Six Iowa private colleges compared on enrollment, expenses, revenue, and endowment using 2013-2018 data. Five saw enrollment decline while all six spent faster than they earned. Drake has a strong endowment and graduation rate; William Penn dropped enrollment sharply and fell below the $50 million endowment threshold for financial health.
Chapters
Welcome to this episode of the College Viability Videocast. This episode has 6 private colleges from Iowa. They are Drake University, Iowa Wesleyan University, Simpson College, University of Dubuque, Wartburg College, and William Penn University. There are two things that stand out as we look at a summary of the 6-year changes for these 6 colleges, and that is 5 of the 6 had decreased enrollment over the 6-year reporting period. And remember, all these reports are from the years 2013 through 2018, the last available data from the National Center for Education Statistics. The other item that stands out is when we look at core expenses and core revenues. In the case of each of the 6 of these colleges in this viability report, the expenses have grown more than revenues, or the expenses have not gone down as much as revenue has gone down. Let's take a look at Drake University, and we'll take a look at their enrollment. And we can see over the reporting period, they've dropped about 450 students, or about 10% of their total enrollment. Expenses, if we look at those, go back to the 6-year changes, expenses for Drake University have increased about 9 times faster than their core revenues have. When we look at the endowment, this is an area that's strong for Drake University. It's grown about $51 million over the 6 years. And at $220 million and change, Drake University is by far better positioned than all of its competitors in this, in this viability. And Drake University is positioned by far better than its competitors in this analysis. And lastly, we'll look at the graduation rates for Drake University. Strong across the board, especially when we compare them to their competitors. A very strong graduation rate, one of the strengths of Drake University. Next, let's look at Iowa Wesleyan University. I want to start out with graduation rates on this one. And we'll go to the comparison of these 6 colleges and their 6-year graduation rates. Iowa Wesleyan just does not have good numbers on graduation. So for every 100 students that starts at Iowa Wesleyan University over this 6-year period, only 26 graduated within 6 years. I'm sure the organization is not comfortable with that. But again, over a 6-year period, that's a trend that's concerning. Let's also remember that in late 2018, Iowa Wesleyan announced that its viability was in question without some kind of community support and without identifying some kind of merger or alliance partnership. And last, we'll look at the endowment for Iowa Wesleyan, and it has gone up not quite $4 million over the course of 6 years, but the total number is not where it needs to be. As we have shared before, the general threshold for a minimum endowment for a private college is somewhere in the area of $50 million. Let's look next at Simpson College. And as we look at the 6-year changes summary, enrollment is down about 371. We'll look at those details in a minute. And again, like we see with almost all of these private colleges, the expenses have gone up a lot faster than the revenue has gone up. To look quickly at the enrollment numbers for Simpson College, we are looking at being from a little bit under 2,000 to about 1,500 and change over the 6-year period, down 371. Not the pattern I'm sure this organization would like to see, but again, a 6-year trend is clearly that, a 6-year trend. How to overcome that consistent decrease in enrollment is something the folks at Simpson College will have to focus on. I'll point out graduation rates for Simpson College. They are strong by comparison to most private colleges. I would want to keep an eye on this change that shows the graduation rate, the graduation rate for 6 years at Simpson was down 6 percentage points over these 6 years. Just something to keep an eye on because again, clearly a trend is evident. The University of Dubuque is one with strong enrollment growth, over 450 over the 6-year period. And again, like we have seen from other organizations, there are challenges with managing expense growth with revenue growth. And to look at the endowment for the University of Dubuque shows again a strong starting point, well over the minimum threshold of $50 million, and substantial growth, almost doubling the number over the course of the 6 years to $156 million and change. Pure speculation on my part, I am guessing that they had quite a successful capital campaign to raise money for something on campus during that reporting period. Wartburg College is next on our list, and again, the pattern that we see, the trend that we see is Enrollment down 247 over the course of 6 years. And here's an example though where clearly Wartburg tried to manage expenses over the 6-year reporting period, down not quite $1.5 million. But look at the revenue. It was down $12 million and change over the same reporting period. So even though it's negative numbers, the expenses are still not going down as fast as we see the revenues going down. We'll back— jump back up to enrollment for Wartburg, and again, there's the numbers that we see from 1,800 and change down to 1,500 and change, down 247. That's going to be somewhere in the vicinity, 13 or 14% decrease at Wartburg. And the final college on our list in Iowa today is William Penn University, and I'm starting off with the enrollment screen in the College Viability app. And we see a substantial decrease in enrollment of not quite 500 students over the 6-year reporting period. That is in excess of a 25% decline in the enrollment for this college. Let's look at tuition and fees for William Penn. And again, down $2 million, $2 million and change. It's just not the pattern that any business wants to have. When in the course of a 6-year reporting period your revenue number is a negative number. Just not what these colleges are looking for. It just is a continuing indication of the challenges they face in financing and funding their organizations. Let's look at the endowment for William Penn. And again, we start with the number. It's up a little bit, barely over $100,000 for each of the 6 years on average. But this $7 million, almost $8 million number in 2018 is well below that threshold that we look for of something in the area of $50 million for a minimum threshold. And finally, I'm going to remind again something that we talk about a lot. The data is presented— that's presented here is through the Center for Education Statistics, the federal organization, and it's IPEDS database. The most recent available dates through this National Center for Education Statistics is 2018. So you're looking at the most recent data available. There are some, when they look at this data, suggest that it's too old, and arguably you'd like it to be more timely, but that's the hand that we're dealt. But more importantly, I would offer, it's the pattern and trend that we're looking at. Over 6 years, an organization like William Penn If we look at their enrollment and it's down 472, I don't know that it matters that much what their 2019 numbers are. It's highly unlikely they have erased that deficit in a single year. So we're always looking for the trends and for the patterns in this data.
