Stetson University and Florida Southern U.: Inside Their Financial Numbers 1-27-26 CFH Show

It is the College Financial Health Show with Matt Hendricks and Gary Stocker, where each week we look at the financial health and even the viability of private colleges throughout the United States. And of course, this is the only show that looks at the audited financial statements, the IRS 990s and some IPEDS data from all— from about 10 years ago, from, from, from most of the colleges that we do. And we, we show the good stuff and we show the not so good stuff. Matt Hendricks, always a pleasure. What are the two colleges we have on the list today?

Uh, we're going to Florida, so we have Stetson University and Florida Southern College.

So probably no snow on their ground today, right?

I don't know, I think Texas got hit, so maybe Florida has some too.

I don't know.

So I'll go straight to the Financial Compass and start with Stetson, Stetson University in Florida. Okay, so again, we have these peers. This peer set is excellent because it has a lot of double confirmed. That's what the DC stands for. That means both schools said that each other were peers. So those are pretty reliable peers usually. We also have double confirmed of double confirmed plus self-report. That means, for example, Drake, that means that Stetson, let's see, Stetson said that Drake was a peer, but Drake did not say they were a peer, but Drake is a double confirmed peer of one other double confirmed peer on here. So there's lots of iterations that happen to build these peer sets. The— so this looks really good. Lots of double confirms in here. So we also changed up the, the menu a little bit, moved the common credit metrics to the top, and then made sure to add this UMAP variable. It looks a little bit intimidating at first, but it's a really important metric to get a sense of how much, how much resource— how much— what a school has for resources to cover operations that may be liquid. Um, because this is one way to think about it is in your— with your personal net worth. I know not very many people keep track of their net worth, but sometimes you'll have to report it to a bank and they might have you subtract off your home equity. Uh, that's what UNEP is. It's your net worth excluding the value of your equity in your house. Okay, so a lot of this will be investment, unrestricted investments and cash. Theory, that's all going to be pretty liquid, should be. But so it gives you a sense of what they can actually use to cover an emergency. So generally you want your UNEP number to be positive and growing faster than inflation. And so it's really important to benchmark that. And that's what we have here with this UNEP variable. You can see right away, Statsing looks good. Yeah, their UNEP is higher than their peer set. $155 million. So this school is not going to be closing anytime soon. Of course, they have resources to fall back on if things go wrong and can sustain itself for probably quite a while. They're doing better than their peers on the UMAP, certainly far better than the median school in the country, which is way down here. They're above the 75th percentile. So this is a quite healthy school in terms of its balance sheet, this metric at least. I'm gonna go straight down to the key metrics table and see what we can see and what we wanna dig closer on. So this just gives a 5-year snapshot for Stetson. No benchmarking here, just kind of values and percentage changes and flagging values that look alarming. So all the things that are flagged here, you usually are gonna wanna pay attention to. So most of these flags are related to a positive or negative value, but some of the flags are set up, for example, CapEx to depreciation. This is not flagged here because it's above 1. Anything below 1 would be flagged. You really, over a 5-year period, your CapEx to depreciation should be above 1. If it's not, indicates that perhaps you're accumulating deferred maintenance or just not Maintaining the campus, which is a red flag.

We see that a lot. We see that a lot, man. A lot of colleges probably have that one flagged.

Yep. This, this flag here is different too. Uh, this is flagged in this case because it's above 4.5%, which is the norm for an endowment draw. Um, so this school, they, uh, sets in, is drawing a lot on their endowments every year, really above the 4.5% sort of norm, and their average over the last 5 years is 5.42%. Not, not crazy, but, uh, certainly higher than normal. So usually what that will mean is that your endowment's not going to grow as fast as peers and as sort of national norms. Um, but their endowment is actually growing, uh, 28% growth in the last 5 years, which sounds like it might be pretty good, but we'll check that. Um, I think I double— I double-checked before we got on the show, and I think there's some interesting stuff to look at there. Yeah, uh, cash-to-debt ratio is decreasing, um, so that could indicate some liquidity issues, but, um, still quite high. Um, and their UNEP was good too and growing, so I'm not super concerned about that. The biggest thing here, I think we have We have some deficits popping up, which may be the reason this, this school is requested, right? They lost $10.5 million from operations in 2023. They lost $14.5 million in 2024. I don't have their '25 audit quite yet. So those are pretty sizable deficits. It's like 8% in '23, 8% of their operating revenue, and 10% of their operating revenue in 2024. So those are sizable deficits. So we'll double check what's causing the deficits and you can see what's happening. They used to not have deficits. Of course, they had $143 million revenue, $141 million in expenses. That's almost perfect. Yeah, I got a +1.5 net income margin there in 2020. But since 2020, what's happened? You can see their expenses have grown substantially, up 11.5%. So they've grown from $141 million to $157. Um, at the same time their expenses are, are, are ramping up, the revenues are flat, right? So revenue is pretty much unchanged. So you've got 11% growth in expenses and flat revenues, uh, which is generating these big deficits now in '23 and '24. So this is sort of the high-level view of what's happening. Um, so let's take a look at the top, starting with their unrestricted net assets, total net assets. Usually when you start running deficits, we should see perhaps we'll see a sort of downturn, underperformance of growth in those net asset numbers in late years, '23 and '24 in particular. But I think, uh, there may be some offsets here that are helping this school out. Yeah, so honestly, I don't see any problems here. This looks excellent. Total net assets are up, and we don't see this— I mean, it's still growing Uh, net assets are still growing in '23 and '24 despite the deficits. And, uh, I think I have an explanation for that. I'll get to you in a second. Um, so this looks really good. Uh, total net assets. Let's look unrestricted net assets, percent change. So yeah, this is where we're going to see some of the tapering off here. And we have a decrease in unrestricted net assets in from '22 to '23, and then also from '23 to '24. So not ideal. So you can see they went from being above the median school to now well below the median school in terms of change in unrestricted net assets. But they're doing better than their peer set. The peer set's actually falling off even worse. And just once again, these are the peers, uh, I know some of these are, um, struggling a bit themselves, so it's not always the best to just compare yourself to a peer set. Ideally, you compare yourself to a peer set that's also doing well and see how you compare to that set. So unrestricted net assets are showing a little bit of the strain that we're seeing with the deficits. Let's take a look at those deficits, net income margin. And this is what we saw in the table. They went from running large surplus in 2022. That was probably because of COVID relief money still. And now, um, they've just taken on a lot of expenses and their revenues are, are not higher. So we've got some losses here and getting worse. So perhaps that's the reason why this was requested, right? Fiscal year '24 was not a good result for them.

And now we've seen that trend, that post-pandemic trend many, many places. They just still haven't recovered yet from that.

Yeah, I don't know. They had a bunch of money come in. Maybe they took on a lot of expenses and hoped for more revenues with those investments, but maybe they just didn't materialize. But yeah, we've got deficits now. That's in. So let's see what we can figure out for them in terms of expense and revenue side policies they might pursue. I'm going to start just first looking at the revenue overall, total operating revenue percentage change. You can see the stagnant revenue here, which is similar with their peer set. Again, this peer set has several— we can see each peer if we go like this, but it gets very messy. Some of the peers are doing fine. Xavier Sanford is excellent. Drake has got decent revenue growth, but there are some others that are lagging here. Valparaiso is a big one. Baldwin-Wallace, Bradley.

We just had them on the show.

Yeah. So some of these schools in this peer set are probably not great to compare yourself to if you want to get guidance on how to balance your budget. So again, that's why it's important to pick a subset that has strong financials and they're out there. I just showed you a bunch. Um, all right, so operating revenues are flat, and we'll show you the expense part. Total operating expenses, percent change, and the growth looks about normal. But again, with revenues being flat, you can't just go— you can't ignore your budget constraint, right? Um, so you have to fit in your budget, and, um, it looks like for the most part they're trying to sort of just continue spending as usual even though revenues are flat. Okay, so that can be problematic and cause these deficits. Alright, so let's get into student revenues. We can talk a little bit about what's happening on the revenue side. Percent change, and you can see Stetson student revenues are underperforming their peer set. They're down 14% since 2016. This is 2016 to 2024. So again, not ideal. This is net tuition revenue plus auxiliary and other revenues. Enterprise revenue. So it looks like they've had some problems with student revenues since about 2020, and far more problems than their peer set has had, actually. So that's what's causing some issues on the revenue side. We can check, dig deeper into what— again, there's two things that can cause student revenues to decrease. One is quantity, number of students, and the other is the price, right? So you have price times quantity is what generates that. So what I'm giving you here is a per-student value of net tuition or net student revenue. So it gives you a decent sense of what's happening with the price. And it honestly looks really stable, $24,630 versus $24,330. So it's pretty much the same price on average as it was in 2016. Not ideal, but that's pretty normal right now. There's a lot of pressure on student, uh, on pricing, price competition. So in real terms, if we adjust for inflation, most schools are cheaper today than they used to be. Yeah, and this is something I think gets lost a lot of times. The, the media coverage and all is just totally wrong. Uh, the real cost of college is decreasing for most schools, and Stetson is one of them, it appears.

That's good for the students, Matt. That's not necessarily good for the colleges.

No, not necessarily good for the colleges at all. So most schools are able to counteract this trend with booming endowment growth, right, where they get more money from their, um, from their endowment draw. Also getting a lot of gift revenue, of course, which ideally would, would exceed inflation pressures and so on. Uh, so it's really important that you make sure you, uh, foster, uh, make sure your assets are growing, right, so you can counteract this trend. Schools that don't have assets, don't have investment income, don't have an endowment, they're sort of at the mercy of this declining, um, you know, sort of a net tuition revenue that they can expect and be competitive. Uh, so flick back to nominal. Um, so honestly, this looks to me like it's probably going to be an enrollment issue. If price is constant and net tuition revenues have fallen, it's got to be quantity, right? So let's take a look at students. I'd expect their student counts, FTE students, to be down substantially, and they are.

There you go.

So 15%, which is exactly what they're down on that student revenues, pretty close, right? So they're experiencing a loss of students, which is odd for Florida school, to be honest. Uh, yeah, I've done many projects for schools in Florida, and usually the issue is that how do we house all these students, right? Like, they're, they're growing like, uh, faster than they feel comfortable with in some cases. So Something's happening where clearly it seems Stetson's losing market share relative to other schools in Florida. So they needed to figure this out. And again, a strategic compass is what can be helpful to understand that. You know, there could be one of your neighbors that's also across that pier that's cheaper or whatever, you know, and they're just doing— they're taking your students and you might not realize it. Had many cases like that working with clients.

You can see that in your strategic compass, right? You can actually—

yeah, yeah, yeah. And you know, it's equally as— you got to watch your own net price, but it's equally as important to watch the net price of everybody else that's sort of competing with you, right? If, if, if they collectively reduce their price and you don't, uh, you're probably going to suffer, and you won't realize what's happening probably until it's far too late. So it's really important to monitor that, and that's included on the Strategic Compass.

And so the folks— and the folks at Stats and University watching this, reach out. The contact information will be in the show notes and on the video, and, and we'll set up a demo. We'll show you what the Strategic Compass could do for you to help you identify why this trend is happening and what you can do about it.

Exactly. Yeah, I've had cases where, um, we do the cross-app analysis by getting the Clearinghouse data. And hey, there's a school right in your backyard that the school wasn't even really, didn't really consider that school a peer, but they're one of their top competitors for undergrads. But this particular school was a doctoral institution, so they didn't really like pay attention to this small undergrad school in their backyard. But it looked like that small undergrad school was stealing a ton of their undergrads, which they weren't aware of. Which I believe was a big factor for them losing undergraduate enrollment because that competitor had reduced its price substantially. So you need to respond to those kinds of changes. That's how the market works. But the market doesn't work very well if the information's not great. So you need to kind of keep an eye on your competitors and respond. Let's move to the expense side. All right. So on the revenue side, it looks losing students, sort of standard issue there. I'm going to start with the big expense items, which is salary, wage, and benefits. This is usually more than half of spending. And you can see an issue here. They're spending about 63% of their operating revenue on salary, wages, and benefits. That's unhealthy generally. The 75th percentile is 61%. The median is 55%. Again, they're at 63%. Their peer set is about normal at 57%. So you want to kind of be in this range of, you know, 50% or so to 60%, sort of where you want to be in terms of how much you're spending on payroll. And they're well above that at 63%. When you get into this range, it's really difficult to balance your budget for one, and simultaneously maintain the plant and pay for everything else on top of of payroll. So this is a clear indicator right away that looks like we have an issue on the staffing side. So again, that can be— it's usually just too many people, and I'll check that right now. But it can also be a combination of too many people and high salaries, or high salaries and the right number of people. So let's double-check. You can see W-2 employees and Honestly, that looks good. W-2 employees looks fine. Um, so it's probably high average compensation that's causing this, uh, just on its face what I can tell right now. Uh, just trying to let the data guide me as to what's happening. So let's check high-paid jobs relative to operating revenue. Yeah, that's really high. Okay, so I have a lot of employees, a big number of employees that are well paid. Make over $100K. And so that's— they're below their peer set, but they're well above the norm there. Let's see what we have for compensation for directors. That looks okay. So you're probably looking at sort of mid-range administrators and faculty that are making high salaries, and you've got a lot of them. Non-officer salaries and wages will pick that up. And we can do this per— yeah, they're very high at the 75th percentile in terms of non-officer salaries and wages. So, um, I think we have a combination of too many people at the high end of the pay scale, and, um, that's causing the salary and benefits to be too high. So we have a staffing issue. Again, Strategic Compass is built really for these kinds of things, to dig deeper, figure out which occupations, where these folks are, And then start asking questions about, you know, what's the right size of number of IT staff? What's the right size, you know, how many full profs should we have versus assistant professors and so on? We start—

that's a different product that we're showing today. This is the Financial Compass, and what Matt is just talking about was the Strategic Compass. It's designed to assess an individual college. The Financial Compass compares 1,300-some-odd private colleges.

Yeah, this is just a really high-level, quick snapshot of what's going on. This really usually motivates, uh, a lot of our clients are buying this and then they see, wow, we look weird on staffing, and then we want to do a deep dive on staffing. And that's the strategic compass. That's sort of the next step. Uh, let's take a look at contractors. That's another big spend item. They're a bit high on the number of contractors paid over $100K, but there's a better metric in here: fees for services. And that honestly, that looks pretty low. So, um, I don't— I think it's mostly a staffing issue for them, um, to get their staffing lined up with what's normal for their revenue and size would be my top recommendation on the expense side. But we have a bunch of other big expense items to look at here. One is IT spends, and check this out, Gary, they're pretty high on IT spends. Normal school spends about $20,000 per $1 million in revenue on IT, and they spend $26,000. So it's well above their peer set. So take a look at IT. So you got staffing, IT, and I marked a few others. I'm not sure if they can do much about this, but their insurance— this could be a Florida thing. Um, is— I mean, not that this is funny, but, uh, I just am struck by this sort of, uh, convexity here in this series.

And you're right though, I bet you're right. I bet it's a Florida thing.

It could be related to storms, uh, hurricane insurance costs and so on. But, uh, I'm gonna get some more bids on this. And this is way higher than the peer set, um, and it's a significant amount of money they're spending on insurance here. It's $4 million. So they used to spend 2, about $1.6 just a few years ago. So that's a significant budget increase. So we have insurance, and I think fundraising was another percent change in fundraising. Um, let's do per $1 million. That's what I meant to do. They're high on fundraising spending as well. So, uh, all of these sort of motivate a deeper dive— deeper dive on staffing, deeper dive on insurance, IT, fundraising— and see what kinds of policies pop out. Usually you'll see some opportunities to save millions of dollars and perhaps balance the budget. Oh, I forgot to mention, remember their endowment is growing despite having, um, so here's their endowment. Their endowment's growing like gangbusters despite having large appropriations. So I didn't want to forget about this, and then we'll go on to the next school. So here are the appropriations, and like I, I showed Their appropriations are quite high. Usually when you have high appropriations, the endowment struggles. But I think what's happening here is we have evidence that they have massive donor support, endowment contributions. I'll do endowment contributions as a percent of the beginning of year endowment value. So we've got years here where they're getting massive gifts for their endowments, um, many, many of these way up near the 75th percentile. If I were to just show you how big these are on a sort of raw value, uh, let's see, contributions in millions. I mean, they've got $14 million in 2022 that went into the endowment, uh, $6 million in '23. So that's offsetting the big draws, I'm, I'm thinking. Uh, so they're getting away with these big draws mostly because the contributions are really high. I think the returns may have also been pretty good, but let's take a look. Investment returns. Yeah, this investment return is pretty good. Uh, this one was terrible. This one was really good. So yeah, I mean, it looks like mostly contributions are what's offsetting those big draws. So that's the answer to that question.

Um, all right, I don't see that very much. We don't see that very much. Draws are big, right?

Right. So, uh, lots of donor support here, it appears, and that's good. And have some budget issues. Looks like the staffing needs to be tweaked and some other big expense items. Um, should we move on?

Let's go to Florida Southern.

Florida Southern College. Again, uh, self-reported peers are SR. We have a double confirms. This is a Florida school. Uh, we have self-reported, a bunch of self-reported. Those are less reliable. Uh, when the other school doesn't say you're a peer and you say they're a peer, it's not as reliable as both saying you're peers. Um, but we'll work with it and see what we get here. Start with the UMAP and percent change. Um, so this, this is not ideal. There are UMAP negatives here, um, which can indicate, like I mentioned, liquidity issues. In a crunch, in a budget crunch, they won't have as much flexibility to cover losses. It's not easy to convert buildings. That's why we take the buildings out of here, this sort of unrestricted net assets excluding your, your, your value of your property, right, that you— your equity in your property. Um, so this school is getting into dangerous territory with a negative here. Um, so let's go down and double-check some of the key things we're going to find here. So yes, they are running some small deficits. And again, this school won't be as flexible in addressing that perhaps as Stetson was, although they do have a ton of unrestricted net assets. They have $165 million, but the problem is that's almost all buildings probably. So that's why the UNEP went negative. All right, so we have some deficits. They're small, small net income margin, and then again, huge endowment draws. And if I remember right, this school also had massive contributions to their endowment. You see their endowment growing despite these huge draws. 19% draw and the endowment still grew a lot. So again, I think there's contributions here that are offsetting that, which is great. Got a lot of donor support, it seems, and we'll double-check that. But the main thing here is that we have we have some small deficits to worry about. I'll check their unrestricted net assets.

It's not that— while you're bringing that up, it's fine to get gifts, but you always have to be prepared. What if those gifts go away for whatever reason?

Yeah, it's one thing to get that consistently versus, you know, going from— I have a client right now actually that went from $1 million to $9 million for unrestricted gifts and still ran a deficit despite that. Um, and so, you know, hopefully they can still get $9 million every year. I don't think they can, but, um, you know, even with that, they're still running a deficit, so they're pretty hard up. But, um, yeah, this, uh, it's really important to get a sense of what's like realistic for your unrestricted gifts, um, what can support operations. And yeah, a one-time fundraising thing may buy you a bit of time, but it's probably not going to sustain you for decades. But the unrestricted net assets here, this looks like normal growth, really in line with their peer set. Looks good. Net assets, if I remember right, this school is growing very fast. So net assets percent change, excellent, up 71%, right in line with the 2025 data too. Yep, yeah, I got 2025 for them. And all right, so their assets look excellent, uh, although the UMAP was, um, concerning. But, um, you know, these schools can get really creative at converting unrestricted net assets into cash. Actually, we just had a call, right, Gary, with a company that buys buildings. Yeah, buy buildings from schools, can convert them to cash for the building, basically buys the building, gives the school cash, and leases it back to the school. So maybe UNEP is, um, not as relevant if you can monetize your assets like that. Um, all right, so I was going to show you the deficits here, which were small. We've got a net assets unrestricted— there we go— net income margin. Yeah, so we have several years here of running these net income deficits, although they're very small except for this one, 9%. It's pretty much break even and then a 3% loss. So the operating budget is a bit out of whack, it seems. Let's take a look at what's happening. So we have revenue. So this year in 2021 was good. They had $92 million in revenue, $91 million in costs. But you can see the problem again is their costs grew by 30% and their revenues grew by 24%. So this school is growing really fast. But the expenses are going faster than the revenues, which is causing these deficits to pop up. Um, so I'm sure their expenses are growing faster than most schools. Similar, so is the revenue. Start with the top total operating revenue percent change. Yeah, it's near the 75th percentile. Revenues are 50%. Excellent. And then expenses, operating expenses change. Problem is their expenses have grown more than that, 50 8%. So, uh, this is a big sort of like classic view of a school that's growing, um, but you got to make sure you keep things under control. It's really easy to start spending a lot of money and build up deficits even though the school's doing really well on the revenue side.

And we see that so many times, so many times.

Yeah, yeah. Let's— so let's see if we can help them, uh, find where the expense side might look. Actually, let me just do a little bit on student revenues first. So this is excellent. School's grown student revenues by 47%. It's one of the best in the country, far better than the peer set that they're self-reporting, right? So that looks great, um, per student. So we have a couple things that are driving their revenue growth for students. One is the price. The price has gone from $22,600 to $29,381 roughly on average. So big increase in the price. And let's see what their enrollment looks like. They might have price and quantity both going up at the same time, which, uh, you know, this could be a good model for Stetson. Stetson's one of the peers that is showing up here. Yeah, Stetson's doing the opposite, right? Their price is stagnant, losing students. This school is growing and growing their price. Uh, yeah, their revenue— or sorry, the enrollment's up 13%. Price is up even more than that in terms of percentage. So it's driving a massive growth in their student revenues. Excellent. Um, so perhaps that's since losing some students to, uh, to, uh, Florida Southern, perhaps. Do a deeper dive on this and figure out what's going on. Um, all right, so let's take a look at the expense side. I'm gonna start with salaries. Benefits. Remember, they are a bit out of control in terms of expenses growing so much. This certainly doesn't look like an issue. They're really low actually on salary. So my guess is we're going to see a high vendor spend for them. So these can be offsetting and they should be offsetting, right? If you're low on internal staff, you should have— probably going to have a lot more vendor spend. And vice versa, when schools run into budget issues, they usually are high on both. Let's take a look at fees for services. And for— actually looks fine the way that is. Let's see if we have number of contractors. So it may not be vendors or employees, which is odd. Let's see, um, do, uh, number of contractors. Contractors paid over $100K.

There you go.

We got a lot of contractors here. Okay, so a couple things that it seems inconsistent with the fees for services. That fees for services comes from the 990s. It doesn't include, um, sometimes it's not including some vendors, uh, because the way it's set up is you've got like IT as a line item, you've got advertising as a line item, you got a lot of these line legal, uh, maintenance and so on. And vendors will be in those items So the total fees for services part is like other vendors that are not included in those other line items. So, okay, well, it looks like it's inconsistent. It perhaps is consistent with having a high vendor spend. So we do have a lot of contractors here. Um, so right away I'd say we need to look at these contractors and see what's going on. That's really explosive growth going from about 29 contractors to 61 over $100K. Few years. So that's probably the budget pressure. And this is what can get carried away, right? I think it's really easy to hire contractors and get carried away on this kind of thing, especially when you're growing. So I would double-check all of the contractors. We do a deep dive on that as well, sort of off the strategic compass. This is an ad hoc analysis that we can do to link you up with all of our audit— our contractor data and get a sense of what schools pay for these different services and flag your contracts that look odd. Just did that for a client last week and flagged a bunch. Um, okay, so contractors looks like a big one. Let's take a look at some others. So advertising, again, contractors could be in advertising, so that looks high. So take a look at advertising spend, both internal and probably contracted out. So I look at that contract closely. IT, they're reporting as zero. That's certainly not right. So fix your 990 report, fix this part that needs to be not zero. I'm sure insurance. So same thing with Florida. Yeah, yeah, same thing with Stetson, right? We have this explosion in insurance costs.

Again, I have to wonder when that becomes a competitive disadvantage colleges in Florida and those high insurance costs, right?

Um, it's very interesting because that's, that's quite the surge, right? We've gone from 1,850,000 to 4.6 million. Significant budget strain there generally. Um, although the school's building buildings and so on, so maybe not apples to apples, but even from going from 2.5 to 4.5 is a big jump. Um, we have insurance and so on. Okay, those are the main things I wanted to flag. I can check, um, some of their vendors. Remember their vendor spend was getting flagged here. Let's double-check this quick. Florida Southern. Okay, here's Florida Southern College's vendor spends, and yeah, right away we can see one That may be the first time I've seen this vendor for food service. Guest Services, Inc. I haven't heard of that one, but that's quite high. $2,400 per FTE on food service is quite high. Remember, sort of the sweet spot median of everybody is about $1,700 per student. So there could be significant savings here, a couple million at least, if they were to put this out for bid. And get more, more bids and go with one that is cheaper, which I'm sure they will find if they do this. Or just get some bids, bring it back to Guest Services Inc. and say, hey, can we get closer to these bids? All right, and then go from there. That might be the way to do it. Um, but yeah, lots of construction going on. Yeah, uh, yeah, here's one, one contract I'm flagging for you, but there are probably dozens others that I can't see. Again, I can only see the top 5 here, so Start with this one though. All right, I'll pass it back to you, Gary.

So when we talk about Stetson, Matt, the— you know, they have some expense issues. And I don't recall, because I watch for these news stories, I don't recall any recent stories about Stetson having layoffs and program cutbacks. But if I'm in that community, um, that would be— for example, you and I are both faculty or former faculty. That's something to be concerned about, right? If they don't get that under control, they may say, hey, to control our revenue and expense— control our expenses, we need to look at cutting back programs, which of course then impacts the number of faculty required. So that's kind of one of the positive outcomes, or one of the outcomes from this kind of discussion, is you can look ahead and say, well, if we don't get these expenses under control, there's, there's going to be some consequences. So something to ponder about that as well. And then I wondered about, um, growing your way out. Now, we saw Florida Southern with some good growth numbers, Stetson less so. What are your thoughts for colleges— what is State Florida— colleges in Florida saying, hey, we're going to grow our way out of expense and revenue issues? What are your thoughts on that?

Yeah, I mean, it can work, but you just got to keep in mind that that's the long play. Um, like, if you do everything right today, invest a bunch of money, uh, to create new 4-year programs just keep in mind that even if everything goes perfectly, you're not going to see a return on that investment for at least— I mean, you don't even get to the new steady state for 4 years. And then to recoup your investment, you're looking at probably another several years. So it's really a long play to do that. And, you know, I think if you're in good financial health, certainly you can make investments to try to grow. But honestly, some of the healthiest schools in the country just don't want to grow, right? They just want to stay the size they are. They want to stay selective. They want to keep offering, doing what they're doing to provide their mission. I don't think the ultimate— somehow some schools thought that their ultimate goal was to grow, which seems like a weird, super weird, um, ultimate goal for a nonprofit.

Um, yes, especially in a, especially in a declining market. Because I know, I've shared many times that the only guarantee you have for starting up anything is startup costs. You don't have any net— any, any materially significant new net revenue is not guaranteed. So start growing in a declining market is—

yeah, it makes sense for a for-profit to grow because, I mean, that's how you make your company worth more money. You know, you can pay more to your investors and so on. But for a nonprofit, growth should be a sort of a secondary, even third item on the list. I mean, you really, it's all about providing the service that is your mission, right? And doing it at a high quality rather than providing that to as many people as possible and perhaps at a lower quality. Seems odd.

So let's take a look at a couple items on Stetson and Florida and for your graduation rates. In particular Florida Southern, Matt, doing an exceptionally strong job with 4-year graduation rates. Stetson way above our bare minimum of 50%. So both doing well in terms of graduation rates. And as you've heard me say many times, that's not always the case. And then I looked at the unfunded institutional grants just as before we started recording the show. And look, really both colleges are, have really increased those unfunded institutional grants. And for those watching the show, that's the fancy way of saying merit aid and most scholarships. So Florida Southern has gone from $30 million up to $55 million, Stetson from $70 million up to $93 million. So both have increased that, and you saw the consequences on Matt's part of the show. Um, it's more challenging for Stetson than for Florida Southern University. So just a couple things to think about. And then finally, this is the first time we've shown this, Matt, and this is the 2026 version. It's the working version, it's not ready yet. The college majors completion app. We have 150 majors. I'm gonna show one of those here in a second. We have 2,700+ public 2- and 4-year colleges and 4-year nonprofit colleges. And since 2020, 11 million+ completions across associate, bachelor's, and master's degree programs for those 2,700 colleges. I'm gonna grab animal science. And I'm going to grab bachelor levels. And what we're looking at here is these are the animal science majors, bachelor's level animal science for these colleges. There are 101 colleges that offer that one major, 34,000 completions over the, over the 5 years reported. And we'll just go to the average number. I'll scroll all the way over the average 5-year number and look at the strong performers. If you're looking at animal science, you know, Iowa State, Oklahoma State, Kansas State, Texas Tech, you would expect that. Those are the kind of geographies. But where am I going next, Matt?

Oh, where am I going? I don't know, actually.

Where am I going next? I'm going to the lower normal majors, right?

Oh yeah, I was gonna say econ at first. I was like, no, don't pick on econ.

No, not today. So look at these, look at these by comparison, right? And you can pick whatever number you want. I go below 15 or below. Look at all these colleges that have much smaller numbers of animal science, granted a relatively specific major. Can these low enrollment majors, and you can see the colleges over here on the left-hand side, Stetson happens to be one of them, I just saw that. Can they compete with the colleges who have multiples of students in those programs? And so Matt, as you know, there's going to be an, a college version of this, an academic leadership version of this, which is essentially what you're seeing now. And there's going to be a student and family version, which won't have as much data. But if you're a student or family member and you see that a college that you want your child or you want to study animal science at averages 7 students per year, and you're looking at another one that averages 55 students per year, man, it's, it's not that tough of a decision to decide which one probably has the stronger program. And how many times have you and I talked about Moneyball? We're in— you and I are living, maybe in some ways leading, the Moneyball era of higher education where there's data out there. You just saw Matt's data. You know where it comes from. He comes, he pulls it from automated financial statements. He pulls it from 990s. Matt, nobody else that I'm aware of does that. I pull my stuff from iPads. Others pull it, but not in the specific college-by-college level that Matt and I focus on. And Matt, you've heard me say, and I know I say this a lot on my media, generalizations, which is most of the research, don't do any particular good for colleges in trouble, for their faculty, staff, and communities, nor their students. It's, Matt, what you and I do that focuses on both the good, like we had today, really Stetson and Florida Southern, they're not going anywhere, they have issues to address, but it's, we've had many colleges where we had tenderly and gingerly and lovingly said, eh, be careful. This is a college that I would be careful about sending my children to. And that data is important, and Matt, it will become increasingly important because there are way too many colleges and there are not enough students willing to fill those college seats. So, Dr. Hendricks, I suggest we do this again next Tuesday.

Nope.

Like we do every time to watch the College Financial Health Show with Matt Hendricks and Gary Stocker. We'll be back next week with two more colleges. Until then, take care.