This Week In College Viability (TWICV) for March 3, 2025

Gary D Stocker (00:00.878)
It is this week in College Viability News and Commentary for March 3rd, 2025. Hi everybody. I am back behind the Blue Yeti microphone after a week of viral disease battles here at College Viability World Headquarters, also known as the spare bedroom. Springtime is close. We all know spring training is underway in Florida and Arizona. So let's do our own spring training.

and look at these stories. Two public colleges, Tennessee State University, who has been a frequent flyer, and Penn State are in the college cutback news. Tennessee State with staffing cuts, and Penn State across their entire system will soon be looking at closing some of their regional public colleges. be talking about that. And the Middle States Commission on Higher Education Accreditation, they hosted a webinar last week, and I attended it.

And the title was How to Close a College. I'm going to look at the possible motivations for middle states hosting that. gentleman and just finished up writing this story on college closures. College closures are a blessing in disguise. And then a merger that won't happen between Bluffton and Finland universities in Ohio and Pennsylvania, I believe. What that may mean for future college mergers. We'll talk about that, of course, much, much.

much more on this episode of This Week in College, viability layoffs and cutbacks. Lives will be impacted. Tennessee State University proposes staffing scholarship cuts to stay open. This is from Emily West on February 19th, News Channel 5 in Nashville. The university has already made millions in cuts in hopes of getting its financial house in order. Last fall, Tennessee State laid off more than 100 staff members.

The school also eliminated 117 contracts. That's a lot. The Duplicated Services is saving some $3.5 million. The cuts Ms. West writes about are about to go deeper. Their proposed cut of $18 to $20 million in scholarships, $6 to $7 million in non-instructional staff, and $5 to $6 million in instructional staff.

Gary D Stocker (02:23.264)
And if you do the math, and I did that in my own here, and you assume a salary of about $60,000 per employee, I made that assumption, it's about 100 employees each. So that's an additional 200 employees to be cut at Tennessee State based on my math. I might be missing something, but just basing the math on that $60,000 number. And then an additional three to four million in non-personnel cost reductions, which includes the president and cabinet members.

Boy, they must be paid well. So do the math. The cuts in scholarships are simply unfunded grants. So Tennessee State will effectively be willing to go without some 18 to 20 million in revenue. All colleges do that. The faculty and staff cuts suggest something, like I said, on the order of 200 cuts. That's a big, big, big number. Southern Illinois University, Edwardsville. There's a couple of Southern Illinois universities. The chancellor calls for layoffs and cuts.

at Southern Illinois University. This is Blythe Bernard in the St. Louis Post-Dispatch on March 1st. From the story, Ms. wrote, Southern Illinois University Edwardsville, which is just northeast of St. Louis, needs to slash positions and academic programs to improve its finances, Chancellor James Miner said in a letter to the campus this week. The chancellor said the cuts are responsive, responsible steps.

to address the university's operating deficit of more than $10 million with the goal of balancing the budget by 2027. And of course, the standard comments, although some of the decisions will be difficult, no doubt. Inaction is the most dreadful threat we face as an institution, Miner wrote. SIU-Edwardsville is not in a financial crisis. We do, however, have long-standing structural imbalances in our budget that must

addressed. And again, I've said this before, if it's long-standing, why now? Why not? The parent of a series of buyouts will roll out this spring. And of course, the faculty had a response. And so here's their response. And now Miner is the chancellor. This is from the American Federation of State, County, and Municipal Employees. Amy Bodenstab is a source on this. Now Miner wants to remove more people, but he hasn't removed the work.

Gary D Stocker (04:47.918)
She goes on to say, SIUE, Edwardsville, exists because of those of us who aren't in upper administration. Chancellor Miner has made it very clear that his priority is not employees or making SIUE impactful in the future with his actions. Having a deficit is not new at state universities and the budget numbers presented to us don't add up with the cuts and changes we know have been made. And I've said this countless times.

Faculty are regular, right or wrong, regularly questioning the budget numbers. And here's why. Budgets are not much more than dartboards. We're throwing guesstimates for future numbers on a piece of paper and calling it a budget. It's the audited financial statements. It's the data submitted to the IRS for private colleges. It's the iPad's data that reflects kind of the scorecard, the grade card, you will, the grade.

if you will, for these colleges. And when there's that level of distrust between the numbers from one party and the other, it's not going to make things good at all. And on to the Penn State story. Penn State University is considering closing several of its smaller commonwealth campuses, call them regional colleges, due to financial pressures and declining enrollment. The potential closures, of course, associated with population decline. Pennsylvania is one of them are.

high propensity, high ratio of colleges to students out there. And while current students would be able to complete their degrees, the closures could limit future students access to affordable education policies. Well, the term used by Penn State leaders is unsustainable. All right, fair enough. And I bring this up because we use that unsustainable term regularly on the College Financial Health Show with Matt Hendricks and Gary Stocker.

Every Tuesday at 10.30 a.m. Central Time, go to my LinkedIn posts to get the link for each week. We don't ever say, Matt and I never say a college is going to close. We may have suspicions, but it's too tough to tell. But we can and do show how an historical financial path is not sustainable, unsustainable. We do that with regularity. So to the folks at Edwardsville, rip off the financial bandaid. It won't be fun, but you're not the only ones.

Gary D Stocker (07:15.562)
and shrink to survive and maybe hope to have a chance to thrive at a later date. Page two. The Middle States Commission on Higher Education, I call them Middle States, most folks do. Middle States hosted a webinar. Here's the title. How to close a college. Now, it was a really decent how to. Polo Langtao and Peter Zorziannis both were at colleges that closed and they effectively

told their stories. And they shared that transfers are risky for students, they can lose credits, and that teach-out partners are better. My own experience on that is teach-out partners are some, most of the time, as, in as at least about a financial state as the colleges are closed. I've done reports before that show teach-out partners have financial troubles, and they're just grabbing those students to get revenue. And nothing wrong with that, but.

You got to wonder what the motivations are. So why did Middle States host this? Why did Middle States Commission on Higher Education host this, how to close a college webinar? Have they made an internal decision that they are anticipating more closures? Do they know there are more closures coming? Are they now encouraging colleges in their physical domain, which is most of the Middle East, excuse me, the Northeast of

mostly the Northeast. Are they encouraging more closures? they getting about to mandate closures? Where in years past maybe they just said hang in there and we'll just push you on probation. So and those of you that follow me regularly know that on this show and others, I have regularly taken accreditors, including middle states to task for not giving the students and faculty and communities a heads up when a college is nearing closure. So I had a LinkedIn

high-read connection, drop me note, say, you know, here's what I suspect. I suspect they are just trying to jump on the bandwagon of talking about closures and trying to put that responsibility on boards and presidents without taking any accountability themselves as accreditors. All right, I can see that. I need to think about that a little bit more. I think they're all culpable, the boards, the bands, the boards, the presidents, and the accreditors.

Gary D Stocker (09:39.534)
And yes, with the financial losses, this person goes on to write, with the financial losses, schools are about to suffer because of public policy changes. This person suggests and predicts that we're going to see a lot more college closures a lot faster than we would have.

Period.

Let's go to California. And the headline reads, this is by CalMatters, Mikhail Zinzitsin and Zinstein for CalMatters, gutted courses, fewer majors, faculty layoffs, who will feel Cal State's 8 % budget cut? The subheading is how will the California State University system keep operating when the governor has proposed cutting $375 million from its budget?

And the reporter's right, it's already happening at some campuses. And we talked about San Francisco State a month or so ago, and more recently, Sonoma State, who is interim president at Sonoma State, intends to lay off tenured faculty, NSAM majors, and then totally close that university's entire NCAA Division II intercollegiate athletic programs. And this is from a senator. We'll talk about this here more in a minute. From a state senator.

in Colorado says if the reductions were to hold, what's happening at Sonoma State, which I just talked about, is the first of what we will see at every Cal State University campus. This is Senator John Laird, a Democrat from Santa Cruz, who chairs the Senate Subcommittee on Education Finance. So part two.

Gary D Stocker (11:25.112)
Another headline says Austin Metzger and Rylan Valtepina on the Sonoma Star, is on March 1st. California legislators demand comeback plan, comeback plan from Sonoma State Administration during forum on campus. Well, everybody was upset. They got together with a forum on campus, as you can imagine, it wasn't pretty. And so here's what comes from the story from Mr. Metzger and I presume Ms. Val Valtepina.

The California State Legislature has demanded that Sonoma State produce a comeback plan following recent cuts and come with that plan in the next 30 to 60 days, type fast. State Senate President Mike McGuire said for the comeback plan, they are looking for metrics, a plan for recruitment, acknowledgement of impacts on campus life, I don't know what that means, and the creation of a community comeback

committee, sure, let's have more feedback from folks who don't know the business piece. The chancellor's office, as well as administrators at Sonoma State, must acknowledge their failure and mishandling of the university's budget and its budget cut rollout, said another state rep. And this story goes on and on with complaints and charges and demands. And while all of this is going on, while all of this is going on, the dollars continue to go out the proverbial door.

with insufficient revenues coming in through that door. In other words, like I've said about the creditors, the state reps, the state legislators in California says, hey, send us something where you guess at what is going to happen in the future. Just guess, you old dark board model, at what's going to happen in the future. And just make sure you dot your I's and cross your T's.

How about this one? College closures are a blessing in disguise.

Gary D Stocker (13:26.574)
Too many colleges short-chain students, let's have fewer of them, so says Walt Gardner on February 21st in a story for the Martin Center for Academic Renewal. And I'm gonna read part of this story from Mr. Gardner. And he writes, putting aside the unprecedented fiscal challenges brought about by the overall shrinking population of college age students, the larger truth is that not everyone

Not everyone is college material. It takes a certain IQ to handle college double work. And despite exaggerated claims about the role that true grit plays, it's generally believed that an IQ of about 115 is necessary. I don't see a source on that. The large number of freshmen who drop out each year serves as evidence that many are academically in over their heads. I've said that before a little bit more nicely than Mr. Gardner does.

Some institutions, he argues, he writes, are colleges in name only. In fact, little more, he suggests, are more than residential high schools. While Gardner goes on to write, such students would have been much better served if they had pursued a vocational curriculum and an apprenticeship. Instead, they were led to believe that without a bachelor's degree, their future was bleak.

Even worse, some of the colleges they enrolled in were colleges name only, like I just said.

And as a result, such institutions closures, the ones that have closed, were a blessing for students who would have been saddled with a debt for a worthless degree. And he concludes, college's job should not be to funnel as many high school graduates as possible onto their campuses, but instead to make college available only to those who have the demonstrated wherewithal, I'll add intellectual and academic wherewithal, to profit from the experience.

Gary D Stocker (15:30.326)
And so far they've not been successful. Mr. Gardner finalizes, it's unlikely they ever will be as long as they persist in believing that college is for everyone or in feigning that belief for financial purposes. That's serious sarcasm. When students learn they are ill prepared to handle rigorous college level material, they drop out. Admitting unqualified students only sets

such students up for failure that should serve as a reality check for higher education, but it hasn't. Okay, well, this is what I have been saying. It is easily reflected in the pathetic national four-year graduation rates that I talk about constantly. And what appears to be happening is that students are figuring this out long before colleges, and we know that because they're showing they recognize it.

by not enrolling in colleges, in any colleges. And if you follow anything that I write or any of my media, harp almost, in my own indictment, almost excess on how colleges make a big deal out of some minor positive enrollment trend in August or September, but never, in my experience, never announced during May commencement ceremonies.

that this year we graduated 43 % of the students who started four years ago. Such sad numbers. Walt Gardner makes great points in this story. However, it's unlikely to change higher education anytime soon. Mergers and acquisitions at the University of Findlay, not proceeding with Bluffton University merger. And this is from Elizabeth Klaus.

on thecareer.com on February 27th. And this is, I'll of course provide the link in the show notes. This is really not, in my mind, this is not a failure of two colleges trying to merge. It's not a failure of the two colleges, it's not. It's a colossal failure of a higher education system that makes business model change so difficult.

Gary D Stocker (17:53.71)
It's also a reflection of the unique nature of nonprofit mergers. There is rarely, if ever, any cash changing hands, unlike in the for-profit world, as a result of a non-for-profit merger. So the value to the parties is based on futures. Future enrollment, future programs, future staffing, future back office consolidation, and all of those, and many more, are a very difficult model to both apply.

accept. So the bottom line is more colleges may look at mergers, I hope so, because they need to, but with the current systems and processes in place, most mergers will not work like we saw at Bluffton and Finley and other places as well, and it's going to result in wasted time and resources along with a higher rate of closures because colleges

have put their chips on a merger.

Gary D Stocker (18:59.01)
and we'll be out of financial time when those mergers don't come to fruition. And then a follow-up on that, Jeff Salingo, who again, I've had his stuff on the show many times, top of the line writer and researcher, he writes in conjunction with this Finley and Bluffton non-merger, why is it so hard to merge colleges? This is in Jeff Salingo's February 28th Next Newsletter. If you're in higher education and you don't get Jeff's newsletter, make sure you go and find it and sign up for it. It's an excellent resource that crosses

all sorts of disciplines and just worth your time, trust me. And so here's what Selengo writes, it seemed like the perfect marriage until it wasn't. He talks about Finley and the Bluffton merger.

And he goes on to write, there's been a lot more talk in higher ed about mergers than action. He's right. I talk about a lot. Others talk about a lot. In reality, we've seen a lot more college closures. is from Jeff Selingo. We've seen a lot more college closures and outright acquisitions than true majors. So it was the University of Findlay Board of Trustees that was a bigger, financially stronger entity. That's the one that voted not to move forward.

on the merger application to its accreditor, the Higher Learning Commission, and then the president at Bluffton resigned. As a consequence of that, there's much more to story. I just don't know what it is, and I don't think either does Mr. Salingo. It's unclear, he writes, exactly what happened. But sources told him that the lengthy timeline to approval was a factor. He writes, beyond the accreditor, the Higher Learning Commission, the big wild card was the US Department of Education. It was going to take

18 months to three years to get that completed through the Department of Education. And the source on that is Finley president, Kathy Felt. And she told Jeff Salingo that in his podcast. then again, from Jeff Salingo, the protracted process clearly played a role at a time when there's a lot of uncertainty about the direction of the education department. And we're all reading those stories. And when many small colleges don't have time,

Gary D Stocker (21:12.014)
to reverse declining enrollment and fill their growing budget deficits.

So then go again concludes the general consensus is that the US has way too many colleges, especially when more than one third of the market is made up of institutions with fewer than a thousand students.

What interested Slingo, what interested him about the Bluffton-Finley merger was that Bluffton was financial, relatively financially stable when it approached Finley about coming together as one. And most colleges with financial troubles, Jeff Slingo writes, know well in advance they're not on a sustainable path.

And they're not going to, maybe they don't know three years in advance, which is maybe what the process time might be to get these mergers completed, but they sense that they're not in good position. They know that their cash is dwindling. They know that the pressure on tuition discounts is increasing. And I bring this up because it kind of ties in, or does tie in with the Buffett and Finley merger.

First of all, too many colleges have waited too long and have closed already. As I've shared many times before, I know where these colleges that have closed have approached other colleges at the last minute, effectively saying, please marry me, marry me, marry me. I'm about to not survive. And the colleges being approached just look at the resources and say, no, you bring nothing to the table. So these colleges are waiting too long, but even when they don't, in the case with Bluffton and Finley, it's a treacherous.

Gary D Stocker (22:49.71)
treacherous process and I gotta believe, I do believe that the closure process is gonna be where we see most of the consolidation. We'll see very, very few as a percentage, very, very few mergers or other significant business model changes. Page three, Raleigh College jumps on the free tuition bandwagon. Zach Iazzoni from the Triangle Business Journal on February 11th.

William Peace University, P-E-A-C-E, will cover tuition costs for students who meet certain eligibility requirements. Well, what that means is they'll take a North Carolina fund program and they will take Pell Grants and that'll be enough. They would just write off the rest of the not write it off. They just won't have the revenue for those students. And eligible students will have their tuition covered through a combination of federal Pell Grants, North Carolina scholarships and institutional aid. And those will just be unfunded discounts.

said Damon Wade, the university's vice president for enrollment management and marketing. To the data, I haven't done that yet today. To the data for the good folks at William Pease University 2016 to 2023, total revenue down 18%, total expenses up 13%, FTE enrollment down 300 students, tuition and fees down about 3 million, a pathetic four-year graduation rate around 35%.

The 2023 endowment around $50 million and the net tuition revenue over that eight-year period down 24%.

Accepting less may drive cash flow up a little bit, but they're still expensive to consider. This, my experience, is not a feasible approach, but yeah, we've seen others try it throughout the country.

Gary D Stocker (24:45.12)
Spin, spin story today. Southeast Missouri sees strong growth in key enrollment areas for spring 2025. That doesn't last for long. The subheading reads, Southeast Missouri State University continues to make strides in several key enrollment areas, even as an overall headcount enrollment reflects a 3.4 % decline compared to last spring. And what they do is, I'm not going to read these off.

is they have a whole, I have six bullet points and they all reflect percent changes. But they don't give us any absolute number. So how are we to draw a conclusion when all they're listing is a percent change? know, 11 % change on 10 students, that's nothing. 11 % change on a thousand students, well, that's serious. But with all these bullet points, they're just spinning it to make it look good. I understand we've talked about this before. They're welcome to do it.

But they're not fooling anybody. They're not fooling me. There are challenges at CMOS, there are many other places. And Southeast Missouri State is a regional public in Missouri page four. Spring Hill College. Dropping majors due to under enrollment. This is by Pat O'Donnell and Summer Pool on CBS Channel 42 on February 26. Now this is a financially unhealthy private college for sure, but they're doing the right thing here.

And according to President Mary Van Brunt and Provost Rebecca Cantor, they're dropping these majors, chemistry, biochemistry, history, philosophy, secondary education and studio art major. That's fine. We see cutbacks all the time. But here's what they're doing. The announcement of these cutbacks was included options for students for each of those majors, how they could complete something else that would take advantage or use some of the credits, if not all the credits they had for those programs.

Now, it's a perfect example, a perfect example of a college shrinking to survive. Again, Spring Hill is a financially challenged college. There's not a lot of ways I'm not gonna do their numbers today, but they're doing this cut back right. Will students be negatively impacted? Yeah, faculty, yeah, of course. it's just colleges, you've seen this before, colleges cannot.

Gary D Stocker (27:07.192)
Colleges cannot universally expect to be all things to all people. So kudos to the good folks at Spring Hill College. They're doing their cutbacks in the right way and it like with so many times.

And then finally, selling yesterday's solutions. And this is by Peter Kuri, who always writes some good content. I obviously see it on LinkedIn posts. And this is on February 28th, selling yesterday's solutions. And he's effectively talking about consulting firms and how consulting firms haven't really changed their business model for a long time.

and he ties that in.

Gary D Stocker (27:50.744)
and he ties that in with how accrediting agencies really haven't changed their requirements materially.

for a long time. And that's fine. He makes some good points. And again, there'll be a link to the article in my show notes. But let's do a wrap this week based on that. Selling Yesterday's Solutions is the title of Peter Corey's story. And I wonder how much of that also applies to colleges and even college faculty. Now, it's complex for sure because some subjects, math and English and physics, fixed topics that don't change much from

year to year, decade to decade, are effectively the same. Yet the higher education industry is almost, almost, it is, certainly in a negative public perception freefall.

more more folks think less and less of colleges and what they and the products and services they're offering. There are certainly pockets, certainly pockets of innovation, but my perspective is that most of those end up at the talking stage without really ever generating demonstrable impact on students and learning. We call that management by PR and the posts in the media that we do. So what do public and private colleges do? Just like we saw at Spring Hill Shrink.

to survive just like what we're going to see at SIU Edwardsville. Just like we're to see week after week, month after month on this show, colleges are shrinking to survive. They're not calling it that, but that's what they're doing. They're shrinking to survive now. And what they need to do is innovate and not just talk about it, to thrive and innovate to thrive with courses and degrees and business models. We talked about the challenges of mergers. Well, maybe there's subsets of mergers that will save some colleges.

Gary D Stocker (29:44.014)
We can talk about that another day in partnerships. There, I believe there will come, there will come a time when the imbalance, the current imbalance of too many colleges and too few students willing to go to those colleges, even at discounted tuition rates, when that imbalance will stabilize. I have no idea when that will happen. I think it's later rather than sooner. But when that does happen,

We'll look back at this time period that we're living through right now. And in hindsight, in hindsight is an important qualification. In hindsight, we will see how it was readily apparent, as we sit here today it's not, which colleges would not survive. I can tell you which ones are at greatest risk. Which colleges would need to shrink to survive? We see that in the news almost daily. And which colleges at the time, at our time right now, which colleges right now were innovating to thrive?

innovating to thrive when the market came into a better college to student equilibrium. That time will come back. The market always adjusts. I've said that many times and it will happen here. But there will be a lot of trauma, a lot more trauma between now and when that happens. So hey, for those making the time to listen to the podcast, I am grateful. Thank you very much. We do this every Monday and we will do it again next Monday. So for College Viability and this week in College Viability, I'm Gary Stocker. Thanks again for listening.

We'll talk again next week.