Gary Stocker analyzes 40 small private colleges in the Northeast, tracking enrollment, graduation rates, and grant spending. Colleges graduating fewer than 50% of students in four years are "tuition collection agencies," and he flags Hampshire College's collapsing revenue and Bennington's rising aid costs as warning signs. Private colleges are closing at roughly one per week in 2024.
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Hi, it's Gary Stocker with College Viability again. We're doing this week's version of the Top Bottom Report live off of the College Viability app, the 2024 Private College Viability app, the executive analysis version. And I'm doing a kind of a different approach this week. I'm going to take a look at some schools, some regional schools in the Northeast. Let me show you the list here. Some regional schools in the Northeast in the states of Maryland, Maine— sorry, Massachusetts, Maine, Pennsylvania, Rhode Island, Virginia, and Vermont. And the list of 40 colleges that fit those states are listed right there in their regional colleges. Let's jump right in. I always start to look— I always start by looking at the FTE Fall Enrollment. And the spec I set for this one is colleges in those states, regional colleges in those states, with FTE enrollment in 2022 of less than 1,000 students. So let's click on that 2022, and you can see all these colleges have 2022 enrollment of less than 1,000. Some, like Pittsburgh Technical, have dropped below that number over the last few weeks. Matter of fact, let's take a look at last few months, last few years. We can see that 5 or 6, 6 or 7 of those colleges actually dropped below 1,000 from 2015 to 2022. So there is the range of numbers. Those are the top in terms of 1,000 students or less. You can see the 8-year change. Let me sort by that 'cause that's a better measure. So we can see some of these colleges, a dozen or so, have actually increased enrollment. I'm not sure that's a substantial increase down here, but they've done something to increase enrollment, and you can see the percent change on the right-hand side. Let's flip that again and look at the colleges with less than 1,000 students in 2022 and look at their decrease in enrollment. And of course, you can pause the video to look at these colleges in more detail to see which ones are ones that are not doing particularly well, especially with that FTE enrollment less than 1,000 students. Let's move on, and I always go to graduation rates second, so let's go to 4-year graduation rates. And let's just look at 2022 again, and I will sort by that. So we can see that about 10 of these colleges actually were able to graduate at least 50% of their students in 4 years. That's the minimum threshold we have here at college viability. Let's flip that again and let's look at the colleges. I'm going to scroll down a little bit. Look at the colleges from Randolph College all the way up. And some aren't even reporting their graduation rates. But look how low some of these numbers are. Now I make the case, agree or disagree, that if you can't graduate at least 50% of your students in 4 years, you're not much more than a coin toss college. And at some point, it's fair to ask, if you can't graduate your students, are you less of a college and more of a tuition collection agency or a tuition collection enterprise? It's a fair question to ask. If you're not graduating students, that's what they're paying you for. And you have to wonder what the business model is if you can't graduate students. Let's move on. Let's take a look at retention. And again, I've already got this pre-sorted. You can see those colleges doing well. Say 80% or higher retention rate is okay, is acceptable for sure. Let's flip it again and let's look at those colleges that are not retaining anybody at all hardly. And less than half, not more than half of the students, not much more than half of the students are being retained from one year to the next. And again, I'll scroll slowly through the list. You can pause the video at any point to see where your college or colleges stand in this comparison. Let's take a look at annual yield, sorry, admissions yield. And again, this is the percentage of students who are accepted by a college who actually show up, pay tuition, and take classes. And again, Fairfax University, they're all over the place. I'm not sure I believe their data points. But we can see Goddard College, which is closed, they had a 67% yield. So for every 100 students they accepted, 67 showed up. That's a really high number, and they still weren't able to survive. That's a story for another day. And again, you can see the numbers of those colleges. Let me flip it one more time for 2022. And the app itself, should you purchase it, you can sort by any of these columns to see what the data trends are. And you can see some of these colleges are not hardly getting any students at all to accept their offer of admissions. Draw your own conclusions, but the comparison suggests, for whatever reason, students are looking at these colleges like Fisher, Hollands, Randolph, Rosemont, Thiel, and others and saying, hey, I've got better options, and they go to those locations. Let's take a look at something that's kind of inside baseball. Let's look at the institutional grants, and we're going to look at the one that's unfunded institutional grants. I've kind of blanked out the funded one here, and what we're going to take a look at is the 8-year change. So I'm going to leave it as I've got sorted now, and you can see in the last 8 years that Hampshire College, Hampshire College has gone from about $27 million down to about $15 million. So not quite $12 million in decreases in unfunded institutional grants. You and I know that as merit scholarships, we know that as most scholarships, they're discounts. Let's flip that and let's look at the 8-year change on the other side. And Bennington College, for example, went from $17 million to $30 million, a 76% increase, $13 million over the course of 8 years they offered unfunded institutional grants, tuition discounts, merit aid, scholarships, those kind of things, just to get students in the door. And again, you can see the numbers on their own. You know, some of these aren't that bad because it's a very small percentage, but even New England College of Optometry, even though it's a relatively small number, they have had to more than double that. Over the course of the last 8 years. Here's the conclusion you want to draw from that. Colleges like these are trying to compete on price when in fact almost all colleges are nothing— are not much more than a commodity. They provide you with a bachelor's degree, a master's degree, a doctoral degree, whatever the case may be. If you're giving away the store just to get students in the door, you have to wonder about the long-term financial health of those colleges. Let's take a look at, at tuition fees. This is the last one I want to take a look at, and this is the tuition and fee revenue from these colleges, these 40 colleges in those states that I listed for you. And we can see, I've already sorted this, that some of them— and you can see the names over here— have been able to grow their tuition and fee revenue. Good for them if they're able to increase prices to increase and still maintain students That's good for the colleges and it's good for the students because it provides the colleges with the resources, arguably provides those colleges with the resources to provide a proper college education. Let's flip that 8-year change and look at the colleges in the last 8 years. Hampshire's one of them, although they're claiming to have rebounded now. I doubt that seriously. Down $28 million, almost $29 million over the last 8 reported years, and you can see the others as well. And so effectively, they're running a business that has lost this much. University of Valley Forge was at $10 million in 2015. They're down to $5 million in 2022. Draw your own conclusions. And again, lower tuition rates are good for the students. They're not always good for the colleges because those revenues are needed. And if a college has lower tuition and fee revenue, It means they're trying to compete on price, and that's never, or rarely ever, going to be a positive factor. And so what does this all mean? And how, as a student or parent, faculty member, staff member, even college leader, board member, or other community stakeholder, how do you use this data? We're in a period now where about one private, not-for-profit college closes per week in 2024. That trend is almost certainly going to increase for a wide variety of reasons, and that's beyond the scope of our top-bottom comparison today. But we just looked at a series of 40 private colleges in those states that I listed, and you can see those that, by comparison, are doing well, and those that, by comparison, are not doing so well. Here's the guidance I provide, especially to students and their families. If a college is consistently on the bottom of these lists, be very concerned about the financial health and viability of these colleges. We hear on a regular basis, and Wells College in the last couple weeks was the most recent, they close on short notice. They give the students and their families, the faculty and the staff, the community, very little, very little heads up that the college is about to close. You have to make your own assessments. You have to make your own judgments. We've come to a period of time where colleges are so focused on their own survival, they're not sharing the reality of their situation with any of their stakeholders. So use the data in the descriptions down below. I'll include links for both the private college and the public college viability apps. And for each, there are versions for executives, for faculty and staff, and for students and their families. Thanks for making time. My name is Gary Stocker.
