Baldwin Wallace University (OH) and Elizabethtown College (PA) Financial Health & Viability Review

It is time for the weekly College Financial Health Show with Matt Hendricks and Gary Stocker. Hi everybody, thanks for watching the show, whether you're watching live on Tuesday mornings or watching the enhanced and improved edited version that we put on the College Viability YouTube channel every Tuesday afternoon. And to date, this is the only show that looks at the financial health and viability of private colleges throughout the country. And Dr. Hendricks, we're approaching having reviewed about 160 private colleges so far. We started this in August of 2024. What are the two colleges, Matt, we're looking at today?

Yeah, today we have Baldwin-Wallace in Ohio and Elizabethtown College in Pennsylvania. Financial Compass, um, and this is a frontend for a big database of all the audited financial statements for colleges and universities and scraped so that it can all be analyzed and harmonized. And it's also got 990 data in it. So check it out if you haven't had a chance to check this out. This is going to save you a ton of time and get you up to speed really fast with what is normal and what your school looks like. You can do all sorts of custom benchmarking as well. But I'm going to pull up both of these, Baldwin-Wallace, and get right into the number one thing to check. If you're new to this, you want to check net assets, um, and unrestricted net assets in particular. Elizabethtown. All right, Elizabethtown College. All right, we got them. All right, so the blue college, the blue line is always going to be, uh, the top school, Baldwin-Wallace, and the green will be Elizabethtown. I'm going to start with net assets, total net assets to begin with. And so there's a couple things to look. So you can always check raw values per FTE, percent change, and per $1 million revenue. That's not really relevant in this case. But first thing I like to check is how big are these schools in terms of the value of the campus. Essentially, that's what net assets is telling you. It's probably our best metric for what the whole campus is worth. And you can see the Baldwin-Wallace top school is in blue here. They have $300 million in net assets. It's like their net worth. And Elizabethtown is at $154 million. Both of these are quite large relative to other private colleges. The median is $118 million. So quite large schools that have a lot of net assets, which is good, which means basically that these schools can be run pretty inefficiently and still survive for a very long time. With $300 million in net assets, that gives you a very long runway. And same for $150 million, really. $150 million buys you a lot of time to run deficits. But of course, you don't want to run deficits, and you can see it clear as day in these numbers when you start looking at what normal growth in net assets looks like. Versus what it looks like at both of these schools. So I'm going to switch into that percentage change. All right, and so this is the concerning part for both of these schools that wouldn't be obvious unless you did this kind of benchmarking. Both schools are sort of lagging, uh, not sort of, they are lagging in net asset growth. Baldwin-Wallace net asset growth is up 5% since 2016, which is very, very low, um, essentially flat. And, um, Elizabethtown looks better at 26% growth than net assets, but still far lower than what is normal. A normal growth rate over this period is 47%. All right. Just to keep that in context. So we're looking at like half and, you know, terrible growth rate, really. So why is this concerning? Why do I bring this up? This is a big problem because this is nominal, for one. So this means the real value of these colleges is falling. Right. I'm certain inflation was higher than 25% over these years. So both of these schools are shrinking in terms of net assets, which in real terms, which is a very bad way to manage your university. Eventually, I mean, it may take a very long time for these schools, but that if that continues indefinitely, I mean, that's a good fact, a good way to think about it, right? Can we continue this way indefinitely forever? No, neither school will survive if they continue to operate the way that they are. So really simple. Just run it out 100 years and see if this school is going to survive. And they won't. Eventually this will go to zero, right?

Yeah.

And, um, or at least very close to zero, probably converges to zero, right? Um, but at any rate, they're falling behind their peer institutions, uh, probably, right, which are probably growing close to 47% on net assets. So there's a couple of other things to keep in mind. Net assets overall includes a lot of stuff that the school can't use to operate. And so it's really important that you check unrestricted net assets, which includes all of the assets that they can actually use that are not donor restricted, right? So the total net assets will include restricted assets and unrestricted. The restricted net assets are problematic in that you can't normally use them unless you're in a dire, dire situation where the Attorney General is going to let you use them, or you go to the donors and they're allowing you to use them. Generally can't use them. So you want to focus mostly on this unrestricted net assets. There's also laws restricting how much of the restricted assets you can use. And still the same story here. In fact, even worse, actually, no, about the same, right? So both of their unrestricted net assets is growing very, very slowly. And that's despite a huge jump here for Baldwin. Yeah, for Baldwin. So, yeah, this is— if you want to start somewhere, if you don't know much about college university finances, just start here. Really, really easy. Everybody can understand that a declining trend is not good. And if you're declining in real terms, as both of these are, it's very bad. If you're declining nominally, even much worse. And those schools have already closed. That's this red line here. Um, so, but again, take into account also the raw values. There's no need to panic. Both these schools have over $50 million in unrestricted net assets. But as we've seen many times, right, Gary, that can go very fast if you're running big deficits. Um, you can see, just, just to give you context, in 2021 Baldwin-Wallace had $122 million in unrestricted net assets. Now they're at 73. So they've eaten like half of it in 4 years. So this can happen very fast if it's not, you know, if you don't get a handle on it quickly. All right. So why are they declining? It almost certainly means that they have deficits. So I usually next go to net income margin, but you can see a problem right here right away. This is a super volatile number, which usually means that they're not doing the statement of activities, separating out operating versus non-operating typically. And then even if I take Baldwin, you can see sort of the same pattern with— what's this one again? Elizabethtown, super volatile. And I double-check this. You can see this on your audits. This is— I'll make this bigger. This is the statement of activities from Elizabethtown. It just has revenues, expenses, and net assets. Usually there's operating revenue, expenses, change in net assets from operations, and then other stuff down here. So this, this is not very helpful actually the way that this is set up right now because it doesn't tell you how they're operating really. And it's the same thing at Baldwin Wallace, of course, usually saying, yeah, we got a handle on this, everything's going to be fine. But a lot of times that's totally not true.

Yeah, right.

So same thing here. We have expenses, we don't have it separated. We should have change in net assets from operating activities. And we don't— and then like an other section. We don't have that here. In fact, this presentation is really bizarre. So what you need to do is just recognize that, make sure that you have operating revenues versus expenses to get a sense of how this place is operating, what the budget looks like. When you don't have that, the next best thing is to move into cash flow. So net cash from operating— every school reports net cash from operating activities. And this is where you're going to get a good sense of how these schools are operating. And you can see right away, not good, right? You should never have net cash from operating activities be negative unless, right, there is a weird thing that happens. Like about half of schools, you have a really big endowment. Sometimes those schools will put their endowment draws in a different section. Some keep it in the operating activities section, some put it in the investing activities section. It's really important to understand which case you have because you can end up with a negative number in operating activities just because you're not including any of your endowment draw in there, which is— you got to be aware of that because you can draw a very incorrect conclusion about your financial health, seemingly suggesting the school is like about to close when it's not.

Right.

So be really careful. I'm pretty confident that both of these are bad situations because, look, they used to have net cash from operating activities that was positive, right? This is about— yeah, right here. Both of them normal in the late 2010s. But since then, complete disaster at Baldwin-Wallace and a disaster, not nearly as bad, but disaster at Elizabethtown. So what these— what this means is these schools are losing money from their operations. So in order, generally— and I, I'd have to double-check again that their endowment draws are not in here, but I'm pretty confident. Like I said, this used to be positive unless they switched their accounting methodology, which which is totally possible. But assuming this says that they're negative net cash from operating activities, including the endowment draw in there, this means that in order to pay payroll and everything else in the budget, they're having to either borrow or sell assets or draw down their cash reserves to do it. None of those things are sustainable. So both of these schools, not sustainable at the moment, but again, super long runways at both of them. But you can see— yeah, you can see why— how— remember I said they ate up like $70 million of their assets? So this must be right, man. They're eating up— they're eating up their net assets at a very fast clip here. -$24 million from operations.

Right.

That generally means you're going to have to borrow $24 million just to keep the place running. Right. Or draw down your cash reserve. Anyway you look at it, you're going to draw down your net assets, probably about $24 million. Um, and same thing, even more than that actually, because this doesn't even include depreciation. So you can see how they ate up those net assets so fast at Baldwin-Wallace. All right, um, so both of them in serious trouble though with this budgeting that's happening. And, and the thing about it, it's not like, oh, one year. This is how many years now at both of these schools? Since 2019. So you're looking at 1, 2, 3, 4, 5, 6 6 years. That's plenty of time for a board to get a handle on this and say, hey, no, we're going to pass a balanced budget now, not this budget that's going to end up with this result, right? Same with that.

And you're going to show us the operating revenue and operating expenses, right?

I can't really, because remember, it's non-operating. Oh, okay. So the expenses. But remember, the operating revenue includes like stock market returns, all sorts of other stuff. But let's take a look at expenses because that will be legit. Um, let's go values. What am I looking at here? Uh, I got a negative value for operating expenses.

Yeah, they did something wrong.

Yeah, remember, this could be, um, that's really bizarre. I've never seen that before. Um, I'll have to double-check what's happening there, but, um, yeah, unfortunately this page for Baldwin-Wallace at least is not going to work. But here's the page for Elizabethtown, and you can see their expenses are growing about normally, which is unfortunate because they're probably not doing so hot on revenue. And I can show you a little bit of that. Let's go. Net tuition revenue. Net tuition revenue. Okay, so both of these schools suffering on net tuition revenue, which is probably their biggest operating revenue, usually is. They're down both 12%. Since 2016, 12, 13%. Okay, so I think if I remember right from my prep, they have very different ways about going to get to this -12.5% of net tuition revenue. And you can see Elizabethtown.

Goodness.

This is their per student net tuition revenue. So you can think of this, the easiest way to think of this is it's a decent proxy for price. Okay, the price of the college used to be about $22,000 for tuition and fees per student. Now it's like $16,000. All right. And on top of that, you had a bunch of inflation. So this school has gone like halved in price about in real terms. At the same time, Baldwin-Wallace, their price is pretty steady still, about $16,000, which is what they were. But in real terms, both prices are lower. So what I think we have here is we have one school's net tuition revenue falling primarily because the price is like halved almost. The other is flat, but they must have an enrollment issue. So let's take a look at students. All right. And yes, so blue. Very interesting. So the school— so this school is up 21% on enrollment. But net tuition revenue is down 12%.

They are giving away the store, Dr. Hendricks.

Yeah, the discount is just completely off the radar. So they discounted the place a ton. Yeah, they got more students. But in the end of the day, it's less revenue for the school. So it's more kids, less revenue, which is actually really bad both ways, right? You got more kids needing instruction and services and so on and less money per student to do it. Which is not ideal. The, the case with Baldwin Wallace is purely a loss in students. They're down almost 15% on enrollment. All right, so really, so we've seen this several times. Enrollment doesn't tell you everything that you need to know about revenues and financial health. This is a school that's growing faster than most schools in the country, probably top 10%. But struggling mightily financially because they're not bringing in the revenue per student that they used to. Interesting. All right. So I guess I have some advice here. Obviously, if you're at Elizabethtown, go back and look at your formula, your aid formulas back in 2016, and try to bring back some of the institutional knowledge that was around back then and try to get that price back up to what it was back then. At least understand why this is happening.

Let me jump in here. Talk about how the Strategic Compass could help Elizabethtown.

Yeah, Elizabethtown. So one of the, the key analyses we do on with the Strategic Compass is check out what their price is relative to other similar peer competitors, right? I call them peer competitors. So schools, and you can see that we submit data to the National Student Clearinghouse, get a sense of where students— so the students that they admitted to Elizabethtown, for example, that didn't show up in the fall, where did they go? We can see where they went. Chances are they went to a school. Some of them went to schools that were very, very similar to Elizabethtown. And then we just ask the question, why did they go there over Elizabethtown? And then try to figure that out. Some of it sometimes has to do with price. I doubt that's the case here. In fact, they're actually getting a lot of students If you're a competitor with Elizabethtown and you're wondering where all your students went, they probably went to Elizabethtown because their price is so low. So there's— you got to keep your eye on not only your own pricing strategy, but everybody else around you, right? There's a good chance that these schools right around Elizabethtown College in Pennsylvania, if you happen to be one of those schools and your enrollment's down, you probably need to look at your cross apps and see where those kids went. They might have gone here. right? And clearly the reason price is way low now.

And Matt, can, can, can colleges create their own peer groups in the Strategic Compass?

Yeah. So Strategic Compass, I have the KNN set, which is a purely machine learning algorithm that finds peers. And then I have self-reported peers. The school report what they think are their peers. So that's another set. We have the cross-app set I just mentioned. We have a subset of all of those that have strong financials, right? So a lot of times we, you don't want to just benchmark against other schools that are also struggling, right? What we try to do is benchmark financials against other schools that have good financials, right? So that's sort of how we figure out, back out what expenses should look like or could look like in a way that's sustainable. And then we have in-state peers usually out other— there's other crosscuts that we typically do, aspirational groups, that kind of stuff. So yeah, really rigorous benchmarking analysis that allows for all sorts of different cuts, all sorts of robustness checks before. So we basically make sure that we do everything possible to get the best information we can before we make decisions.

And for those watching the show from either Elizabethtown or Baldwin Wallace, reach out. I'll put the contact information in our show notes. And Matt and I will— Matt or I will be happy to set up a private demo to show you what it could do for your college.

Yeah, and this is really interesting. I've actually worked with some schools in Pennsylvania, and I have a— I should go back and look at the cross apps and see if some— if this isn't the case where some of their freshmen went to Elizabethtown for the price, lower price. It's possible. Anyway, a different story altogether at Baldwin Wallace. They're just losing students, right? But again, it could be, uh, you know, lots of stuff can cause that. You know, you put a bunch of weird stuff on your application— kids are really sensitive to that these days. It's incredibly easy to apply to even the best schools in the country right now. If you're not the best school in the country and you're making it difficult to apply, you're probably going to lose students.

Yeah, yeah.

Um, it's not a good idea at the moment. And, um, yeah, I don't care if you view yourself as super, super selective, doesn't matter. You got some of the Ivies not even requiring test scores for a long time. Like, this is, this is the world we're in. Um, so you gotta stay competitive on all of that stuff, not just the price, but also like how easy it is to get in, how easy it is to transfer in, how easy— do you have to write an essay? Um, do I have to fill out, oh, what do they call that, CSS profile? Do I have to pay for that? Like, all these things are really, really important. And generally you want to make it as easy as possible and cheap as possible to apply. Do you have a big— do you have a— do you even have an application fee? Probably shouldn't at this point. Yeah, those are the kinds of things that are really obvious when we do the benchmarking. All right, that's the revenue side. Let's take a look at the cost side. So both these schools probably have cost issues, hence the budgeting problems. I'll go right to the number one culprit almost every time. Is employees. All right, and so these are the raw values, raw employees. So 2,600 W-2 employees at Baldwin Wallace and 1,600 employees at Elizabethtown. These are not fake employees. This is actually submitted to the— I want to be very clear, this is actually submitted to the Social Security Administration to run their— every W-2 employee gets submitted to that to the Social Security Administration. So these are actual numbers. This is completely accurate. Um, so there's no doubt about this, right? This is the number of W-2 employees. It's verified by the Social Security Administration and probably also the IRS at the same time.

And even, even more importantly, Matt, all of the data that you and I use is submitted by the colleges themselves, the financials.

Yeah, sometimes they submit it like the iPads. So if you're going to choose the iPads or this, this is definitely more check. This is more accurate than iPads. Sometimes iPads can get off with the way that employees are being reported or coded, and we, we deal with that all the time. There's still information that can be gathered, and we can fix these things. And almost every client, we're fixing something with the data. But okay, so, so here's the thing. Let's take a look at per student first. All right, so no shock. Almost every school that's running deficits, this is the first thing you should check. How many employees do you have per student? All right, both of these are very high, right? This one is quite almost— so what does this mean in just real, real language? Means for every student you have, you have 3/4 of an employee, right? Or for 10 students, you have 8 employees. All right, that ratio generally doesn't work very well unless you have a really big endowment. Okay, this one's much better, closer to the median, but still higher than the median. All right, so both of these have a lot of staff per student. And actually, another thing to keep in mind, some of these staff might also be students. So you got to keep this in mind, that ends up being a big number if you pay every one of your students a little bit of a W-2 wage, right? So just because they're students and employees at the same time doesn't mean that we just like ignore that. Like, this is real money going back out to the the student, like a discount almost in some sense. But here's the thing, both of them are incredibly high at Baldwin. Baldwin Wallace, this is probably 99% of their issue why they have these huge losses. Their staffing per $1 million in revenue is very, very high. Okay, so again, in plain language, they have 28 employees per $1 million in revenue. And that's not normal. 18 employees per $1 million in revenue is what's normal.

All right.

And both of them are high again. But again, this is the one that's got the big deficit. Baldwin Wallace, uh, Elizabethtown has a deficit, not nearly as bad though. All right. So I can tell you right away, both of them need to do a staffing analysis and we can do that on a strategic compass. Um, get a really good sense of where these folks are at by occupation and then zoom in on which departments they're probably in and then do a deep dive and figure out what's going on. Can there be, you know, there's a lot of things that happen. I mentioned on many shows, it, you know, you can have too many assistants, you can have a whole department that's devoted to marketing, you can have a whole in-house food service staff, which I think actually both of these probably do. And I'll get to that in a moment. Probably inefficient to do that. You can have huge security details, all sorts of stuff can happen here. You can have counselors all over the place. I've seen really large health service staff for some reason. All these things can be corrected, but you don't— you can't correct it if you don't know that it's weird, right? So that's the first thing we find. All right, so this is all going to say the same thing. I'm just telling they have a— they have a staffing issue, right? So here's total compensation for Officers, this is at Elizabethtown, that's high. Looks fine at Baldwin Wallace, but let's see total compensation for our salaries and wages for non-officers. And again, here's, this is 99% of the problem at Baldwin Wallace, I'm sure. The, they're just spending a ton of money on payroll. That's not normal. Uh, looks fine actually at Elizabethtown. Both of them.

We, we, we see that pattern week after week, that kind of Yeah, it's just stunning how ineffective this industry is at managing labor costs.

Yeah. And now I'm making it very easy, right? We're making it easier. At least it's still not super easy, but right, right. You can see like if you're above the 75th percentile on like everything related to payroll, you got to do something, right? You don't just sit there and say, oh, it's an enrollment cliff or whatever, you know, you Do you— a big part of your job is to make sure that the operation is sustainable and has the right number of employees and contractors and operates as efficiently as possible. And you can see just clear as day that there's a problem. Here, here, this is retirement contributions really high again at Baldwin Wallace, high also at Elizabethtown. Elizabethtown, it was interesting. So they both have more than normal number of staff. right? So that could be driving this, but they also could also have an issue with the retirement plan itself, right? Just being too generous potentially. So that's something to look into. What are you— are you giving like 6%? You're giving 10%. There's a big difference between those numbers. But just right-sizing the number of staff can actually bring this into line with what's normal. And then there are Let's see, I was gonna check other benefits. Yeah, and this is another huge one. Like, they're both just way out of the norm. These are other benefits. This is like health, um, what, health, life, dental, life, dental. Uh, this is completely off the radar. This is the 75th percentile right here, and they're nearly double that. So I don't know what's going on with these benefits packages, but they're completely out of the norm. And they wouldn't maybe know that. It's not obvious unless you see this, right? So they need to go back and look at all of those, see what their health insurance plan looks like, and why does it look so bizarre for their revenue and for their number of students? Again, part of it is you just have a lot of people, but that surely doesn't explain how being way up there like that. Payroll taxes, same thing. Again, they have a lot of people. They have a lot of huge payroll at Baldwin Wallace. Again, way out of left field in terms of payroll taxes. And, you know, these are all accurate, right? Like, the government's not going to tax you for staff that you don't have, right? These are real staff, real issues. Okay, so both of them need to do a serious deep dive on the staffing. And again, it may not be faculty, could be faculty. It's usually a combination. You look at some kind of faculty buyout with a whole bunch of other reductions in force and shared services things that happen throughout campus. I think one of the issues that they have, just to tip you off, is neither of them have a food service contract, which probably accounts for a lot of that staffing. Yeah. One easy thing to do for them that I recommend they do tomorrow or today is to just start getting bids from the food service vendors. Many of— there's a whole bunch of them. I can give you a whole list to call. Get bids from all of them, compare that to what the cost of your current food service is, and make a decision. All right, and it's probably going to be actually better quality for less at the end. There's a whole bunch of other stuff here. IT spending, I think, is one pain point for Baldwin Wallace. Again, not top of the 75th percentile. There's a lot of stuff in here. Insurance, those look normal. Fundraising and so on. I'm not going to go into all this, but another big pain point usually we see is contractors, but neither of these schools are spending on contractors. So it's all about staffing. Let's see, number of contractors. Interesting. Okay, so there is something here. Elizabethtown has a lot of contractors, so they should also, in addition to doing the staffing study, Go through all the contractors, not just the ones over $100K, all of them. They have, they have 31 contractors over $100,000, right? Go through all 31 of those, throw out the ones you don't need, renegotiate the others, right? Really simple stuff. And in fact, go through all the other ones that are under $100K as well. Another thing you can do that sort of helps out with that analysis is I can get it. I can sort of scratch the surface as to what this exercise might look like. Start with Elizabethtown. 10. I want to make sure that's the right—

yes, there you go.

Okay, so these are their top 5, uh, contracts over the— or vendors over the last, um, 8 years or so. Um, and I don't see anything that really is standing out here other than this landscaping contract looks high, but that was 2023 and it's now much better, right? That's great. So maybe they already fixed it. Maybe they already identified that. The security contract is interesting. Yeah, but again, they have high staffing and they're outsourcing security, which is, again, why? Why is staffing so high then? It should be a trade-off, right? But again, no food service contract here. Really important that you see what's not here.

No food service. We almost always see food service in that list.

What's that?

We almost always see food service.

Almost always, almost always. Yeah, and it should be, if you do 2,300 students times 1,500, can do that in my head really quick, but that's about what your food service contract should be. Sort of a normal 1,700 or so is sort of what you're looking at. Compare that to what your current cost is for all the payroll, all the food and everything that you're doing in-house. Or maybe, maybe I'm just missing it. Maybe there's not a residential campus. I'd have to double-check that, but I doubt it, right? I mean, they have undergrads. Undergrads usually have food plans. Let's take a look at Baldwin Wallace. I think it was the same thing. Yeah, no food service again. Should be a top 5 contract. Maintenance contracts looks fine. One thing that's interesting, we've got a ton of IT contracts. They're all really small, but what the heck is going on there? Why do we have all these contracts? And then also square that with the staff you have in the IT department. If these are not like, these might be additive, I don't know. Are they not reducing their own IT staff in using these contractors instead? Hard to say. But yeah, everything else looks good. Again, what's not here is probably the most important thing. No food service contracts. And this one has no security contracts. There's a lot of no landscaping, got maintenance. Yeah, usually those are big savers for staff. But yeah, I'd have to do a deep dive and figure out what vendors are missing, what the cost of their current services are, get a sense. But both of them just really simple, high-level But if you get only this out of this presentation is to do a staffing survey study and also do a deep dive on the vendors and right-size the expenses. And then of course, focus your attention on trying to bring back the net tuition revenue as soon as possible.

So, so, Matt, you have talked many times during the show that colleges can use this data Because both Baldwin-Wallace and Elizabethtown have some selling to do. They're clearly overstaffed based on comparisons to all other private colleges in the country. And you've said again many times, use this data to sell that you are overstaffed to your board. Because, Matt, again, it's the comparisons that matter, isn't it? It's not just the data inside your organization.

Yeah, exactly. So I know this firsthand, um, in my own experience. I was a faculty member before I did this, and basically the That was what happened. I mean, it's cool that the administration came in with a plan that wasn't really supported much at all by data. And then when I did do the data analysis, found that, wow, the data is actually supporting a completely different set of policies than what they were pitching. So don't get, don't get caught there. Don't try to reduce, do a reduction in force without this data. It's just really suicide. Um, I mean, even if you're right, you're, it's not going to matter, right? You have to sell this to the faculty, the staff, the board, the alumni. You cannot sell this unless you have data just like I'm showing here. In fact, much more granular data that we have from the Strategic Compass. And I just tell, I tell all my clients, hey, you pitch this, show this to them and say, you know, what would you do? Yeah, what we're looking at here, like, we can continue to just suffer and have no retirement benefits, no salary raises. Or we can right-size our staff and everybody gets paid a market wage and the place is sustainable. Like, what do you want?

Yeah.

Yeah. And it makes it very easy, right? You're not making any guessing. There's a little guessing, but not, not—

So let's take a look then very briefly at both these colleges. This is from the College Viability App, IPEDS data submitted by both Baldwin-Wallace and Elizabethtown College. And Matt, we see this regularly, but not every day. Not every week, that both of these colleges, even though they're struggling financially, even though they have too many employees, are graduating students. And look at Elizabethtown's numbers— exceptionally strong in graduating students. And yet, Matt, almost every week— not every week, but almost every week— we have the story where colleges at least graduating students more than 50% in 4 years still struggle financially. And as you've heard me say, and others have heard me say as well, It's concerning because we also have colleges on that we review on this show whose graduation rates over here are 30%, 40%, just pathetically low, and they also have financial problems. I can understand that if you're not graduating students, you should be penalized financially. But we have two colleges graduating a decent number, in the case— Elizabethtown case, exceptionally strong numbers— and still, Matt, having financial troubles. And that, to me, sir, is an indication of challenges in the overall industry, and that's not a good thing. We look at admission yield, and again, both are down a little bit, but you know, the high teen, low 20 number, not bad by comparison. We could bring up all the colleges in Ohio and Pennsylvania— I think we are at today— and they would compare favorably in both these colleges. So their admissions yield, students who accepting their offers of admissions and coming, not great but not bad. Let's take a look at how much of the farm they're giving away. And again, I will take a moment to explain this. So institutional grants unfunded are what you and I, Matt, commonly call merit aid. We call it most scholarships, their discounts. You use the term coupons a few minutes ago. And we can see that Baldwin-Wallace went from $37 million, almost up $10 million, to $47 million. So in the course of 8 years, they've gone up $1 million, $2 million, $1 million. Per year in unfunded grants. Elizabethtown interestingly went the other direction. Look at that. I never thought— I didn't see that when I was looking beforehand. Their numbers were essentially the same in 2016, but Elizabethtown has said, hey, we can't continue to give away the store. And so their actual unfunded discounts went down. But Matt, what did we see with their tuition discount number?

Yeah, I'm trying to reconcile this right now. They must have done a reset. Let me see. Elizabethtown tuition reset. I'm just Googling this really quick because remember, their net price went down a lot, right?

Down a lot. And they can quit giving away the store, so that doesn't necessarily jive one with the other.

Yeah, they reduced their tuition by 32%. Okay, so usually when you do a tuition reset, you don't actually change the real underlying price. They did. All right, um, which may have been a mistake.

That they—

I don't know, this would be a really good conversation to have with them to understand, because tuition reset, as far as I've always understood it, is you change the sticker price, but you don't change the net price, right?

Yeah.

They did both. They changed the net price and the sticker price by a lot. Right. So they really did reduce the price. It's not really a reset. They may have just done it too much. I don't know. More students, right, but lower net tuition, right?

Yeah. And again, that's a reflection of the market. The colleges are having to discount. It's the average tuition discount is what, in excess of 55%. So a college, and we'll say 50% to make the numbers, a college with the retail list price of $30,000 is netting per student somewhere in the vicinity of $15,000. And if there's our parents and students, faculty, staff watching this, the, your $30,000 list price is not what your college is collecting. And that would take just a second to look at both these colleges in the context of majors completed. And so we go into IPEDS and we capture 64 common majors across associate, master's, and bachelor's degree levels. You can see that here. And we look at just Elizabethtown, and then we'll look at Baltimore here in a second. We're looking at the number of total graduates in 2020, '21, '22, and '23. The '24 data will come out shortly, and we'll add that to the '26 version. And let's start on the bottom. And Elizabethtown has a small number of programs doing well, double-digit numbers per year. All right, and if you're looking for a number per year, the minimum— this is based on state governments in Texas and Indiana— 5 to 10. You should have about 5 to 10 graduates per year, uh, per major in these areas. So look at how low— how many of these are low numbers. What are they doing in philosophy? They've graduated 4 students in the last 4 years. What are they doing in math? Although their numbers jumped a little bit in the last year, they've graduated 7 students in 4 years. And the same logic applies to Baldwin-Wallace. The only difference is they've got a decent, a much larger number, they've got a much larger number of high enrollment programs. So in some regards, Matt, they're doing a better job in managing the type of majors they get into Baldwin-Wallace. But again, they still have philosophy commonly is a low enrollment major. Um, again, if you're looking at lowering the cost base— and I understand many of these programs provide revenue from required courses and those kind of things— but you got to think about doing away with some of these programs that are low enrollment volume. And let's just look at Pennsylvania. We'll go back out and take a quick look at— as he stalls—

oh, did AWS go down again?

Yeah, you're right. And then finally, just a quick Matt, if you don't mind, I'm going to take a second to show a new product. Yeah, dude, I've talked many times about how boards are— some board members are financially challenged. So just about a week ago, two weeks ago now, I released a program called Navigating the Numbers, and it's a college trustee's guide to financial awareness. And it's an online course. It's available for really anybody, but it's dedicated and focused on college trustees. We help them navigate through 990s that you talked about in your app. We talked about— we show them iPads briefly, big picture, and that kind of view dedicated for what— for what board members, what trustees would want. We talk about iPads data being so old and why that doesn't matter. And then we give some examples. And Matt, you know, a lot of this is from your stuff. We show very brief examples, um, of cash flow and operating expenses. And you can see the list down here on the right— on the left-hand side, excuse me— net tuition revenue. We show a video of that. That talks about what that looks like. And then we have some bonus financial reports, same kind of thing. And then, Matt, we took some of our actual videos, some case studies you and I did on the show in previous months. We actually put those in so you can see a full show that provides case study examples of how other colleges could and did use the College Viability App, the Advanced Compass, and the Strategic Compass to improve their operations. So Matt, I've got to go back to something we talked about before we started recording the show today. And there's the news out today is that enrollment is up 2% and it's kind of being presented with great fanfare. And we saw diverging enrollment for both Elizabethtown and, and for Baldwin-Wallace. But Matt, really enrollment is at best a secondary indicator, as you showed today, of a college's financial health, isn't it?

Yeah, you got to be careful. We've seen it many times where enrollment goes up, but revenue falls. You got to look at the price as well. And that doesn't mean just looking at the discount rate too, because it's all messed up at Elizabethtown, right? We just showed the discount rate went down, right? But their net tuition revenue also is way down and enrollment's up. So you got to reconcile all that. The easiest thing to do is just look at net tuition revenue per student. Super easy, right? Forget about discounts. Forget about all that. Only thing that matters, net tuition revenue and net tuition revenue per student. All right. And then you can figure out why it's going up or down after that.

And again, we show 8 years of the data and you've shared with me that the 2025 financial statements are starting to automatically pop into the app. So we're going to have through the show and the data, the apps you create, the apps I create, we're going to have the most recent data really of anybody else. And it's based on individual colleges. This report from the Associated Press and other sources today that enrollment is up, that's macro. And you've heard me tell the story, Matt, all summer long, I've got a Google alert that tracks enrollment numbers. And there were hundreds, hundreds of colleges over the past many months who said their enrollment is up. Well, as you know, I watched Ben and many of them spun that, but that's not the story. The story, Matt, is how many colleges, hundreds and hundreds and hundreds more, that did not announce any kind of enrollment increase. So it's not the macro, it's not the 2% that matters, I don't question that number for a second. It's the colleges that, that didn't apply to. And as we saw in both of our colleges today, they struggle because of revenue associated with enrollment. And that's not going to change anytime soon, is it?

No, it's going to get worse now. I think this is— I did a study just a couple of years, like last year, I think, to figure out— I just looked at the K-12 populations coming through. And you can see the cliff, it's coming through the grades. And I think this is the last, I'm not shocked at all that enrollment's higher, right? This was a huge senior class that just graduated. Next year's class is tiny, I think, in comparison. So, and they are small from now on. So unless we allow a lot more immigration in the country, which doesn't look like it's going to happen, probably going to see an enrollment issue. The, the cliff is going to be here now. Yeah, I'm going to redo that study again just to make sure I'm right on that. I think it's this next graduating class is small.

So, Dr. Hendricks, can we get to get back together again next Tuesday and look at a couple more colleges? Well, let's do it. So, for Dr. Matt Hendricks, I'm Gary Stocker. Thanks as always for making time to watch the College Financial Health Show with Matt Hendricks and Gary Stocker. We'll be back next Tuesday with two more colleges. We'll talk to you then.