This Week In College Viability (TWICV) for March 17, 2025

Gary D Stocker (00:01.134)
It is Monday, March 17, 2025. Time for yet another episode of This Week in College, viability news and commentary. Hi, everybody. Gary Stocker, thanks for making time to listen to the podcast. Best wishes to all of my Irish friends on this St. Patrick's Day 2025. I've got a green warm-up jacket on, so I'm going to go with that as my green for the day. So I should be good to go and ugly.

ugly weather weekend in the eastern half of the country this past weekend. And it looks like a tornado might have hit within a mile of our St. Louis suburban home on Friday night. We're just now seeing some images in the media today from a soccer park, just not that very far from our house. And I guess a good segue then would be an economic tornado. Long, long running economic tornado continues in higher education. Here are

Today's news and commentary stories, first of all, are gonna have lots of layoff and cutback stories. Albright College tries to spend mid-year financial growth. I'll take that apart, just plain silly. And a story about a public college growing, I guess, but students are concerned.

And it fits my belief that we are witnessing a substantial movement, a substantial student movement toward big publics. I'll have more on that. And New Jersey City University votes to merge with Kean University, and it awaits OK from the Middle States accrediting agency. And then a story on what could happen if the Department of Education still exists. But what if it just loses its ability to collect college data? Hint.

and this is from somebody else, hint, we might have colleges given a license to lie about the data associated with their college. That and of course much, much more this week. First of all, layoffs and cutbacks. University of Southern Utah announced a 17.3 million in budget cuts, which includes some voluntary buyouts and possible layoffs. This is from Simran Nugabar on March 17 in the Cache Valley Daily.

Gary D Stocker (02:21.486)
The big story here is the state legislature in Utah has cut more than $17 million from the university's budget. think they've got 12 of that covered. Still looking to recover the last five to keep that balanced budget. Lakeland Community College to lay off faculty as enrollment drops. According to President Sunil Ahuja, this college has experienced a nearly 50 % drop in enrollment.

and a 25 % decline in enrollment-driven revenue. I don't know what that means over the past decade. This story is from Anna Meyer on March 11th from WKYC Channel 3. And President Ahuja, I think I've got that right, President Ahuja emphasized that these layoffs are intended to be the last round of faculty reductions. Now, okay, that's fine. I'm starting to see more of this kind of statement.

It's the last round, last series of cutbacks. And more and more of the cutback and layoff notices. I'm guessing, speculation on my part, that it's to ease the current anxiety. Nothing wrong with that. If it turns out in too many cases that more cuts are needed, and it wasn't really the last round, it's going to get ugly. It's to get very ugly at those colleges. And Western Washington University.

announces more layoffs to chip away at a $18 million deficit. The university's budget is uncertain with state and federal activity, looking to cut about $18 million. They announced...

They were eliminating, they were planning to eliminate 55 positions, but earlier this month they up that number to 74. The provost, Brad Johnson, has an interesting comment. He notes that they have been working on reducing parallel structures in academic units. I'm guessing that's redundancies. Good for them. And they still have, like I said before, the five million in need of reductions. Franklin and Marshall College in Pennsylvania to cut staff in April.

Gary D Stocker (04:31.406)
Now this is not typical. I'll tell you why in a second. This story is from Ashley Stalnecker on February 13th at the Lancaster Online, I believe, website. So from 2016 to 2023, these folks have an 80 % four-year graduation rate. Good college. Graduating folks. It's yet another college that is in financial trouble despite graduating students. And we see way too often that's not the case.

Their full-time enrollment was down 300 some odd students to 1900. Their unfunded institutional grants were up 12 million and change over the last eight years. That's a little more million a year. That's concerning. Their current long-term debt, which by definition is that debt due in the next 12 months is 99 million. Now, if I'm reading that correctly, that's a big number for a current long-term debt. And this college and something new from the 2025...

college viability app is they they award about 500 plus bachelor degrees each year. That's a good number, but that's been flat for the last eight years or so. And the tuition and fee revenue has been flat. That's up a little bit about 500,000 over the last eight reported years. And this is from data from the private college financial compass, 2023 to 2024. What comes out of that private college financial compass?

is the total debt and lease obligations are at 160. That's 160 million. That's big. Now, tuition revenue has been flat and the revenue and expense balance has been decent, but flat and down a little bit over the last few years. This is the interesting part. The endowment, the 2023 end of year endowment at this college, at Franklin Marshall College in Pennsylvania, is at $380 million. They've got a runway. They've got a nice long runway.

Their endowment draw has hovered around 5.5 % from 2016 to 2023. Again, this data is from the private college financial compass. Their endowment earnings are a little bit below the 50th percentile. They're at 38%. The median is 44%. So not quite getting the return that the competitors are. And here's what we're looking at. We're looking at a college, looking at a college trying to stay on top.

Gary D Stocker (06:44.99)
of solid long-term financials by getting its operating costs in line with its operating revenues. Yes, the story doesn't look good, but this is a college I would send my children to. They graduate students, their endowment is 380 million. Yes, they've got some short-term imbalance. They've got some short-term issues, but looks like they're working to address them. Franklin and Marshall, if I had an award, you would get one for trying to get it done. Compliments to you and your team. Bitch!

downgrades LaSalle University in Pennsylvania to something called BB-. And then here's effectively Fitch was looking at the data of course for LaSalle and they report that LaSalle's fiscal year 2024 performance lagged Fitch's expectations resulting in the deterioration of available funds. This was beyond what Fitch had projected. Additionally, the downgrade is supported

by the weak cash flow calculations.

that LaSalle repeatedly did not get and went to their endowment draw to subsidize. Now I'm paraphrasing what Fritzch says, but that's the essence of what's going on. Before we move on, college dribble one time this week. We have, it's gonna be anonymous, we have been transparent about our financial situation as well as the steps we've taken to address recent budget shortfalls caused by the shifting higher.

education, a landscape, this from a college with a going concern listed on his financial statement. It's only public. It's only public because events made that transparency almost required. Page two, Albright College, Pennsylvania. Here's the headline. Albright College exceeds expectations with strong mid-year financial and academic growth. Get your spinning shoes on.

Gary D Stocker (08:50.21)
This is from Albright College News, an internal document on March 14th. I'm going to read the intro. Albright College is from February 7th, so I didn't get that one when it first came out. Albright College, a cornerstone of academic excellence since 1856, is demonstrating remarkable resilience and forward momentum despite the challenges facing higher education nationwide. And I referenced that earlier.

At the midpoint of the fiscal year, the college is cash flow positive and on track to sustain this financial position through year. And well, of course, they're cash positive in March. They just received their student tuition and loan dollars from the federal government. I hope every college is cash positive when they receive those. It's kind of like saying immediately after you get your paycheck,

immediately after getting your paycheck and before paying all of your bills that you are wealthy right now.

Nice spin. I'll give them credit for a nice spin angle on that. And they say they're on track to sustain this strong financial position through year end. Well, let's put a big old we'll see behind that. And the data from 2016-2023, the College Viability App for Executive Analysis. Albright College only graduates about 40 % of their students over the last eight reported years.

unfunded institutional grants.

Gary D Stocker (10:27.394)
the merit aid and scholarships that give out is, I'm sorry, I that right there. The full-time enrollment is down about a thousand students, about 40 % over the last eight reported years. Decent growth in graduate enrollment. And they have worked to get their unfunded institutional grants down almost 20 million. So they've recognized they needed to not discount so much. And I see this almost every time a college's unfunded institutional grants, again, merit aid and most scholarships.

Anytime they lower that, the enrollment goes down and that's exactly what happened at Albright College, down a thousand students over the last eight reported years. They've been able to lower that institutional grant number. That's good, but a thousand students less, whatever the net tuition is, that's a big number. And then from the perspective data science, private college financial compass. Now, if you don't have this yet, drop me a note. I'll put a link in the show notes. If you don't have the private college financial compass,

You're making a mistake. This is an unsolicited advertisement. It is a resource that brings data from 2016 to 2024 from audited financial statements, IRS Form 990s, and some IPEDS data for 1,300 some odd private colleges. It is an invaluable tool to let you compare how you stand with a lot of colleges. And I know just last week, I think it was, they added an all college data table that really lets you compare

dozens, dozens of financial reports for any set of parameters for colleges you want to compare yourself to. If you don't have it, invest in it. I'll put a link in the show notes. But for this college, this for Albright College, their net income margin is down, write this down, their net income margin is down 75%. 2016 to 2023, might be 2024, I didn't check. The endowment draw, how much they take out of their endowment to keep the lights on effectively.

The endowment draw has been larger than more than 75 % of private colleges. If you actually looked at this on the private college financial compass, you would see it's probably above 90%. It's a really, really high number. And the bottom line revenue over the last eight to 10 reported years, revenues down 32%, down 32 % and expenses up 20%. They want to spin cash positive in March.

Gary D Stocker (12:55.778)
You know, I know I don't have this in my notes. This is a jeesh. I'm going with the jeesh on this. These folks are trying to spin their way. Management by PR, not good. Wittenberg University, not quite on the college viability this week in college viability frequent flyer lists. But last week, it was late February, I Wittenberg University in Ohio placed in financial distress status by the college, by the college accreditation group, which was

The good folks at, let's see this in my notes, the good folks at.

Gary D Stocker (13:34.574)
by the US Department of Education, but it's a crediting agency. And I see which one it is here. Might be HLC. Wittenberg University has been given a financial distress designation. This is from Brooks Burlock, the Springfield News Sun on March 13th. HLC at its higher learning commission cited doubts about Wittenberg as a going concern. That would have been an audited financial statement. And the university says the move is based on past financials, of course. There are no future financials besides dartboard guesses.

And the college says, university told, the university officials told this news outlet, the news sign, this designation was based in part on audits from 2021 through 2023. And they went on to say, it did not come, did not come as a surprise to the university, nor does it affect our day-to-day operations, say the good folks at Wittenberg University. They've done some cuts, they've done some cutbacks, some layoffs. And to the data.

Their endowment draw, which should be somewhere in the vicinity of four and half percent. That's what most colleges target. I don't know what the policy is at Wittenberg. It used to be lower than what I'm going to share with you. Their endowment draw, the funds they take out of their endowment just effectively to keep the lights on. That's my generalization of theirs. Their endowment draw the last four years has been 16 percent, then six percent, then 13 percent, then 16 percent. The last four reported years. And this is from the private college financial compass.

That's a big number. Those are all big numbers outside of the six.

And so what happens, I'll tell you what happens, the percent change in the endowment value, the median for private colleges has been up 44 % over the last set of years. The endowment at Wittenberg has been flat. It is putting them at a distinct competitive advantage for their competitors who've taken advantage of the growth in the stock market and watched their endowment grow 44 % while Wittenberg's has essentially been flat.

Gary D Stocker (15:39.69)
over the last eight reported years. My suggestion.

To the good folks at Wittenberg University, find a merger partner yesterday. Find a merger partner while you still have some value in your endowment before you draw it all just to keep the lights on. In this market, Wittenberg and others, most others, will have great difficulty cutting their way to success and even growing their way to success with new revenue sources. The market's just not conducive to that approach. Page three.

UConn, University of Connecticut. Both teams made the NCAA March Madness I saw. UConn's expected enrollment growth puts stress on students and local community. Now there's two ways I want to take this. First of all, this is from the UConn Student Editorial Board on March 13th. So essentially the student newspaper. And I'm just going to paraphrase what came out of their story. The University of Connecticut received a record breaking number of first year admission applications.

over 62,000 applicants, and they'll have about 4,500 expected to enroll. And as far as this body is concerned, again, a student body, these increases are exactly the opposite. These increases are exactly the opposite of what UConn needs to be doing during this time. So UConn is growing and the students are saying, hey, quit it. And one note here, again, from the student body.

student newspaper maybe, UConn quietly took away housing guarantees for upperclassmen. Prior to this, UConn offered up to eight semesters of guaranteed housing. Now they've only now they only offer two and of course because they're growing they have to have those rooms for undergraduate students. Here's the rest of the story. The university is facing, again same source, is facing compounding budget cuts that are limiting academic offerings.

Gary D Stocker (17:44.622)
The story goes on, for the past three years, professors and graduate students have warned that the immense budget crisis, I guess this is alleged, will lead to fewer course offerings and increased course sizes. All right, a couple of things going on here. It's growing. And students don't like it. At the student newspaper doesn't like it. This, here's my observation. This is yet another indication, I've shared this in recent podcasts. This is yet another indication that students are moving.

toward the big and the well-known, probably mostly public, but I think some privates as well. And in this case, in spite of anticipated budget cuts. If that's happening, it's possible we start to see that this fall when enrollment announcements come out, but what if we're already in middle of it? What if we've already been in the middle of it for the last couple of years? And I don't know of anybody who's tracking that. Maybe if I can find some time I can do that to see what the percent change has been in some set of large publics.

versus some set of smaller privates. It'd be interesting. New Jersey City University is going to merge with Kean University. It's a proposed merger and they weighed okay from the Middle States Commission on Higher Education. And here's some of the issues at New Jersey City University. They have deferred capital maintenance needs. Estimated could be as much as 100 million to address those. They have significant debt and lease costs with bond debt payment alone concurrently.

consuming about $7 million annually and likely to rise about 5 million more to 12 million in the next couple of years. And there's a need for additional staff and resources while possibly downsizing in some areas. So here's my suggestion for what it's worth.

Here's my suggestion, New Jersey City University faculty.

Gary D Stocker (19:37.304)
there have already been some pushback from the faculty. New Jersey City University faculty, do the merger.

If you don't...

based on my experience, based on the data I see from other colleges, if you don't do the merger, if you push back so hard that it falls apart, you run a serious risk of losing everything.

moaning and groaning about the details will not provide a financially winning scenario. And the Department of Education and Middle States, get out of the way.

your interference in the higher education market with superfluous critiques and unconstructive focus on I dotting and T crossing is not a useful contribution. Get or done, get or done. This is a merger that needs to happen. Page four. All right, there's a lot going on in Washington. I've shared in recent podcasts that I think that's just yet another market factor pushing down on higher education.

Gary D Stocker (20:42.926)
But there's a story out from Adam Minsky, senior contributor from Forbes, who's essentially talking, the story is the government is changing the rules on current students with loan or past students with loans and changing the rules that may require them to pay more. And there's some details in the story. And of course, I had the link in the show notes. And so if this holds, if this holds, and I don't know that I believe that it will, if this holds the government is effectively changing the rules,

in middle of the game for millions of students.

Again, I think this will moderate in some form or fashion. However, if it does not moderate, when does the higher education crash occur? Because we're not in it yet. We're in the early stages of it, I think. I think it happens big time this fall, as early as this fall. It happens if these changes aren't, if it's not moderated in some form or fashion. It's probably from a combination of current students saying, hey, they're changing the rules. I'm not going to be able to afford

$1,000, $2,000, $3,000 a month. Those current students not returning because of that repayment uncertainty. And then fewer new students, new freshmen, for a host of different reasons, including potential concern that they won't be able to afford the loan payments somewhere down the road. And again, kind of a similar story. This is from Jill Barshay in Hekenger. Chaos and confusion as the statistics arm.

of Education Department is reduced to skeletal staff of three. Again, I think this is going to moderate, but that's just my opinion. Here's from a former, the Statistics Arm is a national center for education statistics, and of course, this iPads database is what I use for all my data.

Gary D Stocker (22:38.83)
former Commissioner, NCES Commissioner Jack Buckley, says in this story, everyone's entitled to their own policy ideas. He's talking about the feds, but no one's entitled to their own facts. I'm going to follow up on that. You have to share the truth in order to make any kind of improvement, no matter what direction you want to go. Now, again, I think this will shake out and not happen.

at least the doom and gloom that many are writing and talking about. But in a worst case scenario, in a worst case scenario where this happens and all the data goes away, independent data collection goes away and colleges get a license to lie. And I heard that from a favorite brother of mine over the weekend when I was telling him the story. Colleges get a license to lie and effectively start making up any data they want.

on enrollment and graduation rates and other stuff that comes from the National Center for Education Statistics and its IPEDS database. And there would be no entity to check that. That's what IPEDS does. They check the accuracy of the data, have rules and guidelines and specifications. And even with it, on occasion, you've heard me talk about data points that look ridiculous. Some colleges are so understaffed, they don't have the expertise to actually report the IPEDS data. That's a small minority, but I think it's out there.

But, again, worst case scenario, there will still be audited financial statements. There will still be the IRS Form 990s. I believe those will both be available. And they'll both provide some semblance of independent financial data, for the most part, on finances.

We could probably, as I think this through, we could probably draw some conclusions about financial health just from that data. It won't be ideal. And I hope this doesn't come to fruition because if it does, there are going to be a lot of folks in a lot of trouble. And maybe we talk about that on another podcast. So let's do the rap. And in today's podcast, there was yet another example.

Gary D Stocker (24:49.856)
of a college effectively saying we are just like others in financial trouble. It's not a big deal. Again, paraphrasing, other colleges are having financial troubles too. And I read similar statements from colleges undergoing cutbacks and layoffs and closures regularly and maybe increasingly so. This reinforces my belief that higher education is in the midst

of its consolidation era with both mergers and closures. There is also going to be some consolidation programs and majors as some colleges cut, as we've seen. There'll be some consolidation and programs and majors as some colleges cut and others pick up some of that student volume for those majors and programs cut. And the challenge on when this higher education tsunami hits, it's always been a question of when.

And my standard line, and I've used this many times, my standard line for estimating the the timeframe for massive consolidation is always today, tomorrow, next week, next month, next year. I don't know. I think it is inevitable. I don't know when. It kind of, it's kind of a question that begs for an answer that can't be provided, can't realistically be provided. It will happen. That's my operating premise. And when it does,

When it does happen, it will be an even uglier period for higher education than we are seeing today. Hey, thanks to everybody for making time to listen to the podcast. Always grateful for that time. Always grateful for your feedback. I'll have all the links in the show notes. And I'll come back next Monday on March 24th with another episode of This Week in College Viability. Until then, best always.