Gary Stocker analyzes six Missouri private colleges using enrollment, revenue, and endowment data from 2013 to 2018. Four schools lost enrollment, five saw declining admissions yields, and only Central Methodist and Maryville grew revenue faster than expenses. Maryville performed strongest with enrollment growth and a 75% graduation rate.
Chapters
Welcome to episode 2 of the College Viability Report. The Missouri private colleges that we will be looking at today are Central Methodist University, Fontbonne University, Hannibal-LaGrange in the east-central part of the state, Maryville University Metropolitan in St. Louis, Southwest Baptist University and William Woods University smack dab in the middle of the state. We are looking at the Actual College Viability app and have these 6 private colleges posted. And let's just kind of take a look at the general trends that we see for the 6. We'll start with full-time enrollment. And as you can see, 4 of the 6 had losses in full-time enrollment from the period of 2013 to 2018. And as we'll say many times, we're always looking at trends and patterns over the 6-year period to evaluate the viability of these colleges. So 4 of the 6 had negative enrollment. 5 of the 6, interestingly, had decreasing admissions yields. Effectively, what that means is there are more students who are accepted to these colleges who chose not to come or chose to do something else. You can draw your own conclusion, but I think there's a trend there. And then as we look at the 2 columns on expenses and revenues, We'll note that of these 6, only 2, Central Methodist and Maryville, showed more revenue growth than they had expenses. The other 4 colleges, Fontbonne, Hannibal-LaGrange, Southwest, and William Woods, all had expenses that increased revenues. Again, this is over a 6-year period, probably not the kind of pattern these colleges are looking for. Let's look at some of the details, and first we'll start off with Central Methodist University. While they have been financially successful, it is concerning that they have lost about 10% of their full-time enrollment from 2013 to 2018, a little over 100, or about 10% of their students. When we look at tuition and fees for Central Methodist, it's up about $5 million, not quite $5 million over the reporting period. So they've done a decent job of maintaining tuition fees, tuition and fees revenue, while losing about 10% of their student enrollment. When we look at their assets associated with endowments, again we see they've done a really good job of bringing up the endowment value from $32 million and change in 2013 up to almost $50 million in 2018 for growth of 17%, well over 30% growth for that time period. The interesting note here is that the $50 million endowment value in 2018 is an okay number. That $50 million number is generally perceived to be the minimum threshold for a useful endowment value. And lastly, for Central Methodist, we'll look at 6-year graduation rates. And again, by definition, if a student started in 2013, 6 years later, 43% has inched up to 45% have graduated. It's grown a, a modest, if not small, 2%. The concerning number here is the 45. Functionally, that means for every 100 students who started at Central Methodist 6 years ago, only 45 have graduated from that organization. Let's move on to Fontbonne University. And again, back at the 6-year change screen, we can see they've lost not quite 500 students, Over the 6-year reporting period, they've tried to keep expenses down, lowering them by $3.2 million, but you can see the revenue has dropped over that 6-year period a million more than expenses. Even more concerning is the drop in the endowment assets from 2013 to 2018 of almost $6 million. I'm sure the folks at Fontbonne are not comfortable with that number. And even as we look at the year-by-year endowment numbers for Fontbonne, The $20 million they started with in 2013 is down to a really low $14 million and change number. Not a good scenario, and we'll see that again with Hannibal and some of the other colleges as well. For Hannibal-LaGrange University, we can see they've lost not quite 200 students over the last 6 years. But we look at the admissions yield for Hannibal, down 8 percentage points over the 6-year period. That's gotta be concerning because again, it suggests that the college is accepting a lot of students, and an increasing number of those students are choosing not to go to Hannibal-LaGrange, go to another college, or choose other career options. And like we have seen for many organizations, when we look at the expenses for Hannibal-LaGrange, they were almost $13 million in 2013, about $14 million 6 years later. So they've gone up about a million in expenses over the 6 years. But if we click on the revenue tracking, we can see Hannibal-LaGrange has lost about $1 million and change over those same 6 years. Again, not a pattern that the college, I'm sure, likes. It is reason to be concerned. It's reason to ask the representatives from Hannibal-LaGrange what's going on. And lastly, we'll look at their endowment. Again, a really weak number compared to their competitors. Really, only Central Methodist has a decent endowment value for all 6 of these colleges. This is just not a good number even though the college has grown it from $6 million to a little over $8 million in the last 6 years. That number needs to be much, much higher. Clearly Maryville University in the fourth line is the strongest performer in this group. Their enrollment is up almost 3,000 students over the last 6 years. Revenue growth has exceeded expense growth by about $2 million, a little bit more than that. If we look on endowment growth, Maryville has gone from $40 to $54 million, good growth over the 6-year period. The $54 million And I'm sure they have plans to get that larger. That's a modest number again, as we have talked about, at best. And the folks at Maryville have to be proud of their total graduation rate and the improvement they've had in the last 6 years. 75% of the students that start at Maryville graduate within 6 years. And we don't see any of these other colleges in this comparison even come close to that. And the final 2 colleges in this comparison are Southwest Baptist University and William Woods. A little comparing and contrasting, Southwest has had a significant deterioration, decrease in their enrollment over the last 6 years. Give William Woods credit, they have been able to increase their enrollment. You have to wonder how much of the store they're giving away because their expenses at William Woods have gone up $1.3 million. Their revenues have gone down not quite $800,000. Even worse by comparison is Southwest Baptist where expenses over the last 6 years have gone up over $4 million. And revenue just about $1.5 million, not quite. And if we look at the graduation rate for both, not much disparity. William Woods is over the 50% mark, Southwest Baptist University at 46%, not good. Neither is the pattern down 2% over the last 6 years, while William Woods has shown some increase in the graduation rate. Still, I'm sure not where they want that number to be. And then last, for both Southwest and William Woods, let's look at the change in the endowment value. Southwest has had some success, maybe $1 million a year, not quite, in growth in their endowment. William Woods, not much success at all, $2 million in growth over 6 years, not a good number, especially by comparison. And in both cases, these are low numbers for endowment. When they're that low, when they're below that $50 million target, there's just some concern about how much flexibility any private college would have with that small of an endowment. And finally, a reminder that all of this data is over a 6-year period. A single year does not a pattern make. However, 6 years of financial enrollment and graduation rate data presents a clearer picture of the direction any private college is headed.
