University boards often don't monitor key financial metrics like net tuition revenue per student. Washington's net tuition revenue dropped from $23,000 per student in 2016 to $17,000 in 2024, yet boards stayed complacent because large endowments masked the decline.
Is the board of trustees even seeing a measure like net income margin? And if they are, why are they not reacting to that and insisting on honoring that fiduciary responsibility to balance the budget like you say so many times?
Yeah, I don't know. Um, I think they just get selective statistics in a lot of cases. I mean, I've met with really, really smart board members that worked at banks and other financial— they know how to analyze the health of an institution. In some cases, that's their career. They— but they may be just taking the administration's data and just saying, yeah, great, and not really asking questions, which is a fatal error because they're probably getting cherry-picked numbers, right? Like, you could totally imagine— and I don't know any of this— but Randolph's board meeting might be, hey, enrollment's up, this is great, right? And then just don't look at net tuition revenue per student. Don't look at that. Don't look at the anything else on the balance sheet, right? And if nobody's going to ask questions, this will just go on for years until eventually they start having to sell stuff and then people start asking questions.
And so we looked at the net, the total net assets for both. And let's just talk about Washington. Strong net assets. They're not going anywhere anytime soon. And yet you show that their net tuition revenue per student went from $23,000 and change in 2016 down to $17,000 and change in 2024. They can last a long time, but is it reasonable to have a board mindset that says, "Hey, we're just going to ride this out because we've got the assets to do so"?
I don't think it's reasonable, no, but I mean, it seems like that happens a lot. I think it mostly happens, like I said, just out of people not knowing what's happening. But, you should know, it's really easy to check your trend for net assets. All right, I just showed you that first graph. So if it's going down, start asking questions. And no, it's not normal for a school to be doing that right now. I know there's a lot of negativity in higher ed, but no, the most schools are increasing their net assets. So it's not like, oh, we got to just accept this as the new norm kind of thing. Um, so yeah, I mean, I doubt that a board in their right mind would say, yeah, let's just run this thing into the ground, right? Like, I don't know, maybe, maybe they would, but— all right, or the mindset will outlast everybody else and then, uh, yeah, maybe, but at the end of the day, they're still going to come out the other end with not a lot of runway anymore. Yeah, and other schools are doing quite well. You know, you're competing against them at the other side of whatever is going to happen here over the next few years.
