Comparing Colleges Minnesota - Will my college close?

Welcome to another episode of the College Viability Review. Today's episode is on 6 comparatively financially healthy, stronger private colleges in Minnesota. It's an interesting combination with mostly strong enrollment growth across the 6 colleges, strong endowments, and really strong graduation rates. And we don't see this very often in the combinations of colleges that we bring together for these reviews. But each of the 6 has substantial issues in matching expenses with revenues in the last 6 reported years, and that's from 2014 to 2019. Hi, my name is Gary Stocker. For the past 5 years, I have been researching the health, the financial health and viability of private colleges in the United States. In 2020, I created the College Viability App that I'm going to share with you today when comparing these 6 private colleges in Minnesota. During this video, I'll show you how to quickly and easily compare the financial health of some of Minnesota's private colleges that you may be considering. I can help you become more informed, more comfortable, and more confident in your final college decision. The data below, the data that I use, is from the National Center for Education Statistics and includes the most recent data released by colleges, and actually prepared by colleges themselves, from the periods 2014 through 2019. It's not the most recent. I'd like to see more recent data, but that's what we've got to work with. It still provides a good comparison of one college to another. The 6 colleges that we're going to look at today are Bethel University, Carleton College, Macalester College, St. Catherine University, St. Olaf University, and the University of St. Thomas. Let's start off by looking at the summary page on the College Viability app for each of these 6 colleges. And again, you can see the reporting period is 2014 to 2019. The data was provided by the colleges themselves to the National Center for Education Statistics. We can see that Really only two of the colleges had enrollment issues. Both Bethel and St. Olaf had issues with maintaining enrollment. Both had a slight decrease. You can argue Bethel had a substantial decrease. But the other four showed at least modest increases, from just a handful at Carleton to decent numbers for Macalester, St. Catherine, and the University of St. Thomas. We can also look at the changes in how much tuition and fee revenue these colleges collected. And we can see that again overall 4 of the 6 did fine. They showed an increase in the tuition and fees paid and collected. You can see the numbers here. You can also look though at both Bethel University and St. Olaf and they had decreases in tuition and fees collected over the reporting period. It's one thing to have a small revenue decrease, in this case tuition and fees over 1 year, maybe 2 years, it's more substantial to see that decrease over a 6-year period. We can then look at the category that shows the 6-year changes in expenses and the 6-year changes in core revenues. And we can see that in each and every case, the 6 colleges have had trouble matching their expenses with the revenues. And it can be relatively or comparatively modest numbers from Bethel who saw expenses go down about $500,000, but revenues go down about $7.5 million. But look at the other 5 colleges. Carleton and Macalester, St. Catherine, St. Olaf, and the University of St. Thomas all had substantial increases in expenses over these 6 years. And really all except St. Catherine had substantial decreases in their core revenue. Now this almost certainly doesn't mean the college is going to close. It really doesn't even mean in the particular set of these 6 colleges that any of them will close. But this is the kind of scenario where if you're looking at this college, you want to be able to ask your admissions rep, the leadership, what are you doing to balance these expenses and revenues? And I can tell you, here's what's happened in most cases with this scenario. The colleges look at cutting faculty, staff, majors, or courses. It's fair to ask these colleges with those revenue and expense imbalances if they have plans to do that. Next, let's go take a look at the graduation rates. And this is an impressive set of 6 colleges. I have done hundreds of these evaluations, and in too many cases I see 6-year graduation rates. 6-year undergraduation rates below 70%, which is my threshold. And in way too many cases, they hover in the 50% and below. Just not good. But if you look at the numbers for 2019 for this set of 6 colleges, with the exception of St. Catherine in the low 60s, and that's not a good number, the other 5 show good, strong graduation rates. And what this tells us, what this tells you, is that these colleges have the systems and processes in place to make sure your student graduates in 4 years ideally, but in a worst-case scenario, 6 years. I'll also add that most colleges now just report that 6-year number. Too many colleges are really uncomfortable with their 4-year graduation rate, so they're staying away from, from commonly posting that kind of number. The next thing I want to look at is the endowment, and not only the endowment for all all 6 of these colleges is pretty good. The threshold I use is $50 million. You can see Bethel University is effectively at that number. But 4 of the 6 have really strong endowments. You can see Carleton and Macalester, St. Olaf, St. Thomas, all strong numbers. The $93 million and change at St. Catherine, better than many private colleges. And again, what this shows you, what this shows me, is these colleges have systems and processes in place to raise gifts, raise funds from alumni, friends of the college, and many others. Colleges that have weak endowments, and in this case Bethel stands out by comparison as one with a comparatively weak endowment, you have to wonder about their capacity to raise those funds down the future. If they haven't done it to date, what makes us think, what makes them think they can do it in the future. And then let's look at a new feature in the College Viability app. It allows us to compare how much colleges spend per full-time student, per FTE, that you'll see in the bottom part of the screen here. And I have 6 areas where I compare how much colleges are spending. So let's take a quick look at these 6 colleges and look at which ones are spending more for each of those 6 categories. And the first one I'm gonna click on is Academic Support. I'm gonna go to 2019 for each of the fields, and it's already sorted, and we can see that the academic support these colleges provide, and they define it slightly differently, is substantially different, from almost $11,000 per student at Carleton to not even $2,000 per student at St. Catherine. Here's how you use this. You ask the question, why the disparity? What is Carleton doing that St. Catherine is not doing? Or even look in the middle. What is St. Olaf doing that St. Catherine is not doing? Clearly there's a difference between how these colleges spend their resources for academic support. Let's look at retention rate. And again, we're gonna go to 2019. I've already pre-sorted. And we can see, again, this set of 6 colleges has a good set of numbers. You often see that retention rate well below 80%. So each of these 6 is doing a good job. It's, it's important, especially when comparing them to private colleges you may be considering that are not doing such a good job with retention, and their percentages are much lower than the 80% you see here on the low end for St. Catherine. Let's look at institutional support, also known as administrative support. How much are these colleges spending for administration? Per student. And again, we see substantial disparity from top to bottom. We can see both Macalester and Carleton Colleges in the 10,000+ range, and we can see in the bottom 3, St. Olaf, St. Thomas, and St. Catherine, with substantially smaller numbers. It's impossible to interpret why the differences exist, but it's a fair question to ask, especially when you're comparing one to the other, If you're comparing, choosing between Macalester and St. Catherine, and all things else equal, all other things equal, why is there such a disparity there? What are you getting for the extra $7,000 and change at Macalester that you're not getting at St. Catherine? Let's look at instruction expenses, the actual faculty expense. Let me sort that. And again, we see great disparity. And I won't repeat what I've said before. It's fair to ask these questions. Why the disparity? Why is there a 3 times plus disparity between Bethel and Carleton? What are you getting for your tuition dollars? What are the differences in the tuition dollars between the two? And you can see where the focus is. Let's quickly look at tuition and fees revenue. We saw that earlier. And again, you can see that per student, there's great disparity. Does $33,000 per student make Carleton a better college? Not in my mind. I'm not going to make that judgment. Does $16,000 in revenue per student at Bethel make it a bad college? Not making that call. That's your decision to make. The College Viability App lets you compare those and many other parameters from one college to the next. And finally, student service expense, student support services provided to your students. And again, there's a disparity, maybe not quite as much as we've seen before, but again, it begs the question, why is there this disparity from the top spender per student service, per student on student services, to the bottom number? By the way, if you would like to see my financial comparisons of private colleges not on today's list in Minnesota or other states, go ahead and put your list of colleges, maybe 3 to 5, 7 down below in the comment section. I'll be glad to put that on the list of episodes I am producing for future YouTube production. I don't do predictions on these videos. I don't do guesses. I just provide comparisons from data the colleges themselves have provided to the National Center for Education Statistics. As you saw today, some of these colleges compare well. Some of the colleges don't compare that well. You or your child or your loved one or your family member deserve a quality college education. I want to give you information to help you make the best possible college decision that considers the financial health, and in some cases the viability, of these private colleges. You will have already looked at the, the majors, the courses, the campuses, the faculty, the online offerings, the amenities, let's add a comparison of a college's finances to your decision-making process.