In this episode of the College Financial Health Show, hosts Gary Stocker and Matt Hendricks analyze Clark University’s (Massachusetts) financial condition. They highlight several red‑flags: the endowment’s growth sits at the 25th percentile and recent draws are unusually high, indicating unsustainable appropriations. Revenue has surged 45% (top‑quarter performance), yet expenses have outpaced it, rising 52%, creating deficits despite strong cash flow. Net tuition revenue jumped 33% (75th percentile) because per‑student tuition rose from about $18k to $24k, while enrollment remained roughly flat (3,100‑3,700 students). The university is undertaking large construction projects ($19M, $4.5M, $2.8M, $2M) that have driven occupancy costs up by $2.5M, a cost now high relative to revenue and FTE. Marketing spend has doubled, contrasting with the stagnant enrollment and flat admission yield, though the yield remains steady over eight years. Graduation rates are strong, and the hosts examine internal market‑share data by major, noting where Clark is strong and where it is weak. The overall assessment is that while Clark shows impressive revenue growth and graduation outcomes, its expense trajectory—especially construction and occupancy costs—poses a budget squeeze. The hosts recommend tighter alignment of spending with realistic enrollment projections and strategic focus on majors where the university already has market strength.
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It is the last Tuesday of April 2025. Spring has arrived in most of the country. Welcome back everybody to the College Financial Health Show with Matt Hendricks and Gary Stock, where each week, of course, we look at the financial health and even the viability of private colleges across the country. Well, let's take a look at Clark University. That's C-L-A-R-K. There's a lot of versions of Clarks out there. Clark University in Massachusetts. Dr. Hendricks.
Yeah, let's go. I'll pull the financial compass back up. Be careful on this. Uh, we have Clark Atlanta, Clark University, two Clarks, one with an E.
This is the one, right? That's why, that's why I spelled it out. Cause there's a lot of Clarks out there.
Yeah. Clark University. Okay. So similar thing here. We got small deficits. Not— I wouldn't be too worried about that, although again, it's not sustainable. But you have plenty of time to fix that, probably have net cash positive. Um, what is, what is concerning to me though, again, is we have an endowment growth here that is right at the 25th percentile. That's very low. And, uh, I'll just take a look. I think it's because, again, we have high appropriations. So another theme of today's Yes, 6.25.
Look at that trend. That's not good.
The last time they had a normal endowment draw, which was even high, was 2016. So for some reason, the endowment draws have just kind of gotten out of control, which makes— again, this— these should all be shifted down. With a normal endowment draw, the net income would be even lower. So they do have financial problems. That's the takeaway there. They need to right-size those appropriations again for the same reasons we just discussed. You're going lose competitive edge the longer that goes on. But interesting thing about this school is that I kind of get a sense that there's like growing pains here. Not in that they're growing enrollment, but their revenue is growing like crazy. So I don't know if they acquired some other school or what, but probably would be easy for me to check. But there's a lot of high-level stuff I'm trying to cover here with all 3 of these schools. But let me just show you their revenue. Total operating revenue percentage change, and that is excellent, up 45%. That's in the top 25% of the top in the country.
Yeah. Yeah.
And so how the heck do they have deficits? The easy answer is, well, they're—
I know, I know.
This is a really simple math, right? Their expenses have grown faster than that. Their expenses are up 52%. So I think we had a school like this several weeks ago.
We did. Yeah.
Yeah, revenue is growing so fast, but they're just spending like crazy as well. So, I mean, it's an easy, easier fix than, hey, our revenue is shrinking and we got to shrink expenses faster than the revenue shrinking. It's a little bit, a lot different story when your revenue is growing. Net tuition revenue is way up too. Net tuition revenue percentage change, that's 75th percentile again, up 32, 33% on net tuition revenues. Great. But there's these sharp changes here. I just wonder if they do— might do a Google search and see if they acquired some school, or what does their enrollment look like? Yeah, so that's the— this is the curious thing. So keep, keep this in your memory. Uh, net tuition revenue is up a lot, 33. Yeah, but students are not. Um, students are fairly flat. There was a recent increase though. They were down 15, 16%. Now they're up 2% raw value.
Fascinating case study to see what's going on there.
3,100 to 3,700. I wonder if they just acquired a smaller school or something. But, um, so here's the— here's one of the things. The, the school is growing its revenue mostly by— well, you can back out what we just did, but their net tuition per student must be a lot higher than it was. And you can see that they used to be about $18K and now they're $24K almost, which is amazing, right? They've got fewer students, but they're paying a lot more. So their net tuition revenue is way higher. So actually their students were up a little bit, right? But not enough to explain that huge surge in that tuition revenue. Okay, so how can they balance their budget and make this a little bit more Sustainable perhaps. Yeah. I think what's happening here is that they're building a lot. All right. And the reason I'll show you, I'll show you why I was taking a look at their contractor spend. So this is Clark University in Massachusetts. So you've got a construction contract here for $19 million, another one for $4.5 million, another one for $2.8 million, another one for $2 million. Remember, the school's not really growing. So it's a little bit curious FTE-wise why they're building so much, but it could be replacing older buildings and stuff like that and keeping the square footage constant. Not sure, but I doubt that. So here's the red flag for me. I added a new expense from the 990s called occupancy costs. All right. And so this is really the expense that you need to focus on when you're building buildings. It's not just the construction, right? You got to pay to heat this thing, cool this thing, maintain it. And so on. And see this sharp increase here? That's a 5.3 to— that's $2.3 million, right? $2.5 million increase in occupancy cost. And their occupancy cost is now higher than normal for their revenue. And for FTE, it's way higher than normal. So what the heck is occupancy cost? I just pulled this straight off the 990s. This is the actual definition of occupancy costs, line 16 on the—
Interesting.
So it's the cost of heat, power, lights, other utilities, property insurance, real estate taxes. Do universities pay real estate taxes?
I got to think they do in some places. Probably varies by state.
Mortgage interest. Okay. So there's a significant increase in the high occup— occupancy cost is about $2.5 million. Without growing the enrollment and growing revenue even more, building these buildings may have been, um, not the greatest decision, uh, and it's contributing to the, the, the budget squeeze. Um, but I would double-check, you know, if they're projecting their enrollments to go higher, maybe that's going to happen in the future and maybe this will all work out, but right now it's causing some pain in the budget for sure. But I'll pass it back to you, Gary, 'cause that's kind of the unique thing.
Yeah, that's a dangerous proposition, Matt, to assume that enrollment will grow. It's kind of they're hoping a build it and they will come scenario, and it's risky for the they will come in such a tight market when we've talked many times, there are too many college, too many college seats and not enough students willing to fill those. Again, so many fascinating details, but when we do, when we review this college again 5 years from now, it'll be interesting to go back and see today's show and see what has changed in the 5 years for Clark with no E, Clark University in Massachusetts. Let's take a look at— again, we're going to see graduation rates that are impressive. So the 2025 College Viability App, the executive analysis version, let's take a look at 4-year graduation rates. And like all the colleges we looked at on the, on the total show today, you're just looking at one version of that right now. Clark University, look at that, Matt, impressive. And you know, I know— I'm guessing when you do your assessment here in a minute, you're going to say they're fine shape with a long, long, long runway. So they're not really in financial trouble. So this is an example of a college with strong graduation rates. And you know, that's my soapbox theme. And really, I didn't get a chance to jump on that soapbox today because I picked 3 colleges that are doing pretty well on graduation rates. Since admission yield is our theme, let's take a look at admission yield at Clark. Pretty flat. Interesting that with the increase in tuition, right? That's what you just showed.
Yeah.
Their yield has effectively stayed the same, really hardly any variation at all from year to year. Over the last 8 years. Impressive.
Mention, Gary, there could be a reason I forgot to show the marketing spend. Unlike the other two schools we looked at that halved their marketing spend, Clark's marketing spend is doubled, right, at the same time that this high price sort of slow enrollment growth is happening. But their yield looks amazing. So, um, maybe—
yeah, yeah, this tough market, they're doing something right. And maybe it is that, and maybe that advertising— again, this is just uneducated speculation, maybe that marketing theme is, is attributing to the uniqueness and to the selectivity, and students are saying, you know what, I'm buying that selectivity. And so they're, they're consistently saying, all right, I'm going to accept your offer. Now, 14 is not a great number, but it's not a bad number, and it's consistent in a market where most colleges have a decreasing admissions yield.
Yeah, they probably have a ton of apps And, uh, you know, they can deal with a really low yield rate if they're admitting a lot of students, right?
You gotta be careful. Clark University in Massachusetts. I can see on the little map here it goes to the right state, so I know I'm in the right spot.
So this is Clark University.
Again, we've done this before. This is internal market share, and we can look at where they are strong, and we can see the majors that they're strong in toward the bottom here, and we can see the majors where they're not strong in. Now, if I'm a college provost, if I'm a college dean, I'm looking at this kind of data mat and I'm saying, all right, where can I look to grow where I'm already strong?
And what are the areas where if I'm never going to get any decent market share, why, for example, am I playing in criminal justice? Because if we were to look in, let's do that. Let's go to criminal justice and we're going to look at the entire private college market share in Massachusetts. So I'm going to choose Massachusetts. I'm going to choose the sector is going to be private markets, private college, excuse me, private 4-year nonprofits.
And it's going to be—
oops, bachelor's level is fine. The major that I want is criminal justice. Let's see what the market share looks like there. All right, quite a few players, private college players. And our college was Clark. All right, so there's Clark University. Somewhere it's going to be here. There it is at the bottom. Okay, so Matt, you're the dean of whatever college this is at Clark University. What are you going to think about when you have 2/10 of the market share for private colleges in Massachusetts? We've talked on— I talk on my podcast regularly but not on, but not on this show that much, that colleges trying to be everything to everybody is not a good approach. And I, I think this Market Share app gives colleges more data with which to compare the market share for individual majors. And there's 64 diverse sets of majors there to say, hey, where am I strong? Where can I take market share where I'm strong? But more importantly, in this day and age when cutbacks and layoffs are common almost daily in higher education. Look at those areas where the data suggests I am so small that I can't nearly have as good a program as others. Matt Hendricks, Clark University, Noe, Massachusetts. What's your assessment?
Yeah, I think they're in a good spot with the revenue growth that they have. That the— you just worry that their expenses are clearly growing faster than the revenues, even though revenue is up 45%. One of the fastest-growing revenues in the country, they've managed to spend faster. So they might look closer at the spending growth, make sure it lines up with their projections, make sure the projections are right as well. Keep in mind that the FTE is not really growing very fast. So if that doesn't change, then maybe growing the campus with more buildings and stuff like that may also be a mistake. But we would need to dig in more and see what that all looks like.
So you just got done watching the Financial Health and Viability Review of a college you're interested in, a college you want to follow. And you heard Matt Hendricks, you heard Gary Stocker talk about some of the observations that the data that you see, both in the Private College Advance Compass and in the College Viability apps and the College Majors Completion apps, it's the data you can use to make more informed decisions. Now, can you get this anywhere else? I don't know, Matt, that this kind of data is available anywhere else, especially at the rates that we have. So drop me a note. Again, I have contact information in the show notes. Drop me a note if you have some interest. Let's do a dog and pony. Let me show you the apps, um, more specifically to what you want. Let me show you the Strategic Compass, which is a phenomenal tool at a price that is so low that you will want to buy two of them. I'm being silly, but they're, they're great. Great tools, and you're going to find your competitors using them. And if your competitors are using them, you're going to find yourself at an even more competitive disadvantage because they're going to have data to make decisions that you aren't. So for Matt Hendricks, I'm Gary Stocker. Thanks as always for watching the show. We'll be back next week with 3 more colleges to review on the College Financial Health Show.
