2024 College Viability TOP-bottom reports: Private Michigan Colleges (regional)

Hi, it's Gary Stocker with another episode of the College Viability Report, and today we're looking at the 26 private regional colleges in Michigan, and we'll be using the 2024 Private College Viability App for executive analysis. And you can see on the screen there are 26 private regional colleges in the state of Michigan. And let's just kind of take a look at the highlights first. And one of the things we have in the executive version is we look at the 8-year changes. So I'll click on that 8-year changes, and you can see that we'll be able to track all of the changes across these 5 fields for all 26 of those colleges. In addition, we've calculated the averages for each of those 5 fields. So FTE enrollment, the average was down 800 students, so you can compare that. The average graduation rate, 4-year graduation rate, was up 5%. You can compare that on your own. And of course, as in all data reports, you can click on the header to get them to sort. And it goes both ways. And you can do that all across these reports. And as always, pause the video to be able to compare and look at colleges that you want to compare. Let's go back to the menu and let's take a look at the Ratios page before I get into the individual reports. So the ratios page takes those 26 colleges, and we've done some ratios for them. Again, you can look at the ratios on your own, pause the video to do that. The one I want to focus on is associated with total revenue over expenses, and this is for the year 2022. Let me just click and resort this so we can see, of the 26 private colleges in Michigan, that only 5 generated more revenue than expenses. So for example, Spring Harbor had $1.22 in revenue for every dollar in expenses, $1.17 all the way down. And Calvin University, the Compass College of Film, you know, close to break-even. Let's flip that though one more time, and let's look at some of these colleges. Now some of the data is so bad I don't think they know what they were doing, but let's look at these colleges like Aquinas. And Kiper and Lawrence Technological and Hope. They're generating 82 cents in revenue for every dollar in expenses. 84 cents in revenue. You know, even at Clare University, almost 90 cents in revenue per dollar in expenses. Colleges, as can any business, can survive with that for a while, but at some point you want to be able to generate more revenue than expenses, obviously. And then one special part of the Executive Analysis version, I can click on any of these colleges. Let me right-click on Alma College. And I've created some drill-throughs so we can actually drill through Alma College. And you're gonna get, you're gonna see a single screen report of all of the data for just Alma College. And again, you can pause the video to look at it for yourself, but you can see they had $24,000 in revenue per student, per FTE student, $43,000 in expenses, and a total revenue to expense ratio not very good at all. The colors are just different ways to highlight the different types of graduation rates. Interestingly, with the expense issues they have, Alma had a 54% 4-year graduation rate. That's better than most colleges. Let's go back and start looking at the individual college reports. So I'm gonna go back to the, to the menu, and I always go to FTE enrollment first. Let's take a look at that. And again, pause the video as appropriate to look at the colleges you wanna compare. And I've got this sorted in the worst case scenario now. So our data is from 2015 to 2022, the last 8 years of reported IPEDS data. And you can see that Baker College is down almost 14,000 students, down 84%. Draw whatever conclusions you may, clearly not a good number, but you can do that for all these other colleges as well. And if you have a version of the app, you can right-click and drill through on these individual college data points as well. So down, down, down, the percent down might be more important than the absolute 8-year change, but look at the pattern. Almost all of the 26 private regional colleges in Michigan had decreasing enrollment over the last 8 years. Let's flip it one more time, and there are 6 who had increasing enrollment in the last 8 reported years. That's not uncommon. When I do these reports for other states, they often have that same kind of very small number of colleges that have increasing enrollment, and it's the comparisons that matter. If you're looking at colleges, it's the comparisons that matter. If you're evaluating colleges, it's the comparisons that matter, one against the other. This is kind of the, kind of the Kelley Blue Book, if you will, on comparing colleges. We're kicking the tires on the college's finances, enrollment, and graduation rates. Let's take a look at those graduation rates, and we'll look at the 4-year graduation rate. And we've coined a term here at College Viability called Coin Toss College. Now, I'm going to sort these 2020, these 4-year graduation rates for the 26 private regional colleges in Michigan. And our standard, our threshold, you can pick whatever number you want, is 50%. If a college can't graduate at least half its students in 4 years, we call it a Coin Toss College for obvious reasons. And you can see in Michigan there's about 8 colleges out of the 26 that graduate at least half of their students. Some do really well, Hillsdale, Hope. And others, half of their students in 4 years. Let's flip that number. Let's start looking at the 40%. And these numbers from Adrian College all the way up, down really, all the way up on the chart. I make the argument, for better or for worse, that if a college can't graduate at least 40%, 4 out of 10 students that start there in 4 years, they're not really a college. They're more of a tuition collection business, a tuition collection agency. They're collecting tuition, but they're not graduating their students with any kind of consistent success. And we also carry the 6-year graduation rate for comparisons. Our threshold on that is 70%, but I'm not going to show that. And let's look at tuition and fee revenue. And again, most private colleges are reliant on that tuition and fee revenue for most of the revenue sources. Let's look at the 8-year change. Again, I've already got it sorted so the lesser colleges show up first, and we can see Baker has lots of issues. Davenport, Calvin, Northwood, they've got all sorts of issues in the news recently. They just laid off 9 people. They had to raise $12 million in a month, and they raised a million and change, something like that. And again, it's probably better to look at the percent change, but nonetheless, look at all the colleges who over the last 8 reported years from 2015 to 2022 had decreasing tuition and fee revenue. That's over 8 years. Could you run your business, whatever it is, over the last 8 years with decreasing revenue over that entire time period? Let's move on. Let's take a look at the endowment and the case that we make for the endowment value. And I'll kind of customize this view. Is again, here at College Viability, we have a minimum threshold. And that minimum threshold is $50 million, 5-0 million dollars. If a college throughout its history, and in almost all cases it's decades, and in some cases it's centuries, hasn't been able to raise $50 million, we make the case they don't have the systems, processes, or benefactors and stakeholders available to help them raise those funds. So let's take a look at the endowments then. And we have the endowments per FTE. So this is a relative comparison. So Clare University has about $1,800 per student in their endowment. Let's flip that. And Hillsdale has about half a million, more than a half million per student. Draw your own conclusions, but that's the capacity of an organization to raise gifts from whatever source and for whatever reason. Again, it's the comparisons that matter Does raising $52,000 per student different between $10,000 and $10,000 per student? You decide. I can make the case that it certainly is, but again, it's the comparisons that matter. And then lastly, I'm gonna take a look at institutional grants. And IPEDS calls this unfunded institutional grants, and they also have a category for funded. And funded are those colleges or those endowment funds that have a dedicated purpose. The John Smith Nursing Scholarship. And Hope College has $49 million worth of funded scholarships. The unfunded scholarships are exactly that. You and I know them more commonly as merit aid, as presidential scholarships, and as most scholarships. They are not actually a transfer of funds from one college to another. It's just a discount, just like you get on cars and computers and clothes. And let's go down and look at that then. And let's look at Albion College. And from 2015, they've gone from $21 million to almost $59 million in unfunded tuition discounts, up almost 200%. Albion College is welcome to offer whatever discounts they want. It's great for the students. But at some point, one has to wonder if they're generating the revenue to be able to maintain their mission, to meet payroll, and to keep the lights on. And the example I've always used is Iowa Wesleyan University, which closed in the spring of 2023. They were actually able to grow their enrollment over 300 students over the prior 8 years, but they had increased their unfunded tuition discount so much that they were unable to meet payroll and to keep the lights on. They closed in the spring of 2023. So again, it's the comparisons that matter. A college like University of Detroit Mercy is trying to manage that unfunded discount, credit to them, in terms of a business process. Again, their students aren't getting the tuition discounts. And we can flip that, as always, and you can see those colleges that have the biggest 8-year change, what their amounts are. And we can flip it one more time to take a look at those who tried to manage that. Baker College, 'cause they have, they've lost so much. But again, it's the comparisons that matter. And then I said finally before, but I'm gonna say finally one more time, and I'm gonna take a look at graduate student enrollment. And I've got it set up to show those colleges with graduate students. And the point I wanna make here is look at even these colleges, some with substantial graduate student enrollment, how many of them, what percentage of them have decreased graduate student enrollment. Now I'm just starting to see stories in the media about that very issue, that graduate student enrollment is starting to shrink in many places, and that will be a factor in determining the financial health and viability of some of these colleges as well. So what does this all mean? Whether you're looking at this data from the perspective of a college leader, from a faculty member, from a staff member, or even a student or family member or other stakeholder, as I've said many times during the video, it's the comparisons that matter. It's the trends that matter. If a college's enrollment has gone down for the last 8 years, don't tell me it's going to go up significantly next year or the year after. If the tuition and fee revenue is down for the last 8 years, that's the pattern, that's the trend. If the graduation rate is abysmal, even if it can be improved, it takes a while to do that. So in the market that we're in right now with higher education, with so many colleges struggling, and even with the FAFSA debacle about to play out with probably decreased enrollment in the in the fall of 2024, this data matters because it looks at those last 8 years and the good or bad trends behind them. I'll make sure to include a link for this version of the College Viability app, as well as others for both public and private colleges, in the show notes. My name is Gary Stocker with College Viability. Mm-hmm.