This Week In College Viability (TWICV) Special with Thom Chesney June 25, 2024

Gary (00:01)
Welcome to another special podcast episode of this week in College Viability. Hi, my name is Gary Stocker. Our special guest today is Dr. Tom Chesney, and he is a career -long higher education leader.

He's earned his Doctor of Philosophy in English Literature from Florida State, a Master of Arts in Creative Writing from Minnesota State University, and a Bachelor of Arts in Spanish with a minor in Business Administration from right here in St. Louis at the fabulous Washington University. Tom has served as president of two private colleges and will soon start as president at Southwestern College in Santa Fe, New Mexico. Dr. Chesney, welcome to this week in College Viability.

Thom Chesney (00:45)
Well, thank you, Gary. It's great to be able to join you, having followed your research and gotten to know you in other ways and learn from you. Not sure what I'll contribute today, but great to be here. Thank you.

Gary (00:59)
Well, likewise, I've read your stuff and I'm looking forward to the contributions you'll have. All right, let's start off with boards. And you've had the experience over the last 18 years for 18 years, 18 months, and then in your time as president working with boards, I understand you are a board member at a college or have been. This is a tough time in higher education. From your perspective, Tom, what are boards thinking these days?

Thom Chesney (01:22)
Well, one of the things I'm experienced in working with boards and typically that's facilitating conversations at retreats around what's next strategic planning, reprioritization, those kinds of things you study and we're reading about, you know, getting into really digging into the data. So one of the things is really that digging in. I mean, it is like we have got to look at our enrollment trends and projections like we never had before. These are not getting lip service or quick little charts from the

vice presidents of enrollment management, the CFO, the advancement officers looking at the dollars that are coming in. These are deep dives that are happening now. So on the one hand, they're doing some of the things that they've always done. A lot of that was at the monitoring level. Now it's at the, hey, help us understand this or the analytical level of raising concern. That's in part because the higher profile that what's happening in higher education

is in front of everyone. National media, you have it in print media, you have it in broadcast media. So board members who themselves are typically pretty well informed, they're paying attention to things, are seeing that and they're bringing to the table, what does that mean for us? What's happening here? What do we need to be paying attention to? And that last question is the one I'm hearing the most. What do we need to be paying attention to? Because they're concerned about their viability, to use one of your terms, you know.

Gary (02:49)
Hahaha

Thom Chesney (02:50)
short term, long term, all the way out. And looking across the borders, looking at within their sector, redefining their peers, all those kinds of things. But it's very much in front of them. It feels very pressing in some ways than it did not in the past.

Gary (03:09)
One of the phrases, Tom, that has captured anybody who follows higher education's attention this year is the phrase that in 2024, there has been effectively one private college closure per week.

This week, last week, it was Union Institute in Ohio. The week before, it was the mess at University of the Arts. A week or so before that, it was Wells College. And who knows what the college will be this week. It's almost certain, to keep the pattern going, that we'll either hear a closure announcement this week or a college on the precipice of closing. Is this an anomaly? Is this something we're going to live with? What's your perspective?

Thom Chesney (03:50)
So we're recording this here in late June. I think it's this morning or yesterday that we have Baccone College going into bankruptcy. And that's a step away from potential closure back to the precipice that you're talking about. I think some of it goes back to your first question. When institutions are looking at the highest level, at the sustainability level, the survivability level, can we exist?

measuring the runways for that, looking at all of their assets, looking at all their balance sheets and enrollments, everything, some of them are just realizing that there isn't a pathway. We are near the end of the runway and we cannot accelerate the plane to critical velocity. So that's what we're seeing in some cases. The reality checks are starting to hit reality, if you will, for some institutions. And some of them surprising.

We didn't expect to hear it. So it's hitting and it's hitting hard. And I don't expect that one per week to change, at least not for a while. And I hope institutions are not out, there aren't institutions out there saying, well, maybe if enough others close, we'll hang in there. Because that is not a recipe for success either.

Gary (05:16)
So one of the things I've shared and maybe you've read or heard me talk about this is I make the case that for these colleges, small private, mostly rural, but not all of us, small private colleges, that the die is already cast on. There are no programmatic changes. There are no marketing wizards that they can bring in that will change the fact that their last financial dollars are circling the last financial drain.

Am I right? Am I wrong?

Thom Chesney (05:44)
No, I think there's a lot of truth to that. There were decisions that were not made or foregone or something over the course of years that then stack up to an insurmountable hill to climb at that point. We hear of the rare instances where someone or someones can come in, a kind of transformational leadership, but typically those are like complete

business startovers if you do, you know, beyond fixer uppers and an institution first of all has to have the appetite to do that, to bring in someone who's more than entrepreneurial who will come in and take, you know, take the credit, take the blame, you know, go through all of the pain and suffering to do a turnaround is the typical term, right? But traditionally, historically the DNA of higher ed

is not to do a turnaround, it's to turn away from the turnaround and just keep chugging along. And we've seen some schools that just kept chugging along. And again, some real surprises out there. Leaders in their area who now we're seeing significant cuts. And as we know, you can't cut your way to success. That is not a success for sustainability to be a resilient institution.

Gary (06:50)
Yeah. Yeah.

So you're familiar with my college viability app. And for those listening in, it uses data that colleges themselves submit and uses eight years of the data. And it shows good trends and bad trends. Most of them are bad, but there are certainly some good trends out there. Yet, so many people when a college is in trouble, we hear, gosh, I didn't know we were in trouble.

And yet I can sit here and tell you I'm not going to. I've got my own list of 200 plus private colleges I think are in dire danger of not surviving. I could tell you. And yet so many times folks don't know what's going on. You've been around higher education for forever. Is it cultural? Is it head in the sand? What's going on?

Thom Chesney (07:58)
It's a whole mix of that. The number of times that I hear in working with boards, and I don't want to say exclusively boards, I'm talking about boards and in the room, we have leadership teams or strategic change committees where you've got that inclusion of faculty and staff, key leaders there, board members, so forth. The number of times that I hear the phrase or something very close to, we've never talked about this before.

is stunning and it happens time and time again. When I do the design for the approach to a retreat, many of these are two and three day kinds of things. And I'm working with just maybe two or three people on saying, hey, what are we going to cover? How do we get, want to get into that? I often start in the first like hour of just having a conversation like we're having and somebody putting the brakes on and saying, whoa, wait a minute, wait a minute. That's, you're going to go into sensitive territory. Those are not things that we talk about. And then it's like, okay. And while we're at the prospectus phase,

Gary (08:30)
Ugh.

No.

Thom Chesney (08:57)
you know, we can stop now because I don't think you want me to come in and lead, you know, guide your retreat or guide this conversation that you're going to have. It's going to have some pain points to it. So that's, that is real. That is happening. We didn't know, we've never talked about. And I think some of the success stories we're seeing where you see some of that good information or that turnaround, most of the stories that we read about, and unfortunately right now they're overrun probably 10 to one by

Gary (09:25)
Yeah.

Thom Chesney (09:27)
closures or program cuts or something like that. But you'll see those stories that are teased in the morning publications that we look at every day, right, of a college that's making a difference. Something that's, you know, they made a huge shift and maybe it was a few years ago. They recognized it and addressed it. Typically, those are the ones who decided we've got to have conversations we've never had before. The survivors are all going to be doing that or they're already doing it. And

to be sure as we also read about the institution here and there that's maybe gobbling up another one or is ready to branch from an East Coast presence all the way out to the West Coast. They're paying attention to all of this because now part of their plan is to expand their brand to wherever they can.

Gary (10:16)
So there's, I'm guessing you have read the book, The Tipping Point. That's been out many years. I can't remember the author's name on that. And one of the questions I ask regularly of guests on the podcast is, you and I and those intimate with higher education are aware of the challenges and traumas. Where is the public? Are we close to a tipping point?

where there's enough media, there's enough coverage that the moms and dads and students sitting around the kitchen table tonight trying to decide on a college says, you know what, we've got to really be careful of these private colleges that are small because I'm hearing they're all in trouble. Are we there? Are we not there? What do you think?

Thom Chesney (11:02)
Yeah, I think we're there. We're close to there. And it's Malcolm Gladwell. How could we forget that it's Malcolm Gladwell? It's a big player. He's so upfront. No, no. I saw him just the other day on something, so it was fresh in my mind. So here's a case of, even in some of those board conversations I'm talking about, you know,

Gary (11:06)
guys, yeah, you're right. I get a demerit for that one.

Thom Chesney (11:27)
some of those same members are, they're having that conversation around having college -aged children, for example, going, because they're alumni of the institution, many of them, right? And they're asking some of those same questions. I've literally been in the space where a board member asks the question, I don't know that I would want my son or daughter to go here right now knowing what I know today about our deferred maintenance, about six years of structural deficits that I didn't know what a structural deficit

was and now I do as I'm seeing these trend lines, as I'm seeing these change nothing projections and this is what we'll get. As I'm seeing our enrollment gap and whatever the date again, pick your data point or data points that are adding up and they're saying, I don't know that I let my own child go here. Wow, that's coming out of the dedicated alum, often a regular and significant major gift giver or something like that, a believer in the institution saying that. Now on the outside, is that going on? Absolutely.

to me, it's no different. And I think we're seeing a lot of potential students doing the same thing. My daughter is 20 years old. When she was making her decision two years ago, she was surfing everything. She was bringing to the table for her, to her higher ed mother and father and saying, you know, I looked at this school, but here, you know, I just, I plug it in and here's what's going on. It seems like it's in chaos or they're cutting or they're whatever. I don't know that my major will be there.

There's a lot of high school kids, students I should say, that are smart and savvy and they're gonna do it. Add smart and savvy parents to smart and savvy students. And yeah, there's concern. We're at that tipping point, which you described.

Gary (13:11)
Well, just a quick comment. One of the things that makes me think that you and I are both right on that tipping point is, of course, I've got three versions of the College Viability app, the one for executives that cost a lot of money, the one for faculty and staff doesn't cost much. But by a ratio of about 20 to one, I sell more of the student and family versions of the College Viability app. It tracks just five parameters, enrollment, tuition fee, revenue, graduation rate, stuff like that. And it's only 30 bucks. And so it tells me that more and more parents are saying, you know what?

The first thing I should look at before I put a college or look at college list for my student, my child, is this college reasonably financially healthy or not?

Thom Chesney (13:49)
So for less than the price of an advanced placement test, they can get information about colleges around the country, hundreds of them, right? To help inform their decision -making. Actually, that's not what, two takeout burgers, according to the inflation rates, $30 well spent to make, right. Again, for parents and their students who are also...

Gary (13:56)
Yeah, 1300 down.

To Big Macs.

Thom Chesney (14:15)
Pretty much all of us now are in a media market of some kind where some colleges are facing a stressor and it's made the local news, it's in the paper. And if I read about that, my local college is closing or on the verge of closing or something like that, it just promotes that question. I could be looking entirely out of state hundreds of miles away, but seeing what's happening here locally, I'm gonna ask what's going on at that college. I've got the app, I've got...

The internet, whatever my resources are, I can find out a lot in not a very long period of time.

Gary (14:49)
Absolutely, yeah, absolutely.

Thom Chesney (14:51)
Pretty soon, if they're not, well, they're already doing it, I'm sure. They're gonna ask AI, right? They're just gonna say, tell me what are the financial problems for fill in the blank college, and they're gonna get a synopsis of 200 words or less. And they're gonna use that as a basis to, you know, A -B test schools they might wanna go to. That's where we are, that's what's coming.

Gary (14:55)
Yeah, yeah. Yeah.

So, Tom, you've been a college president twice. You're going to be at a new location we talked about here when we got started this morning. It's a tough gig, dude. Why? What's going on with college presidents? What are the factors that make it an attractive job? What are the challenges you think you might face at Santa Fe or anywhere else you may go?

Thom Chesney (15:41)
So I think part of the attraction is still why we go into education in the first place. It's to do something that's much bigger than that, contribute to it, in service to others, in service to the world, truly. It's that altruism, hey, I can do something and with a team of others, make this a better place. Do good in this world, a greater good way beyond anything for myself. And if I'm self -serving and so forth, that's not for me, I'm gonna choose maybe a different.

different fields. So we go into it for that. And now we have the layers of going into that and saying, you know, how far can you carry that through? What does that look like in practice? So are you aligned with, you know, you absolutely have to be ready and willing to, you know, live the values, the mission of the institution you go into, because you're going to be asked to model those and carry those with you into every setting, into every scenario. But you better go into it now, still feeling attracted to also digging into the

the nitty gritty, getting into the dirt. The easy handoffs of the past, the long serving president handing off to someone else, sometime the person who they had groomed themselves from the provost role or something like that, we're just not seeing nearly as much of that. We're seeing a lot of internal hires, interims getting the job because they're familiar. They already know where the skeletons are. They already know how to read the books. They already know what the challenges and opportunities are alike.

But in my case, I'll do just a sliver on that. I started thinking about where might I like to work and what might be available there. I came upon an institution that had an opening. In this case, it happens to be a presidency. I was not automatically wired for a third presidency. But I was looking at it in such a different way than in the past. In this case, it was what are the programs? What are the finances like?

Gary (17:15)
you

Thom Chesney (17:35)
What is the debt on the books? What are all the things I believe in, in addition to their mission and so forth? And in this case, the programs are very health aligned. Consciousness -based counseling and therapy, art therapy, regenerative leadership. So things I believe in are kind of part of my own DNA, right? I hesitate to say there are a lot of places I wouldn't, I couldn't see myself going to because if I'm not wired for all of that,

Then there's a learning curve to go with the slings and arrows from the outside, from the inside, all of those things. Few presidents or potential presidents have the bandwidth to do all of that today for something that they aren't all in believing in and living it out 24 seven.

Gary (18:25)
So let's move on to the speed round. And this just, I've got five questions and just kind of quick responses from you. And the first one is the FAFSA debacle. What's the best case scenario and the worst case scenario this fall?

Thom Chesney (18:42)
Well, the best case scenario, something we've touched on lately, is it's going to get boards and other leaders and institutions thinking very differently about how well prepared they are for another pandemic kind of situation. It's going to catalyze, accelerate, and really change behaviors in terms of how they approach that. So it doesn't sound like much of a best, if you will.

But if you're literally looking at your institution in a different way, not the status quo, if you believe in the saying, we're designed perfectly to get the outcomes we achieve and the outcomes aren't looking good, then you've got to behave differently. And FAFSA is going to be another one of those triggering points, I think, to do that. The worst case scenario is we're going to see a drastic decline in participation. And by the way, we're talking mostly, we read mostly right now about incoming new students. FAFSA is a retention piece as well.

If you've not gotten to my returning students financial aid package yet because you're still trying to package new students, you may not see my student return to your institution. So now you've got a double whammy. You've got a retention hit and you've got a new student hit. And of course, the students that are most sensitive to that are those who already see FAFSA as a barrier. You know, and many of them are ethnic minorities, the most sensitive to price, all the different demographics related to that.

I am a hardcore, hard optimist. I think we're going to see FAFSA shake out even as a reason for financial exigency the way the pandemic was used by some institutions.

Gary (20:21)
And that kind of ties into the next question is, and I had four experts on last week, and we did a panel podcast on, will there be a federal bailout of private colleges? Yes or no?

Thom Chesney (20:33)
I don't think so. I think we're past that point. Too many people know too much, pay attention too much, have seen where it has been tried and failed, where states have tried to do some kind of a program or some mechanism has been there. And also just add to that how the general public just very broadly feels about the value of higher education. And do you want federal, do you as John Q, Jane Q public.

Want to see some of your tax dollars going to bail out a private institution? No, no, no one bailed out the restaurants. No one bailed out. I mean, they're going to default to.

Gary (21:04)
Yeah, yeah. Right.

Excuse me, Ryan Craig had an article in his Gap newsletter last week, and he was talking about how essentially the financial monitoring of colleges has failed on three levels. The education department, accrediting agencies, in this case, middle states, and board of trustees. And a specific case was the University of the Arts. And so my question to you is, and there's a lead up to this, so bear with me, is in for -profit organizations, they do quarterly, they release quarterly financial statements. Big companies even have calls saying, here's how we're gonna do well or not.

Do you see in the reasonable future that colleges may move of their own initiative or mandated to have audited quarterly financial statements released?

Thom Chesney (21:52)
they'll be audited, I think there's going to be a lot more attention paid to them and demand for them. It's going to start with the publics, look at what's happening in legislatures in terms of asserting more control or wanting more access to information from their institutions. So regional publics, flagships, land grants, all of them. It's really hard for privates to escape that. I think, but I would add to it,

There's a lot available right now that's not being used. You look at it, I look at it. I look at it when I'm interviewing, and I look at it when I'm at an institution. The IRS 990s, they lag, but you've got deep dive information that can tell you a lot about the health of an institution, right? I don't see even many of our print and broadcast journalists just taking that next level dive and asking those questions. And Gary, that's a piece to the puzzle as well.

this call for transparency that's wanting to get information out there means you got to ask those questions. If your local paper says here's the enrollment trends for our one or two local private colleges this year and that's the story year after year they're failing in their role as journalists because they should be asking here's what it is here's what net tuition is and here's what their structural deficit is but they're not asking for that.

Gary (22:57)
Yeah, absolutely, absolutely.

Yeah, trust me, I live that way too often. So last two questions. And this next one, you get a chance to tell me I'm wrong. Please feel free to do so. I've often called the accrediting agencies, and there are six or seven across the country, as nothing more, Tom, than iDotters and T -Crossers. Am I right or am I being too harsh?

Thom Chesney (23:27)
I know where you're coming from. And I would say you're at least partially right. Here's the way I look at them. And I felt this way for some time. Is they're like the outside member on a dissertation committee. So if you're going through your doctorate, and in my case it was the English department, four or five members of the English faculty served on my committee. And then there was this person, this faculty member from the history department who was there to keep them honest. So now think of the committee members within the discipline as

the governing board, the leadership team. But there's this outside person who has a chance to say, what about this? Or I don't think you're paying attention to this. Or you're not treating the institution, the PhD candidate, as well as you could. Or you're treating them too easily. You're not asking the hard questions. Now, caveat. I think our regional accreditors could do more of a stronger version of that and ask more questions and also be much better communicators.

Instead of, you'll move away from crossing T's and dotting I's when they take the opportunity, as I believe they have, to publicly share more summaries of successful actions taken by institutions who are doing excellent, excellent work, quality control, and also really pinpointing what's happening at others. What are they afraid of when so much of what they have, the information they have is public?

for them to go out and say, here's what happened at College of X, and that's why they're going on sanction. They typically print one line, have them required to put it on their website, and then step back and say, talk to the institution. No, the creditor, if they're truly doing quality control, I want to talk to them. I want to talk to that manager, if you will, and say, what happened?

Gary (25:09)
Yeah, yeah. So final question. Now, I know you're going to New Mexico here in the next month or so. And so New Mexico is going to be the first answer to this question. But pick one state. If you had to send a child to college right now, and New Mexico is the first state, I understand that. Pick one state you would prefer to send that college student to here in the fall of 2024 and why.

Thom Chesney (25:35)
So in New Mexico is that state, not just because I'm moving there, but because of the opportunity scholarship for undergraduates and residents to be able to go to tuition and the legislature makes some great decisions there and funding that long -term. Not for a graduate institution like mine. So I don't stand to benefit other than students who would love to come into our programs if it makes sense for them. So I think about this a little bit through the lens of that Forbes article from last fall that looked at

cost of living, tuition fees, all of those things. I think South Dakota, Montana, some of the upper Midwest plains, states came into that. And I would tend to buy into that by saying, a student should look programmatically, do they have the things that you want to do? But if you're going to go away, if you're going to move, can you afford it? Because that goes back to that question of cost. I can get a great scholarship somewhere and then get there and have sticker shock over rents.

or when they add in the room and board, which is not part of my packaging or something like that. But here again is the wrinkle for me. The proliferation of even better and quality online programs may take what state to live in out of the question and what high quality online hybrid programs, limited residency programs can I participate in? And that's gonna be a key question. I think some of our COVID students.

who may have been successful learning online and like that flexibility, are going to look more at limited residency and online programs as well.

Gary (27:05)
Interesting, interesting. Well, you know, in about 25 minutes, Tom, we have covered a lot of higher education. And again, Dr. Tom Chesney has been my guest today. He's headed here in about a month or so to Southwestern College in Santa Fe, New Mexico as the president there. As I understand, Tom, it's a graduate programs, graduate program.

Thom Chesney (27:09)
Right now.

Yep, all graduate programs, yeah, master's degrees and one doctoral.

Gary (27:27)
So Tom, your perspective is fascinating in many ways. Having worked with boards the last 18 months, having led a couple of colleges and on the other ways, we are headed into a really deep minefield of challenges, continuing challenges prior to education. And I bet, you know, I get together three or four years from now, we're gonna look back and say, you know what, we were in the middle of it back in 2024, we just didn't know it. So Tom, thank you very much for your time today. I look forward to talking to you again in the future.

Thom Chesney (27:56)
My pleasure, Gary. Best of luck to you. And you're right, we'll be sitting down in three or four years, if not once a year for coffee. Take care.