2023 Closed Private Colleges: Using the 2024 Private College Viability App to review and analyze.

Hey, it's Gary Stocker again. It's a big week here at College Viability in mid-February 2024. We have locked down the 2024 version of the Private College Viability App, the Executive Analysis version, and special versions for faculty and staff and students and their families will be ready in the next couple of days. So I wanted to take a few minutes and actually go back and look at some of the private colleges that closed in 2023, and there are 13 of them that we're going to look at and see how they compared, see how the 2024 College Viability app can be used to look at colleges that have already closed, but more importantly, to see what kind of trends and patterns that we can use to at least identify colleges that are higher risk for changing their business model or mergers or even closing. So you can see the 13 private colleges that have closed in 2023, and my source is an Inside Higher Education story. And I'll scroll down to quickly show you the list. Let's go ahead. I'm going to kind of use the, the 32 reports and scroll around to give you a feel for what kind of patterns, data trends that we see for these 13 closed colleges. And of course, we always wanna start off with FTE enrollment. So let's take a look at going there. And you'll see a better list of the colleges. And I actually sorted them by state to see if there were any pattern. 3 out of the 13 in New York. And New York State is one of my 4 high-risk states for private college closures. The others are Pennsylvania, Iowa and Wisconsin. You can sort this as we could for with previous versions of the app, and we can see the patterns and trends. Let's take a look at the 9-year change. And interestingly, one of the colleges that closed was Iowa Wesleyan University. Their enrollment grew almost 400 students, from 400 to about 800, in the last 8 reported years. And again, the 2024 version includes the years 2015 to 2022. Let's take a quick look at the chart because we've added that functionality, and I want to show that off. And we We can see that the downward trend is pretty consistent, some more obvious than others. You can say something really big happened to Cardinal Stritch. Cox, as you'll see, doesn't always report the data consistently. Finlandia dropped. Hodges, Iowa Wesleyan went up. Lincoln Christian, Magdalen was a really small college. Medaille dropped overall. They bounced around a little bit. Presentation was down. And the College of St. Rose in New York. But let's go back. To the home page. Let's take a look at institutional grants because I want to make a point here. And we track both funded— I'll come back to that in a little bit— but I want to show that the unfunded institutional grants— and we have the help, the tooltips here that define that— and these are effectively unfunded scholarships, unfunded merit aid, which colleges more frequently offer than the funded version you know, the Gary Stocker Nursing Scholarship is a funded version dedicated to providing nursing education. There is no such thing, that's just an example. But look at Iowa Wesleyan, from $4 million in 2015 to $13 million in 2022, a 200% increase in what they're giving away to get students in the door. And they closed. The 8-year changes, and these are the changes in values for the, the the fields you see reported, the columns you see reported on the top from 2015 to 2022. And you can see the comparisons and what we're looking for, for example, like admission yield, let me flip this. We're looking for trends and Cox College, their data just, they're not submitting it right is my guess. Nobody's admission yield increases 84% or very few. Look at the pattern at the bottom. Let me flip that again. And you can see if there is a pattern, it is significant declines in the admission yield. Now of course admission yield is the percentage of students that a college accepts that actually show up, attend classes, and pay tuition bills. I'm gonna look at the 4-year graduation rate. This is the change, this is not the actual. The 4-year graduation rate, it's up for some of these, and we'll see in a few minutes that the actual rate is not good. Not a lot of predictability here, but there's another feature that we added, another function that we've added to the 2024 version. And we took this set of 13 colleges, And the overall average for those 13 is enrollment was down 522 students. The admissions yield was down 3.5 points. The graduation rate was up about 5. The percent admitted up about 6. And the full-time retention rate down over 15 points. So now we can actually look at the averages for each of these 5 fields and compare them to the set of colleges that I selected. And you can select your own set of colleges to get these same kind of comparisons. There's nothing obvious that I wanna show here, but again, it's another way to compare colleges. Now these are all closed colleges. When you're looking at colleges from your organization's perspective, your college's perspective, if you're faculty or staff in the faculty and staff version, or you're a student or parent, it's different colleges that you look at. These numbers will always be different based on your selection, but it's another way to compare what's going on. A new field that we've added in 2024 is average net price, and this is the change over the last 8 reported years. And the overall change was down about $400. You can compare that here, but you can see the patterns from— we'll use these presentations as this on top. $22,000 was the average net price in 2015 and $27,500 in 2022. So you can see the patterns and the trends, and again, there's no obvious pattern here. We can see that some of them had significantly lower lower tuition probably contributed to their closing. But we can also see that some of them were able to raise tuition. Now that could obviously also contribute because if you're raising tuition and fees, you're probably going to have more students select other colleges. It's not an absolute value. There's no single absolute predictive value. I'm going to suggest 5 or 6 factors to look at based on this and other research that I've done here in a couple minutes. Another new feature, another new function that we've offered for 2024 is looking at the last reported data, the last year of reported data, 2022. And we have— we've come up with 8 ratios to look at. And you can see the ratios listed across the top of the screen. And the one that I like to look at that's most suggestive here— and these are just ones we've selected, you may have others you want to suggest for future versions of the College Viability App— is total revenue to expenses. So in this case, Presentation College had 123% revenue over expenses. They made a couple bucks. But look at the number of colleges— 10 of the 13, some with significant deficits— didn't have revenue covering expenses because their value is below 100. It would be an equal match, of course, if the revenue and expenses ratio was 100. Anything less than 100 means that it was not net cash. Anything above that means there was some kind of profit out of the whole, whole essence. This column here on total assets over liabilities is also called the current ratio. I can sort that And the higher the better in general. There are some industry standards. I'm not sure higher education has a standard current ratio that folks look at, but the higher the ratio, the better. So Cardinal Stritch had a lot more assets than liabilities when compared to Iowa Wesleyan. Use your own judgment on how to compare that. And then because I am such, I have such a focus on the 4- and 6-year graduation rates, I've added an average over the last 8 reported years of both the 4- and 6-year graduation rate. So let's just look at 4, 'cause that's still kind of the standard. And really, only one of these closing colleges, Magdalen College in New Hampshire, graduated over 50%. Is that indicative of a college that will close? Absolutely not. There are hundreds and hundreds of colleges with 4-year graduation rates below 50%, and even the 6-year graduation rates, our threshold on that is 70%, and none of these 13 colleges met that. Met that. But in my mind now, in the coming months and years, that 4-year graduation rate will be becoming a focal point for more and more students and families. And here's why: because if you can't graduate at least half of your students over 4 years, why are you even in college? And I know some colleges will say, well, hey, we accept everybody. That's fine, accept everybody that you want. But it's reflected in your graduation rate. And if consumers start looking at that 4 and even 6-year graduation rate and it's lower than your competitors, I would be concerned. Anyway, we just look at revenue per FTE, and that's per FTE student, total expenses per FTE, and that's FTE student enrolled. And you can do your own comparisons on that, um, for colleges that you're looking at. And then the last IPEDS report from the National Center for Education Statistics that I want to look at is tuition and fee revenue. And again, we can see the 8-year change. You can look at the individual numbers on your own, but we can see of these 13 colleges, 10 had decreased tuition and fee revenue over the 8 years. Let me flip that, and you can see the 3 that had increased, although Magdalen College was not even couch money. Iowa Wesleyan had a couple at $2.5 million Cox College at 4.6. You had all 13 closed in 2023. We saw the case behind Iowa Wesleyan, and they gave away the store to get students to enroll. Let's do something quick. Let's go look at Cox College here in Missouri, see if they even reported the data on tuition subsidies, institutional grants. Let's take a look at institutional grants. Let's look at Cox College. Yeah, they they didn't report the data for the first 5 years, and they're not giving away much. So theirs wasn't really associated with giving away the store like Iowa Wesleyan was. And lastly, let's take a look at retention. And again, I'll sort this by the 2022 number. You can see the 8-year change and the percent change on your own. You know, some decent numbers at Magdalen, some not good at all numbers for many of these colleges. No absolute pattern. Unlike what we saw with admissions yield. But again, you compare more than one factor. And say you're looking at a college that's really strong. It's not in this list. You're going to see those patterns jump up. You're going to see maybe better graduation rates. You're going to see higher retention rates. You're going to see enrollment growing or at least flat. So those are the kind of things to look at. And as we wrap this up, there are 5 reports that I use and I would encourage others to use in terms of assessing the financial health or comparing financial health. And viability of colleges in the United States. And those 5 are FTE enrollment, they are institutional grants, the unfunded institutional grants, discounts if you will, merit aids, most scholarships. They're the 4-year graduation rate, they're the full-time retention, and they are the tuition and fee revenue. There's no absolute pattern. You can't use those 5 as an absolute predictor but they are good reports to look at because colleges, these colleges themselves submitted that data, so it's from them. So it's an assessment that comes from their internal data. You can use it to make your own decisions on which colleges appear financially healthier or financially weaker, which colleges appear to be more viable and those that appear to be less viable. Again, use your own judgment. The College Viability App The Executive Analysis version that you're looking at here and the versions that come out shortly for faculty and staff and for students and their families will provide just smaller subsets of these reports to be able to compare colleges from the perspectives of both of those different groups. This is Gary Stocker. This has been using the 2024 Private College Viability App, the Executive Analysis version, to look at colleges, the 13 colleges that closed in 2023. 23.