Aurora Univ. (IL) and Muhlenberg College (PA): Financial Health & Viability Review

Welcome. It's time again for the College Financial Health Show with Matt Hendricks and Gary Stocker, where each and every Tuesday, even the Tuesday after Labor Day, we're here doing our work and preparing and presenting the financial health and viability of private colleges throughout the United States. As always, thanks for making time, and make sure you share the link to this video with others. Dr. Matt Hendricks, what are we looking at today, sir? All right.

We have 2 colleges, and one is Muhlenberg College in Pennsylvania, and the other one's Aurora University in Illinois. And like usual, I'll bring up the Advanced Financial Compass, and I think we're rolling.

All right.

So I'm going to do the same sort of presentation as before, as always, usually, or last few times. Putting 2 schools on the same graphs and discussing. So I think I'm gonna put, yeah, I'm gonna put Muhlenberg as the target school and Aurora University as the sort of comparison. So blue, blue is Muhlenberg and green, remember this, I gotta remember this, green is Aurora. All right, so first things first, As I usually do is go through and just check the financial health indicators to get a sense of the context for all the policy discussions. And when I do engagements with clients, that's really the first step. Figure out what kind of shape the school's in. Are they doing well, looking to make investments, growing, or are we looking at sort of like, right, like a turnaround sort of situation, right? And so first thing to check is net income margin. Which is what you see here. And so net income margin again is like profit margin for any business. It's the difference between revenues and expenses divided by revenues. In this case, it's always operating revenues. And you see there's a lot of stuff I don't like here, particularly for Muhlenberg. We have a 6% deficit, 5% deficit, 4% deficit, 9% deficit. Those are the last 4 years of performance for Muhlenberg. That's Not ideal, obviously. Ideal would be +1% every single year and then saving that surplus in the endowment. That's sort of the target. So they're way off target here. In fact, well below the 25th percentile on net income margin in 2024. By contrast, Aurora looks pretty— looks really good. A lot of these are quite normal, quite good, although the last couple of years these are low. And I initially was going to talk about this, but what you need to do a lot of times is adjust revenue for some of these schools because they can inflate or deflate their revenues based on what they do with their endowment draws. And this is an example of deflating revenue for Aurora. Their, their endowment draws are actually quite small. And I did the math and this loss is pretty small. It's like $700,000, I think. And their endowment draws are very small. So if they had a normal endowment draw, they they would have had a balanced budget there. So, or they wouldn't really have a deficit at all to speak of. Yeah. So clearly, any, you know, if you do a credit rating from Moody's or Fitch or whatever, they're going to do that adjustment as well. And when they calculate your net income margin, they make that adjustment first. I thought it'd be a bit complex to do that with just like a general audience, but just know that from what I'm seeing right here, Muhlenberg is in— is not healthy, and Aurora is when you make that adjustment. Other thing we look at is how the endowment's growing for both schools, and neither of these look good. Again, this is the percent change in endowment since 2016, and you can see both of them are hovering right up around the 25th percentile in terms of endowment growth. So 33% growth, 37% growth. To a normal, uh, person, that might sound good, but it's actually quite poor. Uh, normal endowment growth is 59%, hence the reason for benchmarking, right? You got to know what's good and what isn't. Uh, so good is around 60% growth, bad is around 30% growth or below. Okay, so neither school growing the endowment very well, um, which is concerning, but Let's see if we can see it here. Notice Mullenberg— or sorry, not Mullenberg. This is Aurora. Notice Aurora just has a very poor performance initially here, and then they sort of catch up over time. Since like 2020, they've been catching up. It's an interesting story that's happened here. It looks like they had some massive draws back here and have since right-sized their draws. Actually, their draws are small now. So what I was just talking about a minute ago, And then, for Muhlenberg, I think the story is just big draws throughout, right? And there's, they're just falling behind. Notice they were, they were actually on target late 2010s here, but since then I've sort of fallen off relative to the median school. But let's take a look at why that's happening. One of the biggest reasons usually is appropriations. And this is the, yeah, these are massive appropriations from Aurora. Early on, which made their endowments sort of shrink relative to the peer set. But since then, their draws have been quite small. These are 3% draws. Yeah, 3.5% draws. Those are really small. And like I said, if they had had like a normal draw, 4.5% or so, they wouldn't have a net income loss in 2024. It'd be about zero. I think it would cancel out. Not quite exactly, but very close. On the other hand, we've got Muhlenberg with bigger than normal draws. 4.5% is not terrible, but if you do this several times in a row, right, you start pulling your endowment value down relative to the peer set. So there's a 5% draw and a 5.35% draw, which again, a normal draw is about 4.5%.

Yeah.

And during COVID the draws were tiny, right? They got all this government funding. So yeah, they were way above in 2022. So all that's pulling the endowment down.

The—

these draws are too big. They need to be reduced to about 4.5%. So just another indicator that Muhlenberg is having financial issues. It's one stressor that we look at all the time. Yeah, another one we'll look at is net asset changes. So we'll take a look at first total net assets. And I think we have the same story here, right? Muhlenberg is in blue, 25% net asset growth. Not great. Really close again to the 25th percentile. On the other hand, Aurora is doing great. Net asset growth is above the median, almost 60% net asset growth. Look at unrestricted net assets. I think you could see the story here. One school is doing well financially, the other one not so much. And the one school doing well is Aurora. Again, unrestricted net assets up 61%. Muhlenberg up only 9%. Again, that's not good. It's not even keeping pace, not even close to keeping pace with inflation over this period. Okay, other operating revenues. And here's where things become very stark, I think.

Yep, every week.

Yeah, revenue. Operating revenues, again, percent change. Notice same story, great for Aurora, up 32% operating revenue. That's excellent. On the other hand, operating revenues in nominal terms, just dollar values, not real, the real is going to be much, much worse. Muhlenberg is down 4% on operating revenue since 2016. Again, That is not normal. Higher ed, of course, is not the healthiest of sectors, but the median school is up 17% since 2016. So doing far worse even than the median. So operating revenue, another— so clear, lots of evidence here of Neil Lindbergh struggling. I have more. CapEx to depreciation. Again, we want CapEx to depreciation to be above 1 on average. Ideally, it'd be above 1 every year. Just replace all the equipment that wears out every year and then some, right? And that's what Aurora is doing. All but 1 year is above 1. And you can notice the Muhlenberg is very different. They're always below 1, right? Which means their capital stock, property, plant, and equipment must be decreasing. All right. And it is. The value of their property, plant, and equipment is down 6% since 2016. Not normal. Again, normal would be to be up about 6% All of— so we've got like 7 indicators now that Muhlenberg has trouble. Yeah, we've got deficits for several years in a row. We have big endowment draws, which even make the deficits even bigger than I'm showing. We have net asset growth that's sluggish. We have the endowment growth that's sluggish. We have operating revenues that are declining. We have CapEx depreciation that is not ideal. The value of their property and equipment is decreasing instead of increasing like the vast majority of higher ed. So all of this is to say, Muhlenberg needs to make some adjustments. Aurora looks fine financially, but I will go into the next phase on both schools looking at policy, flagging any kinds of things that look odd that might lead to policy changes at either school. So we're going to start on the revenue side. Start with net tuition revenue. Net tuition revenue and look at the change there. And again, Aurora being great. Net tuition revenue for Aurora is up above, you know, they're in the top 25% of all schools.

And Matt, for the new viewers, what's the red line?

Red line is closed schools. Yeah, so as if they didn't— I didn't say this is clear enough already. Muhlenberg has problems, right? Their, their net tuition revenues decreased about the same amount as a set of 9 schools that closed from the period of— that closed in '23, I think, or '23, '24.

Yeah. Yeah.

Um, so they're down 31% on net tuition revenues since 2016. Not, not ideal, and again, not normal. Um, very interesting.

Show the per student— show the per student on that. We see a lot of trends.

Yeah, but let me say something first. I actually— this this is the first time I'm seeing this because I update this data all the time and I have almost all of 2024 now. And look at that, the median school's net tuition revenue is up 1.5%. Not in real terms, right? Like, this is, yeah, clearly down in real terms, but it's up. And Muhlenberg is down 31%. You want to see per student?

Per student. Yeah. See what?

Yeah. So this is one of the first policy suggestions I have. Perhaps notice how Muhlenberg's price is very high, right, relative to the median school. They may, they may need to look at this. There's a decent possibility that the price is just too high, right? And the way to see that is to put in some of their peer schools around them. I don't know any offhand. Actually, I do know some offhand, but I don't want to put them in right now. But they need to do a deep dive on their net price, right? Take a look at their net price versus competitors. $22,000 per student just for tuition on average is pretty high. It could indicate that the price is too high, right? Which could be explaining a lot of things they're seeing with their enrollment and, and so on.

And that price has gone down since 2016.

Yeah, it's gone down. But, uh, yeah, keep in mind that they are a high-cost school. Things are getting tighter, especially in Pennsylvania. More competition, it's going to be very, very crucial that you have your price at market rate, right? If it's above market rate, you get reduced, you get small classes, right? If it's above market rate or sorry, if it's above market rate, you get small classes. Below market rate, you're just leaving money on the table. Both of those are bad. And maybe Aurora is doing some of that. Their price is quite low, right? Although they're bringing it up slowly every year. I wonder if they can charge more. And you notice their enrollments going way up. Like, yeah, you just wonder if maybe they are focused on growing enrollments and keeping price low, which is fine strategy, but it may actually be— and we saw this with Lehigh last week— it's probably a much more efficient strategy in terms of scaling is just to bring your price higher, right? If the demand is going up. Bring your price up, keep the classes the same size. That's what most elite schools do, actually. Um, all right, so some things to look at here for pricing. And of course, I know this is really high level, but if I were Muhlenberg, I'd look— take a very deep dive on this net price. Although it's decreasing, it's probably— there's a good chance it's too high relative to the peer competitors around them. Really easy analysis and, and quite useful, which we do with our clients. Submit Smith students over the last 5 years, all the students that applied and were admitted to Muhlenberg but didn't show up in the fall. Where did those students go? Figure that out. And then out of that set of schools that those kids went to, look at schools that are similar to you. So kids that you admitted but didn't go to Muhlenberg but did go to a private small liberal arts type school, figure out why they didn't choose your school and they chose these other schools that are quite similar to you. It's a really simple analysis. And very, very useful to identify if the price is off. All right, that's my advice there. Happy to help them do that if they want to do that. Okay, on the expense side, that's the revenue side strategy. And if you do a Strategic Compass engagement with me, we do a ton of diving into the different parts of the funnel. There can be silly things like not targeting transfers anymore, making it too hard to transfer, making it too hard to apply. There's a lot of weird things that can happen in the funnel that can mess up enrollment. So They need to do all of that. All right. And again, I can help you with that. Let's move into the expense side. Let's do employees, because there's a lot they can do here. And as you probably already know, just basically seen our shows, we're going to see a lot of Muhlenberg showing up in these. So if you're at Muhlenberg, pay attention here. Write these down. These— all these things are worth checking. All right. So starting off first with the staff. Staff count is incredibly high for how big the school is. That's above the 75th percentile.

Okay.

It's also very, very high for how much revenue you have. So either way you look at it, revenue or enrollment size, staff size does not look right. Quite high. By contrast, look at Aurora. Super low. Actually normal for the revenue, but low for FTE. I don't see any problem there. You wonder if maybe things aren't getting done. W-2 employees paid over $100K. I think the result was similar. Yeah, really high again for Muhlenberg and high for both for revenue, but for FTE, Muhlenberg for sure. So clearly Muhlenberg has staffing issues potentially. I mean, I'd be shocked if they didn't. It's pretty hard to argue this and there's lots more evidence coming for you right here. Total compensation for non-officers. All right, they're spending $41 million on payroll. That's incredibly high for a school of their size. All right, and for a school with their revenue, both above the 75th percentile. Yeah, serious staffing issues potentially, both probably with numbers. All right, here's another one. They're These are other benefits. So this is not retirement benefits. This is other stuff. This is like health, life, dental, vision, any other kind of benefits that you're contributing to your employees. Look at how far off the scale they are here, Gary, for revenue. There's a possibility that the reporting is off, which is also a big problem. You said you're sending this to the IRS, so make sure you get this right. You're not supposed to include retirement contributions in here. This is just other types of benefits other than retirement. Uh, so I would— this is definitely worth a deep dive, at least to get the reporting to be correct if that turns out to be the case. But I suspect their benefits for probably health insurance is probably the big one that is just not in line with the norms in higher ed. Uh, take a deep dive look at that, get other bids on, on that, save millions. Another piece of evidence here that staffing's wrong, uh, payroll cost, payroll taxes, right? The government's taxing them based on what they're spending month payroll. And it's just again way off, way off. We're in the 75th percentile for size and look at that, you know, close to the 75th percentile for, for revenue income. So tons of evidence there that Muhlenberg needs to check staffing and do a deep dive on staffing and right-size that. That would be the first item of business. Let me go through the other before I go into contractors, which I know is another huge pain point. I'll go through some of the other big expense items and just double-check. This is literally what I do for clients. These look fine for the size. This is advertising spend, looks fine for both, actually a bit low. So maybe, you know, maybe bring that up. Here is IT spend, low for size on both, a bit high on— this is Aurora. So Aurora could look at their IT spend. That is a bit high for how much income they have. Maybe worth looking into insurance for FTE, low and normal, about normal on both. All right. Occupancy. Here's one for Aurora. Oh, this is Muhlenberg. Okay. Another huge point here. This is almost $10 million in occupancy. Remember, Gary, is utilities, utilities, utilities, rent mostly. So let's look into it. This is not normal. Are they renting facilities? Why are they doing that? Shrunk quite a bit. And or is it utility costs? Like what's going on with that? Can they become more efficient? These are all interesting questions to ask and have potentially— or they're just a reporting error. And again, even, even that is useful. You got to make sure you're reporting to the IRS correctly. All right, office expenses. Okay, here's one for Aurora. Office expenses. This is like printing, shipping costs, mostly, right? Those are the big items there, I think. Paper, other stuff.

I wonder if they're online heavy and they ship textbooks or something.

Yeah, it could be.

Yeah.

So these are the kinds of things like, again, I can't see exactly what the problem is or what, why this is high. Potentially a problem could be some other explanation, but it's worth your time. This is what you should be spending your time on. Go through these and figure out why that is the case. and you might find policy options that you had no idea were there prior to doing that analysis. Very interesting here. Fundraising, fundraising expenses at Muhlenberg are off the charts for their revenue and off the charts for their size. That is, that's a lot. All right. They're spending $4 million just on fundraising. Yeah, it's not normal for their size and for their revenue. They're way off here. This is probably top 10% in the country. Again, you want to compare that against gift revenue?

Yep.

And let's take a look at their gifts. All right. Gift revenue is normal.

Okay.

So not ideal combo, actually a bit low. Okay. So Muhlenberg is spending in the top 10% on fundraising and their actual unrestricted gift revenue is not nothing to be bragging about. It's actually a bit low. So you just wonder about ROI there. Ideally, what they would do is take a look at some of the changes they've had in spending and see if that's affected at all this, this movement. This looks really smooth to me. So, and not very abrupt changes happen here at all. Perhaps there's like zero link between the spending and the actual gifts they get, which would mean probably cutting back on the fundraising expenses. Again, I said a lot there, but there's a lot of research to do in the background. But that's been my—

and we've seen that, but we've seen that many times when the fundraising expenses don't match what's the actual increase in fundraising revenue and guest revenue is.

Yeah, I mean, similar to advertising expenses, right?

There's—

you don't do it just to do it, right? Like, there's no point in spending on advertising if it's not giving you more revenue, right? It has to give you more revenue than you spend on it. Same with fundraising expenses. Yeah, you're still going to get some gifts, right? Even if you do nothing. On fundraising. I would imagine if you send out an email, you'll get some level of gifts, right? Um, so yeah, I think schools can go overboard on the advancement part. And, you know, you got to try to compare it to the counterfactuals. If you did something else, you did less, if you did nothing, what would you get? And then figure out what the ROI is for different settings. Um, okay, okay, conferences, travel. Okay, some of the other big ones— travel, Looks fine. All right, travel looks good for both. Fees for services. This is your vendor spend in Aurora. Remember Aurora had a really small staff size, right? Now they have massive fees for services. So this is one of those schools kind of like Lehigh we had last week where they had low staff, high vendors. Looks to be similar with Aurora. Again, I'm not sure. It may be working, working for them. They have balanced budget and everything, but yeah, they could also look into a model that's more staff, less vendors, right? There's some optimal combination in there that's most cost effective. And again, ideally they would figure out where that is and maybe they are there right now. I'm not sure. One more thing, getting into the vendor spends and you can see one that's going to be a big problem for Muhlenberg right now. This is their food service contracts. And it's incredible. Like, for the size of their school, they're in the probably top 5%, 10% of all food service contracts.

Let's go there for lunch today.

Yeah. I mean, like, we see this a lot, right, Gary? Like, I mean, I know there's stuff in here, like sometimes they're replacing the kitchen and all that, but do you really need to do that? Like, you're struggling financially again. That's like a nice to have rather than a need to have. So that's why it's important to get the context right. I mean, if you're Harvard, yeah, you can have filet mignon every day, but if you're, you're going broke, it's not ideal. Okay, so again, really, really high for the revenue and size, and I'm about to flag that down here as well. Okay, so here is a deep dive on the contractors for Muhlenberg. All right, so there's lots to look at here. Again, this is just flagging the— checking the top 5 contracts they report on the 990s, and I attached color to the ones that look expensive for their revenue or for their FTE enrollments. And it's all sort of normed relative to that particular year and that type of contract.

And the darker your color—

$100 per student on dining is incredibly high. All right, we have a lot of schools actually in normal food service contracts like $1,500, $1,600 per student. So something's odd here and it has been for a long time. All right, we're at— it's never been— I guess it was $1,800 back in 2021. You see, this is the thing. It was $1,800 in 2021 when their enrollment was way higher. All right, so they have to be doing something weird with this contract, like renovating the kitchen and stuff like that. Again, probably not the best thing to do when your enrollment's shrinking. I don't know if they hope that like that would help, but it usually doesn't and probably isn't the case. So yeah, this is not ideal and they probably locked into a long-term rate with a long-term contract with this vendor. Now it's part of the way that they lock you in by, hey, we'll invest in your dining facilities if you stay with us for 10 years. So Yeah, this is unfortunate. But if they can get out of this, they should try as soon as possible. Here's another one. Or just negotiate it down. That's, I mean, you should be closer to like $2,000. Even this was high in 2022. $1,800. Yeah. Okay. Food service is an issue. This contract is also really interesting. This is a $2.1 million contract for consulting. And data work. And I was like, what? I don't know this. I thought maybe it was like a competitor of mine. No, it's not. I checked it out. This Lamtech Group, this is just like facilities, athletics facilities kind of provider. So this looks concerning that this can't be consulting, right? I hope this is a new football field or something. Yeah. But if it's not, I mean, that's a ton to spend on consulting. As you can see with the color here, it's like over a standard deviation or about, yeah, half standard deviation high for consulting contracts.

Those are—

that's really out of the norm. That's it on Muhlenberg. Let's go to Aurora. And yeah, the only contract I'm flagging for Aurora is this maintenance contract, which is interesting. Again, $5 million for maintenance. It's very high for how many students they have and for their revenue. So this, this may be an easy one for them. Just go out and get some other bids or take a look at what this vendor is doing and maybe they can do less of it. Yeah, it's really concerning too because they have really high CapEx for how for how much depreciation they have. So their facilities should be in decent shape unless that's been getting sort of absorbed into this. That's possible as well. Maybe they, they are fixing all this stuff and that's what they're doing. But again, all I'm saying is I'm not saying that this place is run poorly or anything like that. I'm just saying this is— this might be an area you assign a staff member to go out and check out what this contract's all about. What are the alternatives? And you might find that you can save a million or two on maintenance. But I don't know. You don't know until you do it, right? So yeah, go do it.

All right.

That's all I have here for this one, Gary. I'll send it back to you.

So you and I do 2, sometimes 3 colleges a week. And as I watch the presentation on both Aurora and Muhlenberg today, is it fair to say that Aurora is a success story?

Yeah, I think they're doing really well. I'd be happy if, if I were in that administration or if I were like a faculty member there. They're growing. They seem to be keeping costs in line. They have balanced budgets. It looks like they fixed maybe some bigger than normal draws on the endowment not too long ago. So they appear to be in good shape. And really, it's like a lot of the opposite on every graph I showed for Muhlenberg.

Yeah, yeah, we're gonna do something different on my part of the show today, Matt. We're going to take a look at a new product I know you're aware of, and the advanced compass that you showed for both Aurora and Muhlenberg really focuses— it's a product for CFOs, for college leaders, for board members, uh, for media. We share this with the media members. It's a high-level look. It looks at a lot of detail, and you and I both know that there's another market for the financial health of colleges, and that's students and families. And that's the focus of the My College Viability site that we have, that I have up right now. And it focuses not just on students, it focuses also with data for college counselors, dedicated for college counselors, for college faculty and staff, a little bit easier to read, easier to understand, as you'll see in a second. And just this past week, we've added a report for college alumni. So here's kind of what it looks like. I'm going to go ahead and look at the dashboard. And it's customized for a set of colleges. I've preset the two colleges we did today, and I've added the national median. This is all customizable when you purchase this app. And I'm going to take a look at a couple of areas. I want to look at student financial outcomes, just to show the functionality map behind this. And the way this works is for our two colleges, we provide some tips, some guidance on how to interpret this data. It's not just data, figure it out for yourself. We provide some text-based guidance, and we've created a cute little owl. We call it Viability Val, a little alliteration never hurt anybody, Matt, I guess. And, you know, it's just an overall review of Muhlenberg in terms of ROI, and same thing for Aurora. And you can read that on your own, pause the video as appropriate. And then we can look at graduated student debt. Again, we can see that comparison. For each of the three. And it's $21,000 Aurora, $26,000 McSense, at Muhlenberg the national median is about $25,000. And we can look at graduated student debt as a percentile. In this case, the higher means more debt. So Matt, again, it makes sense based on what you showed today. Muhlenberg has the higher prices, and they are— their price, their debt, their student debt is in the top— it's the 60th percentile. So that means 60% of colleges have less debt. 40% of colleges have more. And then let's take a look also at the long-term financials for these two colleges. Again, we provide some guidance. You can set your— select your own set of colleges from some 1,300, I think, private colleges throughout the country. Again, VAL provides some guidance on long-term financial health. Looks like Muhlenberg, they're going to say a solid long-term financial health, and Aurora is moderate long-term financial health. And this is probably a reflection of the assets at Muhlenberg College, because as Matt shared during his part of the show, they have some serious cash issues, some serious revenue issues, and some serious expense issues. And again, Aurora, we saw, was doing just fine. This— that's a tool that you can use. You can see there are other— I'll go home here. You can see all the tools that are available. In addition, we've set this up so you can search by indicator. So this is a new development. So Matt kind of did that with his report. And if we want to look, for example, Matt spent a couple minutes on the endowment percent change, we can actually go to that indicator and look at the endowment change for our two colleges. Very similar to what Matt just showed. And we can see Muhlenberg, their total endowment is high at $330 million, and we can see the pattern over the last 5 reported years. Let me turn Muhlenberg off, and we can see that Aurora, the national median is about $40,000, not quite, and Muhlenberg's a little bit higher than that. So, the reason I share this information is the tool. Matt, you and I both know that there are going to be many, many college closures. There have been and there will continue to be. But more importantly, there are even more college cutbacks and layoffs. And all summer long, I did on my podcast, we did a little bit on this show and other media that I do, that the cutbacks and layoffs are almost, Matt, I'm going to say this, almost worse than the closure. Because with those cutbacks and layoffs, you may start at a college as a journalism major, and if there aren't very many journalism majors, that's a major that a college may say, hey, we can't afford that. And that's why I brought up the 2025 College Majors Completion App. And there are two things we're gonna look at. The first is the internal market share, and I've got it for both Muhlenberg and for Aurora. We're gonna look at bachelor's degrees from 2020 through 2023, the last reported data. Keep in mind that MATC's data is some of the— probably nothing more recent than what MAT provides, but I use IPEDS data, which is always a year, MAT, to us, as much as 2 years behind, but it gives us a trend. So it doesn't really matter that much. Things don't really change significantly from year to year. And we can look at the majors where Muhlenberg does well. All right, 70 in Drama and Theater Arts, 77 in business majors, and we can see the internal market share. So of all of the 64 majors that we track here, 16% and change in 2020 were in Drama and Theater Arts. We kind of watch that trend to make sure it's not over 30%, and no, that's not the case for any of Muhlenberg's issues. But we also look at the low enrollment, and again, if you're looking at, at Muhlenberg for Physics, Religion, Fine Studio Arts, Music, these are all low enrollment numbers, not just for one year, Matt, but really over the course of the last 4 years. And when you're a student and family looking at these colleges, Look at the major's completion rate. This app costs, I think, $29 or $39. Look at those majors and see if that major might be at risk. And when you're doing that tour, when you're talking to reps for colleges like Muhlenberg, like Aurora, ask, "What's gonna happen to your chemistry program when you've only had an average of 3 or 4 majors graduate from that program over the last 4 years?" You don't wanna choose a college and have them cut that major. And the same thing applies for Aurora. Lower enrollment majors, majors where they're doing just fine. Then the other thing we take a look at is by region. So let's go to Pennsylvania, because Matt, you and I know there are way too many colleges in Pennsylvania. I think there are 94 privates. Let's take a look at that. We're going to go to Pennsylvania, and we're going to look at just the private colleges. So you can choose the sectors here, and We're going to look at bachelor's degrees. Let's just pick a major, pick the one on top, accounting. All right, so this is external market share. These are all the private colleges in Pennsylvania. These are the number of graduates in accounting and accounting-related services in 2023, is the year we got selected. And you can see the market share. We can roll over this graph. You can see Drexel has a good percentage, Villanova a decent percentage. We can make it bigger. So you can see what that looks like. But you've heard me say this many times before, Matt. This is a market that is so chunked up, you have to wonder how— why some of these colleges even participate with such low market share numbers. Now I understand a tuition dollar is a tuition dollar, and whether it's accounting or fine arts or math or economics, there's, there's revenue generated from that, Matt. But don't you think the folks at Drexel with 18% of the market and 200+ students have a better program than the folks at Theo College with 7 majors in accounting. And we can look at all sorts of other majors. I'll just scroll down and pick one. How about marketing? So we choose marketing. And again, you know, a lot of colleges have marketing. We can see the colleges listed over here in their color, but we can see the ones that are dominant: Deakin, Duquesne, St. Joseph's, uh, Drexel University. And these small market players, not just the fact that they're generating tuition revenue But how can the quality of a small program, Dr. Hendricks, compare with the quality of a large program in whatever major that you choose? It's just not logical. And you heard me say before, Dr. Hendricks, that, you know, if we have to choose a brain surgeon, we prefer one that does a brain surgery once a day as opposed to a brain surgeon that does it once a month or once a year. And the same kind of logic applies to college majors. You want to really make sure that's one of the items that you check to make sure your major is not at risk of being closed in spite of the fact that the admissions reps are going to say, no, we're not going to close that major. They just, they don't know that. And we've seen year, year, week after week, almost day after day this past summer, majors, programs being closed across the country for both publics and privates. There's no exception to that. And, and Matt, as you said in your part of the show, And I will add, and this has almost become our standard conclusion, it's, it's the comparisons that matter. And Matt, you've said before, if you're looking at your data and it's wrong, then you're making important decisions based on wrong data. Is why that, that's the Advanced Compass that Matt used today, and the Strategic Compass that's dedicated for your college, are tools that are ridiculously affordable. And if you want a private demo of these tools, drop me a note. I'll leave the contact information in the show notes. and we'll set up private demos for both of those products, and you can decide if it's something for you. And I'm telling you, if you're Muhlenberg University and you're not using this tool, I'm going to make the case that that fiduciary responsibility you have may be something that could be better served by looking at these kind of comparisons. Matt, I'll let you wrap things up before I close out.

Yeah, I mean, it's just like there's a million things to look at as a university administrator, right? Like, where do you start if you don't have a data source like this, you'll just waste a ton of time looking at things that are normal, right? Like, I see it many times, like schools, oh, we have financial problems. First thing they want to do is start cutting academic programs. And at the same time, they have an $8 million food service contract that's just way out of left field, right? Like, what I'm advocating for is just being smarter about making these decisions. Don't assume anything. right? Don't assume anything and check it, right? And you save a ton of time. You could save a huge fiasco for university if you find out, oh, we can do all these cuts in advancement, not affect our revenue at all, right? And, and balance our budget, right? Wouldn't that be great? And, and not have to cut half your majors or whatever you're planning on doing, right? So that's what I'm advocating for, just being smarter about this. And in process be more transparent so you can get difficult things passed through, right? Just because you're the president or board chair doesn't mean that you can do anything you want, right? I've been at a school where that didn't go very well. I can tell you firsthand, you have to sell it to everybody. You have to sell it to the faculty. You have to sell it to the students. You have to sell it to your alumni. You have to sell it to the community. Or you can't get it done. You won't get it done. Right?

Yeah. Yeah.

And so there's no better way. There's really no other way to do it than other than just showing the data and saying, hey, look, this is where we are. This is where we need to be. All right.

And then there's— I'll wrap things up. There's really 2 ways, 2 types of colleges. Look at this. Muhlenberg is an example of a college that I hope reaches out soon and takes a look at the demo because there are ways we can show them off the top to save the fee. That we charge for the apps right after that. And there are many hundreds of colleges, Matt. We've done almost 140 colleges now in our shows, and a preponderance of those— not all, but preponderance of those— need this kind of tool. But the other end of the market is for the Auroras of the world and the Williams Colleges and, and the ones that are doing well out there. This tool that Matt showed you in particular on the, on the Advanced Compass is a tool you can use to identify colleges you might be able to approach to grow with, to look at a merger, maybe even to look at an acquisition, although that's not likely. So it's really both ends of those markets. And then Matt will wrap— finally really wrap things up. Remember, for those watching the show, there are now products that make this financial health easier for students and families and college counselors and your faculty and alumni to look at. They're going to know whether you're doing well or not. And you're welcome to choose whatever method that you want, but the data and the comparisons that Matt Hendricks has put together on his Advanced and Strategic Compasses are tools to use rather sooner than later. So Matt, always a pleasure doing the show with you. For Matt Hendricks, I'm Gary Stocker. Thanks for making time to watch the College Financial Health Show. We'll be back, we'll be back next Tuesday with two more colleges. We'll talk then.