Eckerd College (FL) & Valparaiso U. : Inside Their Financial Health Feb 17 2026 on TCFH Show

Welcome back to the College Financial Health Show with Matt Hendricks and Gary Stocker, where each week we look at the financial health and yes, even the viability of private colleges throughout the United States. We use data from the colleges themselves, their audited financial statements from 2016 and beyond, something called the IRS 990, which provides all sorts of good data. And of course data from the National Center for Education Statistics and its IPEDS database. And one of the fascinating things, Matt Hendricks, of the work we've done here is we never have to look for colleges to talk about because we have folks dropping us requests all the time. We're now well into late March with requests. If you've got a college that concerns you or a college you want to brag about that has good finances, drop me a note through the connections in LinkedIn and we'll be happy to put that college on the list and do that for you in the coming months. And Dr. Hendricks, a fascinating observation that there's always people worried about colleges. Who are we talking about today?

Yeah, today we have Eckerd College in Florida and Valparaiso in Indiana. All right, I have the financial compass pulled up, and I'll get right into— I'll start with Eckerd in Florida. Are you able to see it, Gary?

Yep.

All right, all right. So I pulled up Eckerd, and you see right away it pre-populates with their peer set. These are double confirmed, uh, Florida Southern College, and then a bunch of self-reports. It's not the best peer set. Uh, if it's a self-report, it means, it means, for example, Eckerd said Roanoke College in Virginia was a peer, but Roanoke did not say that Eckerd was a peer. And, uh, none of Roanoke's double confirmed peers said Eckard was a peer. So that's why that gets that designation. Uh, so we do have one confirmed, double confirmed, but the rest are self-report. So those are a little bit less reliable, but, uh, we're rolling with it. All right, um, so I'm going to go right down to the key metrics table first, zoom this in so you guys can see it. So this gives you a 5-year snapshot of, uh, what's been happening with some of the primary financial and operational variables at the school. And this is really what a board should be looking at. I'm sure many are, but this is available to you as a non-board member, like, right away. So a couple— everything that is flagged here, we're going to focus on. All right, so unrestricted net assets have been shrinking over the last 5 years, which is a huge red flag. Those should be growing substantially, especially with the way the stock market has been performing the last 5 years. So this is going to be a big red flag right away. Um, they've got average deficits over the last 5 years, losing 1% of their operating revenue in terms of a deficit every single year on average. Looks like we had some big losses here in '22 and '23 and then a rebound in '24. Um, so we'll investigate that. This just confirms the same thing. Actually, this, this was in dollar value here, so lose $1 million a year about on average in the last 5 years. This is in percentage terms, that income margin— 5% loss, 5% loss, and then a 5% gain, which is, uh, good, good rebound there. We'll take a look at that. Um, FTE students, pretty stable. That's great. Uh, only down 2%, which is better than a lot of schools. It's probably about normal. Net student revenues are up 14%. Excellent. So some good news here. Perhaps that's relieving pressure on their, their budget losses here. So that's good. Yeah. And although this is flagged, this is really close to where you want to be. One is the CapEx to depreciation ratio that you're really kind of looking at for the threshold. Anything below 1 on average, I'm flagging. Um, but they are at right about 1, which means they're not growing their capital stock, not building new buildings and stuff like that, but they are replacing stuff that's wearing out at the same rate. That's good. Um, okay, cash and investments to— I'll make this a little bit bigger. By the way, if you didn't know that, you can change these columns. This is cash and investments to operating expenses, and that ratio is declining. All right, I'm sure it's tied to these losses that they've had and the reduction in unrestricted net assets. So let's take a look, um, and see what's going on, um, compared to their peer set and compared to national norms. So just looking at yourself over time is useful to kind of gauge against yourself, but yeah, uh, to get a better, better picture, much more important pictures compared to your peer set and compare it to the, you know, what's normal at the national level. You can see Eckerd's U-NAV. And again, the easiest way to think about U-NAV, it sounds complicated, but it's really their net worth, net assets. It's really their liquid net assets. The way I think about it, right, it's their unrestricted net assets excluding the buildings, right? Because buildings are not very liquid. So it's excluding the equity they have in the buildings themselves. It's an estimate of that. So their liquid net worth— wow, this is percent change. Let me see how big it is. Yeah, they got about $40 or $50 million, $50 million or so in unrestricted. So liquid net assets, that's great. So they've got a nice cushion. The issue that I'm seeing here, though, is that this is really flat. So back— so for example, back in 2016, they had $44 million and they only have $50 million today. Should be growing a lot faster than that. And to show you that, I'm showing you this percent change. Range look. Um, so their peer set has grown by 96% over this 5-year— or this 9-year period from 2016 to 2024. And their UNAP grew 15% at Eckerd. So, um, significant lag there, uh, which means they're not growing in real terms. What it means, if I adjust this for inflation, it means their real unrestricted liquid net assets are declining, right? So their cushion's getting smaller in real terms when you adjust for inflation. And I just did that by clicking on this. Um, should be growing. Normal is growing by 25%. Their peer set's grown by 50%. All right, so, uh, that's that. We showed— we saw that their 5-year unrestricted net assets is really a similar metric, but this was going to include their buildings. Uh, unrestricted net assets percent change. And we saw it was declining in nominal terms, not re— not adjusted for inflation, since 20— what did I say— since 2020. Yeah, and you can see that here, uh, it's declining. But yeah, significant lag compared to national norms and their peer set. Yeah, so almost every case, um, you can have really bad income returns in the stock market, but that hasn't been the case over the last 10 years. So almost certainly this is caused by running deficits. So I'll show you net income margin. And absolutely, so we have negative net income 1, 2, 3, 4 years in a row. Um, really not the norm. Um, and then a big bump up here in 2024. They haven't— I haven't seen their '25 audit yet, but hopefully they continue this. That's a good rebound. But again, the norm—

and you know, Matt, if somebody from Eckerd College is watching this show and they want to come on and talk about what they've done, what they did in 2024 to turn that around, we'd love to have you on the show. Drop me a note, gary@collegeviability.com. I'll be happy to have you on the show to talk about it.

Yeah, and let's see, we can probably dissect a lot of it right now. So we see this big bump here. Let's see if we can explain that by looking at their revenues first. Total operating revenue and percent change. So they did have a surge in revenue here. Uh, revenues look great, right? Their revenues have actually grown more than their peer set and far more than the, uh, the national norms. Um, so they're up 34% on operating revenue since 2016. That's excellent. Um, so it's almost surely an expense side.

Oh yeah, I was gonna say that we don't want to see on expenses.

Yeah, so total operating expenses, percent change. Yeah, their expenses have grown by 30%. Revenue, which I, I can't remember what I just said, but the revenues, uh, 14, I think. 14. Yeah, so double the growth for the expense side. So yeah, um, their expenses have grown more than the peer set, right? More than the national norm. Their peer set's growing their expenses about the normal rate here. Yeah, so we have— looks like the story is revenue is doing great, but they're increasing their expenses faster than the revenues are growing. See that quite often. All the time. So let's take a look at— dig deeper into each of these, starting on the revenue side. Let's take a look at student revenues. And remember from the snapshot, that looks excellent. And it indeed is excellent. Yeah, their net student revenues— again, this is auxiliary, uh, so that's room and board, athletics, um, and then net tuition revenue is the gross tuition minus discounts and grants and stuff like that. They're up 25% since 2016, which is excellent. It's near the top 25% of all schools. Their peer set's actually lagging behind the median, uh, school nationally, so they're doing great here. Growing revenue. School's doing great on the revenue side. Um, I'll check their per student. Yeah, they're even charging more.

Yeah, yeah.

Um, and we can check percentage change. Yeah, the price has grown quite a bit.

Um, so must be that Florida location, man.

Yeah, yeah, they're in Florida. Yeah, they're doing great. Although we did have a school that was in Florida or Texas recently that was shrinking, so that was a bit of an anomaly to figure out, but Um, oh, by the way, you like the new, the new format with the dark graphs?

Yeah, yeah, stands out nicely.

Yeah, I forgot about that change I just did. Um, okay, so revenue looks great. Um, I think most help we can give them is going to be on the expense side and take a look at what, what expenses are growing. And, um, we'll start with the big items usually. Let's do salary, wages, and benefits and percent change. And this is really what is explaining the issue with the budget. Payroll's grown by 27%. Again, without having the benchmarks, a normal person might say 27% growth in payroll sounds about right. We've had a lot of inflation, but it's not right. It's far higher than the national median and far higher than their peer set. Okay, so they've grown their payroll quite a bit. I guess the question becomes, is it the number of people that have grown or just the pay, or both. And we can get a sense of that by looking at W-2 employee count. All right, that looks pretty flat. Good. Uh, percent change— so W-2 employees change looks— I mean, although there was a significant growth here, let's see what the raw values are here. 12. So they had about 1,300 employees in 2022. And now they have 1,500 about. So that's certainly part of it. They've grown their number of W-2 employees significantly in the last 3 years. So, uh, that's probably the explanation. Let's take a look at if it's high. It's actually low relative to their operating revenues, which is good. So, um, they've grown their payroll. They've grown the payroll. Um, by the way, I didn't check that. Let's check that on salaries and wages. Sorry, I'm kind of bouncing around a little bit, but Forgot to check this. Yeah, payroll has grown, but it's actually low, um, so that's fine. I'm not going to complain about their staffing. It's probably on the contractor side then, right? It's going to be—

it's important to note that while the salaries have increased, it has not increased as much as the revenue has grown, right?

Right. Uh, W-2 employees. Okay, so it looks like the employee, like, in our internal staff side looks decent. Let's see what we can learn on the contractor side. That's another big, um, chunk of money usually. Percent change. So the number of contractors has actually decreased. So this is interesting. We had another one like this recently where we had to do some work to figure it out.

Yeah.

All right, so he's spending on total fees for services has skyrocketed. Um, let's go to the raw values here. Okay, so this could be a good explanation of what's happening. Fees for services was $1.2 million, now it's $3.5 million. So it's a little bit of money, uh, but a lot. So what happens on the 990— this is from the 990s— there's a catch-all container really in the 990 for all the fees for services that are not in the other columns, and that's what this is. Um, so there are a lot of vendors that are in other columns like advertising and IT and so on, so we may see those in this next exercise. So let's start with, um, payroll advertising spends per $1 million of revenue. That's actually quite low. Advertising, IT. Okay, all right, I think we found it, Gary. We have an online college This is, um, this is just IT spend that does not include, does not include any of the payroll, right? Right. So this is $3 million for IT. That is really high for a school that has their revenue. You can see that's the 75th percentile and very high for their size of their school in terms of FTE.

I think, Matt, I've heard you make the point before that this could be that Eckhart has made a sizable investment in online courses.

Yeah, that's possible. Um, but it's worth checking this, right? Like, like I said, the cost of checking these— I've said many times, cost of checking these is really low, right? Go in with an open mind. Um, don't assume the status quo is the right way to do it. Um, and double-check these, price shop. Um, check— I mean, there's a surge here. It looks like the surge in the spend per FTE on IT started a long time ago. So schools tend to not have very long memory. But again, go back to what the situation was in 2017, understand why this increased so sharply here, um, and has continued to increase sharply, and, uh, check if that investment was worth it. Uh, perhaps it is, but maybe you can get a slightly better deal on this as well, $3 million just on the IT stuff, uh, vendors and equipment. Um, and then check your internal staff as well there. So that's one important clue.

And you can make the argument if you're at Eckerd College, you can look at this chart, and again, this financial compass that Matt is showing you, only $219, but you can see where you relate in terms of peer groups or statistical measures. So you're way above the 75th peer if you're at Eckerd College. Ask your vendor why and what you can do to get closer to the median.

Yep, yep. Uh, okay, here's another issue. We've seen this with a lot of the schools in Florida. I'm going to do a quick check here in a second, but massive surge in— so they went from $500,000 to $2.6 million on insurance in one year. Again, go back, try to understand if you're new here, if you've been here for a long time, understand what this surge was. That's a significant amount of money. Right? I mean, just to put it in perspective, $2 million, that, that's probably 2 or 3 academic departments at this school, right? So just putting it on that scale, it's a lot of money. Um, all right, so, and they're, they're at $3 million now, and their peer set has really not changed at all. But I was going to do a quick exercise here. Let's see, I'm gonna do just the Florida peer. That is the double confirmed, by the way.

Yeah.

I'm kind of curious if this is related to hurricanes and stuff.

Sure is.

Yeah. Okay, so the Florida peer is doing similar. So they may not be able to control this, but again, really low cost to check this, really high potential value for doing this exercise. Check all your vendors. Doesn't cost much and the benefit can be massive. All right, I'm just going to refresh this instead of adding all those peers back in. Um, so Eckerd. All right, so we said insurance, IT, and, um, those may well be vendors. We may find that in a second. So let's check some of these other big expense items. Uh, where were we? 990s. Okay, IT, insurance, uh, fundraising expenses per $1 million of revenue. That's normal. Travel. Fees. Okay. Let's check specific contracts. So I think it's mostly some opportunities in insurance and in IT potentially, some cost savings there. Let's go down to their actual vendors and we may learn more about what's happening with the— with those surge in spending. So Ecker. There we are. All right. Okay, I think we got some more savings here potentially. I'm trying to make this better to view, but I may need to zoom out a little bit. Hopefully it's decent on your screen. I look at a massive screen, by the way, so this— I hope it's still decent on your side. Okay, so the first thing I see right away is we got these things flagged here that they're flagged if they're high for the type of contract that it is. So we have this type, food service contract. $3,000 per FTE here is quite— it's nearly double what is the norm for a food service contract. So again, I'm not saying, hey, these people are not doing a good job or whatever, but they should put this out for bid, all right? Or at least call the vendor and say, hey, why are we at $3,000 per FTE versus $1,700, which is the norm? Can we get closer to $1,700? And you can see that that's significant money. That's probably $2 or $3 million to get down to the norm. So that's certainly something to check. Also, we have a managed maintenance contract. Again, this is really high for how many students they have, also high for revenue, both of those. Okay, interestingly enough, I don't see an IT contract in here. So brings up some questions about why that IT spend is so high excluding staff. Maybe they have a huge internal staff that's doing IT and that's all their internal equipment. Put this out for bid as well. There's vendors that can provide this service for you where they house all the equipment and probably is it better honestly than having in-house IT and you might be able to get a better service for, for lower costs. So that's worth checking. Um, yeah, but I don't see an online vendor here. It's really interesting. And they would certainly be costing more than $700,000, I would imagine. So I just wonder if that IT infrastructure is all on-site. So those are some trying to do the whole thing themselves. Yeah, that's certainly a bad idea. Um, you know, these universities are not a tech company, right? And yeah, had really no business trying to run a tech part of their, their school. Just outsource this to the pros that do this all the time and focus on your mission. Um, construction, painting, architectural. Yeah, okay. So, um, check— yeah, check on outsourcing online, um, if they have that. Uh, outsourcing IT, check the insurance setup, what's going on there. It may not be controllable, but certainly worth a look. It's the best advice I can give to them with this really high-level analysis right now. And of course, check this food service. This could, this could be $2 or $3 million in savings here. I'm really confident about that. So that could be enough to, you know, get rid of their budget deficit, which I think was only $4 million, right?

Yeah.

At least it was positive in '24, but '23 was negative. All right, I'm gonna flip over now to Valparaiso, Indiana, and follow the same sort of format here. Again, we have a lot. This is a great peer set, almost all double confirms or a double confirmed of a double confirmed and self-report. So this is great. Hard for them to argue that this is not a good peer set because these are both schools saying that they're peers of each other. Um, all right, so let's start with the key table here. Actually, this looks okay. Move this over, try to get it all on the screen for you. But can you see that okay, Gary?

I can, and don't worry about the zoom out because in editing I zoom in on the numbers you're talking about. I've got a full screen, I'm good.

Yeah, okay, so a lot of red flags here. Um, net assets decreasing Um, UNAP is way up. That's— this is probably an error in the data. Yeah, I'll double-check this. Went from $9 million to $20 million. Um, or it could be— this is estimated UNAP. I don't want to get into the weeds here, but basically I'm subtracting off debt, right? Really what I'm supposed to be doing is subtracting off debt that's only attached to the property and equipment. If they had— say they took out like a, I guess, $10 million line of credit here, I would be subtracting that off here— actually adding it. So that would inflate the UNEP. So it's entirely possible that this UNEP is a little bit misleading if they've been covering their losses with like a line of credit that's not secured by property or anything like that. Okay. Um, so it's good that we have both. You can see their unrestricted net assets that are shrinking. Their total net assets are barely growing. Huge red flags, really. I should be flagging this if it's only grown by that much. Um, operating revenues have decreased by 4%. Again, big red flag. Despite the fact that there's pressure on enrollment right now in a lot of schools, their revenues are still going up because the stock market has been booming, all right? Uh, which means the endowment draws are bigger, and, and that's part of operating revenue. Also, people are being generous with donations, right? Expenses. Okay. Expenses have grown a bit despite the revenues falling. And okay, we got some big losses. Change in net assets from operations lost $7 million in '24, $3 million in '23. Again, we don't have '25 for them. It's not on the clearinghouse yet. So I'll get an update here. But this trend does not look good. So that's a 7% net income loss in '24. Not ideal. CapEx depreciation ratio is incredibly low. Um, again, you're looking for 1 here, so they've been below 1 for at least 5 years in a row, way below 1, which probably means if you're a faculty member here, you're going to see this in not getting new computers, having potentially slow or unreliable uh, networking, degraded parking lots, roofs that leak, windows that don't work, stuff like that. Uh, to keep those things maintained, you really need to have your CapEx to depreciation ratio be above 1, uh, usually every year, but on at least on average above 1, and they're only at 0.3. Uh, to put that into perspective, it means they're only replacing essentially 30% of the capital degradation every year, which really ideally you're replacing all of it and if not more. Um, so that's worth checking. There's probably a lot of deferred maintenance. And it looks like we've also got pressure here, uh, they're pumping up. So these losses are certainly worse, almost certainly worse than what they're showing here because they've taken large endowment draws in '23 and '24. Again, a normal endowment draw is 4.5% of the beginning of year value. So this is significantly higher than that, and that's why it's flagged here, which probably means their endowment is under pressure, probably maybe shrinking or certainly not growing as fast as what would be normal. So remind me to check that, Gary. We'll check the endowment, but we'll start with the net assets. On this unrestricted net assets. So the, the value of this is not, not for me to say, oh, this school's in trouble or whatever, but the first step to recovery for these schools is to come to terms with the fact that things aren't normal, right? A lot of schools, um, you know, you have different pockets of stakeholders in the university that, um, refuse to believe that the school has issues or, uh, just sort of bury their head in the sand. It's really, really important that everybody get on the same page in terms of what's happening at the school. So it can be fixed. Um, and here, here you can see what I'm talking about. Their unrestricted net assets have shrunk significantly, um, since about 20— what is this, 2019?

2019.

Yeah, not ideal. They used to have significantly more unrestricted net assets than their peer set. Now they're almost the same as their peer set. And, and to make it worse, the peer set's not doing great either. Um, so they're falling behind sort of the normal school and country in terms of unrestricted net assets. Um, the UNAP value itself was a bit concerning. I need to check these. So we have negative UNAP here, and then all of a sudden it shoots way up. I'll check this. I don't dare say much about this because there's possibility that's wrong. I'll make a note to check, uh, Valparaiso's data, and I'll fix that. We're continually improving this app and the data quality, but somehow this passed the check. Perhaps it's right, but I'll double-check. But at any event, $22 million in unrestricted— in UNAP means basically, again, liquid net assets that they can cover deficits— is only $20 million. Seems quite low for a school like Valparaiso. So their runway and ability to deal with deficits may not be the greatest, um, which may be why they're pulling from the endowment. Perhaps from restricted endowment funds too, which would not be included in UNEP. Um, okay, so we— let's take a look at the deficits and then I'll go on to— yeah, okay, we've got many years of deficits here. The only year, the only year in the last 10 years or 9 years here that they had a positive net income margin was because the government gave them a lot of That's not ideal. And again, the peer set's not doing well either. Um, so that's why it's important. That's why I don't just have the peer set here. I have the national norms as well. So, uh, sometimes the peer set is not super helpful if you're comparing yourself to a lot of other schools that are struggling. But we got 8 out of 9 years negative net asset growth from operations. Um, and so that's, that's Not good. And that's despite the large endowment draws. So let's take a look. Oops. Let's take a look at how their endowment's growing. Percent change. Yeah.

Oh yeah.

So you can see they were— their endowment was tracking nicely and doing much better than even the peer set and the national median. But 3 years in a row taking big draws probably is what caused this. Now their endowment growth is behind. that peer set. So let's confirm that with the appropriation. Yes, I know they have big appropriations back here too, but they're getting higher again. All right. Yeah. So if I were to work with this school, we would adjust their operating revenues for a normal endowment draw, which is again about 4.5%. And you would see their deficits much bigger than even as were reported on their audit because they're taking this big drop. So, right, there's got to be a sense of urgency here to fix this as soon as possible. All right, so let's try to help them out. Let's take a look at net student revenues first. Wow, okay, down 36% on net student revenues since 2016. That's certainly painful. Um, and despite that, remember their revenue— I think their overall revenue is pretty flat. Let's take a look. Total revenue, yeah, down 17%. Yeah, this school is under a lot of pressure. All right, so revenue is tanking. Um, let's go back to net student revenues. I just want to check a couple things here that are pretty easy to check. The price Price looks okay.

I mean, it's gone down a little bit over those 9 years.

Yeah, this, um, right, they may be responding by discounting more, um, here and reducing that price. So they're significantly underpriced now compared to their peer set. Uh, not ideal. And I would just offer this advice just based on my experience: don't do this.

All right, people think—

don't do this. Go back to a price that's in line with your peer set. Um, because their shrinking enrollment is still happening despite the price being quite low. So that tells you, if you just, you know, go back and correct your policy, whatever, learn from your data, that it probably wasn't a pricing issue that was causing enrollment to fall off. It's something else, right? So try to fix that. There's a lot of things that can happen. Check if you guys are still test optional. Check if you're in the Common App. I've had several clients now that are not on the Common App, and, uh, I think it was killing them. Uh, make sure you don't have any writing requirements or anything like that. No fees to apply. Check if your enroll— admissions team is, uh, well-staffed and is effective. Um, all of those things, right? So it's not related to price here. Uh, so in fact, this price looks a bit low, and usually when it's that way, you can bring it up without losing any enrollment. It's my suspicion here, and you can see the evidence of that. If they reduce the price and enrollment doesn't change off the sort of long-term trends, then bring it back. That was a mistake, uh, different policy, right? That's how you learn from, from these things. All right, so, um, let's go into the expense side and see if we can find some savings for them. Um, I get— I'm gonna start with salaries and wages. All right, when the school's shrinking like this, really important to make sure they keep their payroll and vendor spend and all that in line with their actuals. And they're doing a good job of that. That's great. All right, they've reduced their payroll significantly per, per revenue, keeping it in line. That looks good, actually. Great. W-2 employees paid, that looks normal. Good. All right, let's check the contractor side. All right, so what I just checked there was a payroll, and it looks fine. Yeah, vendor side, again, these are interesting. I usually see a, you know, they don't have a huge deficit though, but, um, they seem to have a good handle on making sure that their big expense items are in line with their revenues. That's good.

It's just the revenue is the issue, it looks like.

Yeah, revenue is shrinking fast. So, um, yeah, I think they need to take a really good look at bringing that net price back up and then figuring out what actually was causing their enrollment to fall. And I just mentioned a bunch of things a moment ago. They're easy checks again. Um, and, you know, little things too, like, um, you know, school's shrinking and yet they still try to stay selective. Um, maybe you can't afford to stay selective and just start admitting a higher percentage of students. These are all policy decisions. There's lots of levers to move the freshman class up and down. So start pulling different levers other than that net price one. But let's see what we got here on advertising. Okay, yeah, that's advertising spend looks high. Take a really good look at that. It's probably a vendor. We'll check that in a moment. But this is above the— this is the top 25% of schools in terms of spending on advertising. And clearly not working.

Clearly not working. Yeah, right, right.

I mean, it's an easy blanket statement, but, um, again, they gotta adjust, right? It looks like the strategy here was just invest a lot in advertising and perhaps reduce net price. I don't think either of those are working out, so there's got to be something else, uh, to look at. So what were the other ones? IT. Um, I'll just go down this list. IT spends per $1 million. That looks normal. So marketing is the big one there. IT insurance per $1 million, normal. Uh, total fees for services per $1 million. Yeah, so they do have an issue with vendor spend, and it could be the advertising contract in here, and there's probably something else. Let's take a look at what that is. So it's not payroll, it's vendors, where there's the opportunity, at least the lower-hanging fruit. Let's go Valparaiso.

All right.

Here we go. This is a normal food service contract. It looks good. Although it's flagged here, it's tiny flag, right? This is— looks good. Housing management. Okay. I don't see that one very often. But this may be worth looking into. Housing management, it's almost $1 million. I would check that. Okay, here's the advertising marketing. This needs a really hard look, right? We're spending $600,000 to this vendor. It's probably not including— usually I think these contracts, when I've talked to them, these contracts don't include the actual ads themselves, um, so like the clicks and all of that. So double check how much all of this is costing and what the ROI is. Again, really a pretty straightforward exercise and double check if it's working. Okay, here's another one that is interesting. Muhammad Alaska Company. Okay, again, never heard of this company. It's $500,000 on student recruitment. Yeah, I don't know that that's working out very well. I mean, I'm trying to be diplomatic here, but Yeah, this needs a deep look. Both of these need a deep look. They're clearly, um, still turning in the wrong direction and investing a ton of money in marketing and recruiting, and, uh, the ROI does not look great for that. All right, yep, free enrollment marketing, that was $1.3 million in 2023. All right, yeah, they switched away from follow to this Muhammad. So it looks like they're trying to do some stuff, different things, but notice they, they brought on more expense when they switched. They went from $332 to nearly $500. All right, so maybe they're already on this, but, um, they, they may find that they can do better by without having these folks around, right? Um, that's one option, certainly. So, uh, I, I, I can leave this to the experts in this field, but I know you can get a better deal than these. I've talked to some vendors that are far, far cheaper than this, and they handle the entire recruitment cycle, and, uh, they have great results. I think one of them is— has turned around. Um, here's a plug for them. I forget the name of the company, but LaSalle— LaSalle's freshman class is like double after they switch to this vendor. I don't know if it's all attributable to them, but Certainly looks like there's a correlation. All right.

Okay.

I'll leave it at that. So lots of stuff to check here. The marketing contract, the enrollment recruitment side contracts. You might consider just doing these kinds of things either in-house option or check other vendors. I highly recommend other vendors. What else do we see? IT was it? Oh, uh, the advertising spend, I guess, is part right there. Yeah, so, um, this may also need a check. $900,000 for housing management, uh, not very common. I double-check if that ROI is there and what it costs to do this compared to an in-house sort of housing management setup. Uh, lots of stuff to do. They may be doing this, but I'm just kind of trying to give them a high-level look at what looks odd. All right, I'll kick it back to you, Gary. Stop share.

And, and so, Matt, you know, we just used, like we always do for the show, we use the Financial Compass, and this is from Perspective Data Science, which is your company. $219. I'll make sure to have a link to purchase that for $219. Join the hundreds of others who've already done it. Um, I think Matt priced that as the same price as you get for subscription to the New York Times. So make your decision: New York Times or data that can help you do all the things that Matt just talked about. But Matt, take a second and talk about your strategic compass, because both Eckerd College and Valparaiso could use this, use that. Talk about how that works, would work for them.

Yeah, yeah. So we work directly with clients, we have a— we work with consulting firms, we have a lot of partner consulting firms. So chances are, actually, if you've hired a big consulting firm, you may have actually worked indirectly through us. But, uh, we also work directly with the schools, and we take a really deep dive. So what you're seeing right here is really high-level analysis. We can go much, much deeper in the strategic compass, and we, we do supplemental analyses. I had a client just submit all of their vendors to me, and then what I do is I match their vendors to my big database on the vendor name first and then match it on the vendor, uh, contract type. Actually, I fill in the contract type using my database, and then I match on the contract type. So really simple analysis, takes really It's really low cost and I can flag all the vendor contracts that they have in their list that are either expensive for that particular vendor on a per-student basis or per-revenue basis, or are expensive for that type of contract on a per-student basis or per-revenue basis, if that makes sense. So basically it saves a ton of time, end up flagging dozens of contracts for the CFO and the executive team to go through and just, hey, start asking questions of these contracts. A lot of times it leads to significant savings that they didn't know existed just by doing a quick benchmark of the vendors. So that's one thing. We do a deep dive on the staffing as well. That's really almost all the money, right? Like most schools spend about 60% on in-house staff salaries, wages, and benefits. And then there's a huge chunk that goes to vendors. That's another 30, 40%. Uh, that's most of your money, right? So, um, you got to make sure you get those— that those two big buckets need to be efficient, right? And at least in line with your revenues. Um, so we do a deep dive on staffing as well, um, at the occupation level and start flagging— similar approach, flagging occupations that have a lot of staff in them more than normal, asking questions about why that is. And helping them right-size their overall staff by targeting these individual occupation groups. Yeah, so it's hugely, it's huge, right? You get everybody with the strategic compass, you get all the big stakeholders, all the stakeholders on campus aligned. Okay, we got a problem. The strategic compass then goes deeper and says, hey, you've got these staff over here that look odd. You've got these contracts over here that look odd. Oh, by the way, if you did make those normal, you would have a balanced budget, right? So it just sort of starts flowing from there, helps the client or the consulting firm that I'm working with develop a strategy to fix the issues, right? And it usually flows out of these abnormalities that we can see on the strategic compass. That's really what it is at a high level.

And then just because I included it in yesterday's weekly financial college financial report, There's also an enrollment simulator. And essentially Matt has developed a tool that you can use 5 different triggers, admissions rate, accepted students, transfer students, and others to actually see what your enrollment would be based on changing these certain parameters. So here's the deal. If you're interested in a conversation, again, drop me a note. I'll include my email address in the show notes, but it's gary@collegeviability.com. And either Matt and/or myself will set up a quick demo show you in detail what it would— what it could look like for your college. Because I'm telling you, what Matt just shared, what I just shared, it's a tool. And this day and age, if you're not using the data, you're, you're not using the comparisons, you're not using the peer groups, you're not using this median, 25th, and 75th percentile— I'll be honest, Matt, feel free to throw something at me— you're making a mistake by not, by not using those kind of data tools. And, and Matt focuses on on college leadership, as do I. But I also have tools coming out and already available for students and families. And this is one that could come out and be finally released this week or next and actually steps students and their families through the entire college decision-making process. And it starts with, is college right for you? You know, we don't assume that college is right for you. And I'll have some demos on this in the coming weeks. We show you how to create your list based on not, not the common things, but in addition to common things, things like, excuse me, admissions rates, graduation rates, and some financial indicators as well. We give you some questions to ask on your campus visit, and then we help you make your decision. And that I'll have available sometime in the next week or two, and I'll make sure that we promo that a lot. So Matt, as we wrap things up today, again, we have two colleges, you know, one with more expense issues, one with more revenue issues. And it's, it's not, Matt, like it's abnormal. We see those patterns almost every single week.

Yeah, no, I gotta say, Valparaiso seems to be doing a pretty good job of keeping their expenses in line. They're reacting, it appears, by switching, um, their recruitment vendor. But, um, to this point, it seems like what they're doing hasn't worked. Um, but hopefully that turns around for them. But yeah, they really need to— I would check, um, I would love to take a deep dive on their whole funnel and see what I can see based on, you know, the hundreds of Strategic Compass we've done. We've done over 170 at this point. I'll tell you, I'm never really shocked at what we find, some weird stuff that's really easy fix in some cases. So I'd be really, uh, curious to build a dashboard for them and see what their— what, what part of the funnel is breaking down, which really helps determine what the right course of action is after that.

Well, Dr. Hendricks, we do this every Tuesday, so we'll look forward to doing that again next Tuesday as well. We'll have two more colleges. And again, if you want to brag on your college and want us to do it on the show, drop us a note. I'll put that on there. We We do have colleges, not often, that present very, very well financially. But if you're concerned and you want to have a resource that you can use to not only look at Matt's and my analysis for your own use, but for others' use as well, we have folks reaching out because they want others to have a resource like the College Financial Health Show to let them see that the college they love, the college they went to, the college their children are going to might be in financial trouble. And of course, Matt, for too many colleges, there's even the issue of viability, and we do talk about that. We'll never, ever, ever say a college will close, but many times you can listen to the words we use and make your own determination about the, about the viability of those colleges. So, for Matt Hendricks, always a pleasure. I'm Gary Stocker with College Viability. We'll be back next week with another show on the College Financial Health Show.