to share which one. And I was pondering what some of these standards might look like. It was a cold and snowy day here in St. Louis. What else would I be doing? So here's, let me read some of these. And I'm not going to cite the reference because that might give it away.

Here's one from one of the five major accrediting agencies in the country. The institution has a well-developed process in place for budgeting and for monitoring its finances. What does that mean? They have a process in place? What if it's a bad process? What if it's a process that is completely out of whack? If they have it, does that mean they're okay? It also says another one is independent audited financial statements.

and financial indexes, college financial indexes patterns for multiple years. Well, OK, here's my audit financial statements for the last five years, seven years, whatever. Does anybody analyze them at these accrediting agencies? I'm sure they do, but the standard says they just have to have them.

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They have to have an endowment draw policy. We talk about this on the College Financial Health Show with Matt Hendricks and Gary Stocker every Tuesday morning. They have to have an endowment draw down policy. All colleges draw down, almost if not all colleges draw down their endowment. But what if they have a policy at this college and what if they have repeatedly violated their own policy? How is that addressed? Is that something that the accrediting agency can take a college to?

to task for? A process for monitoring expenses. Okay, what happens if expenses, this is me, what happens if expenses are out of whack with revenues? They can show we're monitoring expenses, tracking payroll and keeping the lights on and gasoline and mowing the grass and all that kind of stuff. But what if it's out of whack with revenues? They have to have enrollment tracking.

and budget projections for multiple years. What if, this is my question, what if they are nothing more, these enrollment tracking and budget projections, what if they are nothing more than dartboard numbers, where somebody throws a dart at a dartboard and that becomes a value? And colleges must have retention and completion data. Don't even get me started on graduation rates and completion data. I've talked about this before, these are all inputs.

Do you have your I's dotted and your T's crossed?

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As these standards are written, there are no outputs that I see evaluated. It's reasonable to speculate, and that's what I'm doing here. It's reasonable to speculate that independent reviewers in these colleges use their own experience and intellect and knowledge to challenge colleges that are not doing well. That's a fair assumption. But the standards themselves are just plain too heavy on the inputs, but not on the outputs.

And then trust me, I will be talking about new finance tools for accreditors and public agencies a lot, a lot this year.

And one final college I want to talk about is, and the headline reads, latest layoffs, deepened worries about the future of St. Francis College in New York. The story is from Gwen Hogan on January 15th from The City, which is reporting to New Yorkers. I'm going to read from Ms. Hogan's story. St. Francis College in the heart of downtown Brooklyn for 160 years fired about, or fired around 17 employees. I don't know what that means, fired around.

17 employees, including academic advisors, registrar workers, and librarians last week. The layoffs, Ms. Hogan continues, represent about a quarter of the school's already dwindling staff are the latest blow on the leadership of President Tim Sasseri, who was a former human resources professional and on the board of trustees. There's a pattern. This gentleman, the story goes on to say, Mr. Sasseri.

had no experience in higher education before joining the school as chief operating officer in 2022. And he was also on the board. Interesting. And then he became interim president in March of 2023. And he became the college's official president in 2024 sometime. The college's faculty, the story goes on, the college's remaining faculty have accused the president of inappropriate appointments and removals.

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Financial mismanagement, grossly poor leadership, and abandonment of the mission and values of the college. That's according to a letter of the school's leadership reviewed by Ms. Hogan.

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Let's go to the data as we wind down on this podcast for January 25th. The endowment at St. Francis is down 30 million. The enrollment is flat. It's up a little bit, 43 students over eight years. The four-year graduation rate has been mid 30 % over the past eight years, not even 40%. Tuition and fee revenue down, decreased almost 8 million. From the perspective of data science at Vans Compass, net income is down 116%.

operating margin down 103%. They had a 20%. St. Francis College had a 20 % draw against the endowment in 2018. That's a really big number.

and the operating expenses, total operating expenses down 14%. Total operating revenue down 14%. Total operating expenses up 83%. Yeah, you heard that right. Revenue down 14%, expenses up 83%.

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You know I've got? Enough said. The data shows where St. Francis is irrespective of the college president's statements or even the faculty remaining at that college. So as we wrap up today's podcast, had Jeff Doyle, who's a LinkedIn buddy and we have talked on occasion. He had a nice little concise report about the 30 private non-for-profit college closures in 2024. There was one public one.

and the eight that have already announced for 2025. And this is from Jeff Doyle's Deep Thoughts, HED, deepthoughtshed.com blog, I believe, or website. And I did some quick counting. There were some 17,000 students impacted. I didn't count the public college, which was 27,000 some odd students by itself. It was Indiana University Purdue. And now it's the University of Indiana at Indianapolis, something like that. I didn't count those students.

For those that summarily dismiss college closures as statistically insignificant and then offer cursory regrets for those students and their families impacted, let's do some data projections. These are projections on my part. So 17,000 students we've learned, 17,000 students impacted by these 30 closures really become about 9,000 who continue, about half continue, 8,000, 9,000 continue.

So we've lost somewhere in the vicinity of 8,000 potential graduates, 8,000 we've lost, potential graduates, college graduates, and their potential impact on our country, on our society, on their families, and certainly on their future. And let's say just for a number, every $10,000 in tuition paid for those 17,000 students while they went to college, that is 170 million.

in potentially totally wasted money those students have spent on a college that closed.

TWICV For Jan 20 2025 (25:14.026)
And I understand that the leadership at every college, at every college period, but really every college in financial apparel still has its fiduciary responsibility. There's no, there is no changing that.

I would suggest that as part of that fiduciary duty, an additional part of that fiduciary duty, they add a duty to humanity.

If your college is financially unhealthy in what is clearly a contracting market, the likelihood of a strong recovery at your college is problematic at best. Think of your students, their current and future families, your faculty, your staff, and your communities. If the end is near,

The end is near. Do the right thing. Do the right thing for all involved.

Hey, thanks for College Viability, Gary Stocker again with this week's podcast. I'll be back next Monday with more news and commentary. If you have questions, comments, concerns, challenges, send them to me at gary at college viability.com. We'll be back again next Monday. Until then, take care.