The College Financial Health Show for February 4, 2025. A financial health and viability review.

It's Tuesday, so it must be time for the weekly College Financial Health Show, where we look at the financial health and operations of private colleges throughout the United States. This data comes from audited financial statements, from IPEDS data, and from the IRS Form 990s. And each week we compare 2 to 3 colleges. We find some that are financially healthy, We find some that are on the line, and we find some that have some challenges. Welcome. Hi, my name is Gary Stocker, founder of College Viability.

Hey, I'm Matt Hendricks, founder of Perspective Data Science. Uh, today we're going to take you through 3 colleges again. Uh, we have Barnard College in New York, Benedictine University in Illinois, and Luther College in Iowa. I'm going to start with the one that looks strongest financially, actually quite strong financially. Bernard, and there's a lot of things to really love about their finances, and I'll show you those first. Then probably the worst out of the three, in my opinion, is Benedictine. I said that they have 5 straight years of net income losses and they don't have a very long runway as well. So I'll show you why I believe that, and you can draw your own conclusions. And then Luther College in Iowa, similar with the 5 straight losses, 5 straight years of losses, but they have a much longer runway with a $200 million endowment almost with a decent amount of it unrestricted as well. So that's what we're looking at today. One good and two not so great. One that has a pretty short runway. I'm going to start with the good and I'll share the Advanced Financial Compass first here. If you haven't visited this site, there's a lot of stuff in here that's free, but we do have a paid tier now and I'm Showing you the paid tier, but basically the only difference between the paid tier and the free tier is the variables that are available to you. And I've reorganized the variables so that they're sort of laid out the same way that an audit is, so it's easier to find where things are and understand how they're calculated. But in the free version, there's a— I think all of these statement of activities variables are available, including your net income margin, which is super important to get the conversation started at your school if you have financial problems, it will definitely show up here in net income margin, almost guaranteed, unless they're, they're sort of disguising it by taking massive draws from the endowment, which I believe is not in the free version. But you can see if your endowment's not growing very well, which is in the free tier, you probably have issues with big draws on your endowment.

All right.

So let's start with Barnard. And the easiest way to find a school is just to search the name. There's Barnard, and I'm going to start with their net income margins. Um, now I said I, I like this school a lot. This is not one of the things that I like. Um, these are all negative net income margins, minus 5, 6% almost, minus 9, minus 9, plus a little bit, the COVID relief probably helped there, and then minus 10. So you're probably wondering, what the heck, why, Matt, are you liking this school? The reason is pretty simple. Although they're not balancing their budget, take a look at their operating revenues. Operating revenue is up 56%. Take a look at their net tuition revenue.

That's since 2016, right, Matt?

Yeah, since 2016. Net tuition revenue is up 128%. That's the best I've ever seen. So this school is not like— low on money. They have a ton of money and they're growing really fast. So this is probably a classic case where the expenses are just growing faster than revenues a bit.

That's what I was going to say. I haven't looked at this college, but I'm guessing the next thing you show us is expenses.

Yeah, I'll show you the expenses. So it's like, you know, a professional basketball player can have losses, right? And credit card debt, but it's not like, you know, sort of by choice, easy to fix, right? Easy for me to say, but you know, you can fix it. So that's their situation here. Their revenues are up 56%, operating revenue, but their expenses grew much faster. They just probably are getting a bit carried away with the spending that, you know, if you're on the board, make sure you're looking at this. You don't want this to get out of control here. The school's growing and doing well with revenue, but you got to keep the revenue revenues and expenses in line. So expenses are up 67%, and that's why you're getting those negative net income margins.

Again, you like those expenses to be about what variation from the revenues?

It should move pretty much one for one. Um, and you want to keep a positive net income margin, right? So you just keep that buffer of about 1% is normal. And I'll show you that again here. I always say that it's not like I made this up. For, you know, many, many years. This is 2016, '17, '18, '19, '20, when things were just kind of coasting along nicely for higher ed. Everybody seemed to, or the median school turned in about a +1% net income margin almost every year. And then a big one when COVID hit. Actually, COVID was very good for net income margins initially, right? But some of those some of the effects of COVID are being still felt today, right? The first, remember when a tiny class comes into your school, they stick around for maybe 4 or 5 years. So it's going to affect your revenues for the next 4 or 5 years. So that's what sort of what we're seeing here. We had this big bump and then now smaller net income margins. And that probably I would anticipate this is going to be low for a couple more years, perhaps. We'll see.

And Matt, before you step through the lines you have on there, what they mean for those who are joining us live, the chat is open if you have questions for Matt or myself. During today's show, drop them in the chat and I will interrupt Matt or Matt will interrupt me and we'll be happy to answer them for you. Yeah, sure.

Yeah. And of course, draw your own conclusions. I have my opinions, of course, and I'm happy to share them and I do all the time. But, you know, some of the stuff I say is subjective, but it's all based on comparisons to what is normal. And Barnard, for all their strengths, is not normal to be putting in negative net incomes 5 straight years here. Almost 5, slightly positive in 2023.

And for new listeners, what are those 4 lines, reference lines that you have, Matt?

Yeah, this is the 25th percentile, which they're right at, which means 75% of the schools in the country are posting better net income margin than is Barnard in 2023. All right. So this is a very poor result for them. And so they should get back up here, right back up to positive 1%, ideally. And that's crucial. That positive 1% is crucial just to make sure you have enough cash for one, but you also are covering your depreciation expenses, maintenance, all that. You don't want to have deferred maintenance or you don't have to borrow to fix the roof on buildings, right? That should be all money coming in to support that loss of capital every year.

All right. And the red line won't come into play for this college, but what does that red line mean?

Yeah, this red line is a close set. This is a close— 9 colleges that closed in 2023 and 2024. Again, this is just a reference. I just picked them out and put them in here just to get a sense of what it looks like to be a school that's struggling. And not surprised they look, you know, about at the 25th percentile all the time and then far worse right before they closed. Right. So yeah, this is the key indicator, net income margin. This is in the free tier. So make sure you check that out for your school. If you see Lines that are below the median like this blue, even at Barnard, this is a problem, needs to be fixed.

All right.

Okay, so there's lots to like though, and I don't— certainly no chance that the school will close. And, you know, they have massive revenue growth. Let me show you their endowment. They probably have a massive endowment, and the way to see that is the ratio of their endowment value to expenses. Yeah, it's a really big endowment, 1.8 times their expenses. Um, let's take a look at how it's growing. Oops, that's the wrong one. Um, change since 2016. So their endowment has grown since 2016, about 63%. And so I want to make you aware, uh, and I will highlight this in the next school as well, but there's a lot of ways that the endowment can grow, right? There's a few ways. One is contributions, and I just want you to be aware that I have these in here now. Um, so there's contributions to the endowment that happen every year, and I have that as to normalize everything. I have it as as a percent of operating expenses. And you can see they must have massive donor support. I mean, this is, these are really big contributions relative to their expenses, which is probably why they have a really big endowment as well. But these are really big contributions. So that certainly would contribute to a high growth rate for their endowment. The other way that the endowment is impacted is by investment returns. And you can see there's a really tight band for every school in the country. The reason is you can't really control your investment returns, right? Don't listen to anybody Wall Street.

You can't.

All right. It's a very rare event where somebody can beat the market over and over again. And you just see that here. There's just not a lot of variation. But take a look at Barnard. They do appear to have good returns. Yeah. In 2022, that was an excellent year for them. Even though they lost money, they did far better than the median. And same in 2021. But again, they were low in 2020. And a bit low in '23. So over time, you can beat the market once, right? But it's pretty tough. So there's not a lot. I mean, if you look terrible here, then you definitely have a problem. But if you're sort of keeping in there in that range, that's time to change investment. Yeah. The biggest thing probably that will affect this is this is all going to be net the fees, right? You could have an outstanding investor, but if they're taking 3% fee, 2% fee, that's going to basically cancel out any benefit that they're giving you. Okay, so off of the investment advice, let's go to not investment advice. Okay, let's go. The biggest thing also that you can control is your appropriations, and you can see their appropriations are Really good. Uh, just a bit, a bit higher than normal, but again, they had big contributions and decent returns, and that gives you this 62% return on your endowment, which is better than normal.

And many times, Matt, we see colleges in trouble drawing a lot of that endowment down. Yeah, we're going to see negative impacts.

You're going to see that with the next two, I believe, both. Um, one other thing, this school appears to be growing quite a bit, or at least building infrastructure. So in the statement of cash flow— sorry, cash flow You can see CapEx, and this is excellent. You want your CapEx to be above 1.

Nice.

Your CapEx to depreciation ratio to be above 1 virtually every year, which means they're at least replacing the stuff that's wearing out, right? So ideally they'd be replacing computers that are old, right? Replacing pavement, all that stuff. They probably built some buildings here. That's why you see this big spike, but these are probably normal years here. 1.3. 2.0, 1.6 is perfect. All right.

Again, we don't see that very much. We don't see that above 1 very much.

I mean, everything's great. They just probably got a bit carried away with the spending. Um, they might need to taper that back, but it's, you know, it's not going to be painful for them. The school is rich and getting richer, it appears.

Yeah. Yeah.

Um, okay. Which is sadly the case for a lot of the schools that, uh, I get hired to work for, right? They're already rich. I really, and I think you agree, Gary, I'd really prefer to work with the schools that really need help just to survive, right?

And to those colleges, you know, that see this show live, to look at the recorded versions, you know, don't wait too long. And I'm not the only one sharing that guidance. Don't wait until the last dollars, Matt, are circling the financial drain. You want to reach out for guidance when you've got some resources that you can leverage to fix whatever options there are. And I'll take this time to talk about, uh, Perspective Data Sciences Strategic Compass. It's a resource that you can use to look in depth, not just at your college, but at a peer set of colleges. And we've got videos on that out there. Um, reach out to me at gary@collegeviability.com if you want a private demo of that product. It's a tool you can use to look at your policies. And your business practices and compare it to a peer group, man.

Yeah. And usually we usually find, or always, I wouldn't say usually, it's been every time. One of my biggest fears coming into this industry is that, oh, I'd make one of my tools and I wouldn't find anything interesting. I tell you, I've made over 100 now. Never been the case. I always find something that even the admin, um, at those institutions hadn't really thought about, right? And it's worth a lot. Right. And, and on top of that, having the analytics there that's interactive and can be shared with anybody at your institution, you can easily build stakeholder buy-in, which is absolutely crucial in higher ed. You can't really get anything done unless everybody sort of— most people, I'll say not everybody, most people agree that that's the correct policy and it's got support.

And if you want to see that, you go to YouTube and search for College Viability, and there's a playlist called Strategic Compass tutorials, and you'll see how it could work for the sample college that we used, and the same kind of data would be available for yours. Uh, Matt customizes it and we do the report for you, and there's lots more details behind it. But College Viability channel on YouTube, and there's a playlist for the Strategic Compass tutorial. Yep.

All right, I'm gonna— I'll, I'll pick up the pace a bit here. So here's Benedictine, and again, 5 years, as I mentioned before, 5 years straight of net income losses. And again, not ideal. Not, I mean, not as bad as these closed schools right at the end of their lives, but this is something you can't sustain forever. And just to give you a sense of where this is headed, let me just show you why they're making losses here. Let me just show you revenues and expenses again side by side. There's revenue and expenses. All right. So revenues are down 38% since 2016. And that is worse than the closed schools, by the way. So this is a pretty dramatic change in revenue.

And the trend— look at the trend, Matt. That's—

you know, I actually, I really respect the schools that are like this because I've seen so many, Gary, where their revenues look like this and they just keep going like normal on the expense side. It's just completely absurd. But at least they're trying, right? This school is— revenues are down 38%. Expenses are down 36%. That's pretty close to one-for-one move, right? I mean, The problem is they got to get the revenues back up. All right.

Obviously in a very competitive market, they have to do that.

They're quite good at budgeting, actually. I mean, that's, that's great to move that much and to move your expenses with that. Believe it or not, I've had lots of schools argue, oh, we can't move expenses. Those are all fixed. They're all fixed. You know, it's, it's just ridiculous. Um, very little expenses in higher ed are fixed. I'll actually argue, um, even your tenured faculty lines are not fixed.

Trust me, it may be no fun.

I was on the other side of that. Yeah, they're not fixed. Um, okay, so, um, net tuition revenue. Let's take a look at that. That's the big reason why, or one big reason why the revenues are down so much. This is catastrophic change in net tuition revenue here. It's down 46% since 2016. It's even more shocking to look that they were actually up quite a bit in 2018, '19. I mean, this is, this is, uh, my guess again based on how the dynamics of all of this works. Gary, when do you think they had a problem with their enrollment funnel?

Um, probably around 2017, '18, '19.

Yeah, it probably happened here, 2018. The problem with a lot of schools is they are looking at, oh, what did we do last year and just got to do better than that. They actually need to go back to 2018 and this is where it and went off the rails. And once it goes off the rails, it does that, you know, for 4 straight years, 5 years. And it probably— things went off the rails in 2018. And you need to look back at what happened then.

And Matt, all the time when I, when I do my Monday, all the time when I do my Monday podcast, This Week in College Viability, and there's some announcement of a college cutting something, it's almost always this kind of case. At what point did they not see that the trend was downward? The expense trend was upward. Colleges, again, if you're listening to this on live or the recorded version, if you haven't acted now, you're probably almost waiting too long.

Yeah. Well, I'll just give you one example that's concrete. Early in my career, I saw a school that looked just like this, that tuition revenue for, you know, exactly that trend and noticed, you know, I had a sense of the dynamics just being an econ person. You know, we'd study systems like this all the time that sort of build momentum like that. and take several years to get to a new steady state. Anyway, I found the problem. I think they lost half of their applications 5 years prior and nothing else happened in their, their yield rate was the same. Everything else is the same. So basically what happens is that incoming freshman class in 2015 was half the size of the freshman class or the class. Yeah, the freshman class that would have come in the year before. And about half the size of the class that graduated that year, right? So what that means is over a 5-year span, you're going to lose basically half of your enrollment, right? Initially you don't, you lose like a, what, a quarter?

A quarter, give or take, yeah.

Uh, or not even that, like 12% of your enrollment. And that's going to happen for 5 straight years until you get to half of your enrollment being gone. Um, and I brought this up, I was asking what, what did you, what happened in 2015 to lose half your applications? They had no idea. I was talking to the enrollment people. Ouch. Ouch. Ouch. So you got to look back further, okay, than what you're potentially thinking. That's the moral of that story.

And again, tracking applications is one of the functions in the College Strategic Compass.

Okay. Anyway, we're taking longer.

Surely we digress.

This is fun. All right. So let me talk about, let me just give you the punchline on Benedictine. I don't think they have a very long runway to fix their problem here. And the reason is, let's take a look. I'll just show you their endowment. 1st. Um, so you see their nosedive in the endowment here. Um, that's happened because of two things. There's massive draws on the endowment to get— they took over $9 million, I believe, $8.5 million from their endowment, which is only a $40 million endowment in 2024. Let me make sure I have those numbers right. $10 million, Yeah, I believe it was $8 million they took. I didn't write it down, I guess, but that's not going to last long. Let me just show you the audit so I make sure I get all the numbers correct. Yeah, here's their draw. They took $8.2 million out of their endowment, the unrestricted portion of their endowment. It started at $16 million. They basically took half of their unrestricted endowment and dedicated it to operations in 2024. Which is obviously, how many years can they do that? They can only—

this could be their last year.

Yeah, one more time. Yeah, so that's what I'm talking about, the runway. Um, this looks pretty catastrophic if this was actually the way it looks in their statement of activities. It looks like they needed this to just basically balance the budget in 2024 because they lost like $5 million in net tuition revenue in just one year. Um, So this looks catastrophic to me. And again, the runway may be just a couple of years if the, if this is the path we're on to do this kind of draw just to make ends meet. So once this unrestricted money is out, they have other options. But these, they're not great. You have to either go to your donors and ask them if you can unrestrict this money to use it. And that would probably best case scenario, they get that money released, which is what, another 20, 5 million. So maybe they get a couple more years out of that at this trajectory. So basically the bottom line is I'm saying this is a very short runway if they don't get this fixed very quickly. It's not, not much time here. Let me just show you how catastrophic the net tuition revenue change was at the top here. And you can see it all in my app too, but I just wanted to make sure I get exactly the same numbers here. So here's the net tuition revenue in 2020. 2024. Wait, sorry. That's yeah, 2024. Um, $37 million about. And then here's the net tuition revenue in 2023. Yes, it's over $5 million, just one year drop. Um, so that's catastrophic. Let me, so here's another. Yeah, this is catastrophic. They went from $12 million in gifts. To $2 million in gifts.

You know, man, I'm trying to recall. I'm going to look after the show. I've not seen any news stories about Benedictine with cutbacks or layoffs or anything. Have you?

I don't know. I mean, if they haven't, they're going to hear soon, it looks like.

Yeah, I'm going to check on that afterwards.

So yeah, this needs to be fixed immediately. They don't, like I said, have a very long runway. Um, and things get pretty hairy once that unrestricted endowment fund is gone. Uh, you're talking about asking donors to flip, you're asking the Attorney General to let you take loans out of that and that all of that stuff is pretty difficult and embarrassing.

Never a good thing.

Yeah.

Okay.

So that's Benedictine. If you work there, if you're an alumni, get involved. Luther, Luther College in Iowa. Okay. The story with them is similar, although they have a much longer runway. So it's not quite as urgent in their case, although quite urgent still. But not as much as Benedictine. So again, 5 years losses, 1, 2, 3, 4, 5. I don't have 2024, but, um, you know, looking at the trend here, it doesn't look like it. Hopefully they get this fixed. They got to get this fixed soon. Although they do have a longer runway. Um, their operating revenues are down. They're not as bad as the previous case though. Down 16%. If I remember right, Benedictine was much more, right?

I think so. Yeah. Look at the closed college line. Yeah.

They're right at where the Many cases they're below that. Yeah, it's not good, you know, and it's, it's just that this is the point of this app, just to put everything in perspective. You know, schools that have these catastrophic finances, somehow they, um, will convince themselves that it's normal or, um, that, you know, they're just, it's just all these headwinds in, in general and higher ed. It's not the case. You don't look like a normal college when you have these numbers. Uh, expenses are basically unchanged. So let me put this side by side. So this is on the board here. All right, so the board needs to fix this. They're down 16%, 17% on operating revenues, and expenses are, are flat.

Flat.

Yeah, that was what I was talking about. This irritates me more than anything, um, because it can't— I've heard every excuse, believe me. You can fix this. You just have to do it. Um, and the way to find out where to fix it is to build something like I have. It doesn't have to be my exact tool, but my tool will show you exactly where the spending is weird. And that's probably where you need to cut. Um, and for example, you know, for example, on the revenue side, right?

So yeah, for example, you know, that strategic compass again, I know I'm plugging a lot because I use it a lot. I see it a lot. It will drill down on expense, on, on salaries, on compensation. For full-time faculty, for full-time staff, for part-time faculty and staff. You can see how you compare to both a statistical group that Matt creates, and if you want your own proximate peer group, if you'd like. And so, when you look at this, if you're a college leader, board member, even faculty leader, it's the comparison that matters. And Matt said this earlier in the show, it's the comparison that matters. If you're only looking at your data, trust me, you're making a big mistake.

Yeah, so, so right. Um, I will say that generally it's far more important to have the number of staff correct than it is to necessarily have the pay correct.

All right.

I can show you the math behind that, but it's way more important to have the number correct than it is the salaries. In fact, the salaries, in my opinion, the best combination for, um, and I'm a labor economist, by the way, I've studied this quite a bit. The best combination is to have slightly higher than normal salaries and slightly lower than normal numbers, and your payroll costs will be less and your Staff will be in theory more motivated and happier to be working at your institution and more productive in theory as well. Anyway, so here's the deal with Luther. Their endowment's shrinking a bit here. I think the reason for that is they had some maybe lower than normal returns. Let me just double check that. Yeah, this is a bad year for returns. I would check that. Most schools were getting like a 7% return. On investment in 2023, and this one was only 1%. So I would— again, that's the board finance committee needs to check that immediately. Ask the investment people what the heck happened that year. Maybe they already know. So that's why their endowment has kind of shrunk a little bit there. But here's the deal, though. Bottom line is they have a much longer— they have a much longer runway. Look at how big their endowment is relative to their expenses.

2.8.

It's actually bigger than Barnard's relative to their expenses. So I did some math here. They have an almost $200 million endowment. $24 million of it is unrestricted and their net income loss was $3.6 million. So you just do the math here. They can do $8 million every year for a long time and their unrestricted funds will cover that for a while. And then they have on top of that another $150 million or so, $170 million, yeah, $160 million of restricted endowment funds, which, you know, again, there's options to convert that to unrestricted, not ideal, but can be done. So they have a long runway, unlike Benedictine, in my opinion. But that's it for today, Gary. I'll pass it back to you.

So, okay, Matt, we've done, we're closing in on 60 or 70 colleges we've reviewed since we started this back in August of last year. And in my mind, the ratio of financially healthy colleges is about 1 in 4. You comfortable with that?

Yeah, I haven't really made that calculation, but, um, just based on when looking at that, like net income on my data, like the median school tends to be about right. It looks so I would say maybe half of schools are doing okay, but, or, or more in terms of that net income metric.

But yeah, about half are kind of like we saw with Luther Benedictine today. And let's take a look at these 3 colleges. And this is the 2024 Private College Viability App. The 2024 version, as Gary continues to plug things today, had 30 reports. The 2025 version that will be out any day now is going to have almost 70 reports included in it. Some are similar to what you see from Matt, some are different than what you see from Matt's apps. And we start with enrollment, and we're going to look at the enrollment trends. We're looking right here for Luther, down 700 students over the time period 2015 to 2022. The 25 app will be 2016 to 2023. And you can see that 2 of the 3 significant losses, 30% and 40%. And not surprisingly, Matt, Bernard is up 30%, up 700 students. We always then like to go to graduation rates because, Matt, as I've shared before, I believe, I believe we pay colleges, you and I, and even those going today, to graduate their students. And, and the set of 3 here kind of caught my attention. Um, because most of the time you hear me rant and rave about how low this percentage is. But look at Bernard, look at Luther— really, really, really strong in terms of graduation rates by comparison. Benedictine— and maybe this is part of their problem— they're not even graduating 4 in 10 students in 4 years. We've seen a lot worse, Matt, but 40% is not a good number. I make the case, if you can't even graduate half of your students in 4 years you're not much more than a coin toss college. And even you've heard me say, man, if you can't graduate even 30%, and there's some that do that, I make the case you're not even a college, you're more of a tuition collection agency. One of the interesting things I heard about in talking to you was that at Benedictine they had, um, significant decreases in their net tuition revenue. So I want to look at something called the institutional grants, or unfunded institutional grants, and I've got them broken into categories. These are funded So, this would be the Matt Hendricks Economic Scholarship. Matt donates $1 million. They use the revenue from that to pay scholarships for tuition. And we can see Bernard, $12 million, not exceptional but not bad. Luther, interestingly, pretty good number. Benedictine, that's not even couch money in terms of colleges. But that's not really what I'm going to focus on. I want to look at the 8-year trend of something called unfunded institutional grants. You and I call those merit aid. We call those most scholarships. They're just unfunded, the same kind of discounts that you get for a car, clothes, food, all those kind of things. Let's look at Bernard. It's up. They've given up about $4 million more in institutional aid. Matt, they can afford it, right?

Yeah, and again, their net tuition's higher, so our net tuition revenue is going up.

So yeah, and you'll note that Matt complimented the folks at Benedictine for balancing their budget for the most part, even though it's in a really downward trend. And we see that here. They have lowered their, their merit aid, their scholarship funds, from $33 million to $30 million, down $3 million over the last 8 reported years. We don't see that much. And in my mind, that's a reflection of a college that recognizes they're in trouble and trying to find a way to do that. Well, if I'm going to looking for a college for my child or for myself, and another college offers me a better merit aid package— and they can just make this stuff up for the most part— I'm going to select that college. So we often see a relationship if colleges lower the amount of unfunded institutional aid, merit aid, their enrollment tends to plummet also. And Luther, really flat for the most part, 8 years. They've gone up a little bit, but nothing, nothing to worry about. Probably the best of the 3 in terms of managing a little bit, but they're in the same kind of category as Bernard. And then we always like to look at something that reflects more specifically what Matt talked about with the Advanced Compass. I'm looking at the tuition fee changes for those last 8 years. And again, Matt, I love it when we find strong colleges. And in the last 8 years, Bernard has managed to grow their tuition fee revenue $54 million. You can see the challenges that both Benedictine and Luther are facing. Their, their revenue— and Matt showed this in his charts— is down. It's down substantially. If I, if I scroll over a little bit we can see it's down 30% and 40% respectively for those two colleges. It's unsustainable, different timeframes, Matt. It's unsustainable for different timeframes if you can't turn that around in some form or fashion. Your comments on that?

Yeah, like I said, it's all about, I mean, clearly unsustainable, but it's just a question of how long can they go this way? How long is their runway to get it turned around? And I think we're going to focus on that more, Gary, right? Like we see a lot of unsustainable situations, but some are far more urgent than others. And clearly Benedictine is quite urgent in this case.

And then Matt referenced the endowment as a percentage of expenses. I've got the actual endowment value. And again, we've got the bottom down here, the end of the year for those 8 years. Scroll over tomorrow a little bit. So we can see that Bernard is at almost half a billion. Luther's at $200 million. This is as of 2021, 2022. And look at the growth. This is empty for Benedictine. They didn't have values reported in there in a couple of years, and that's always— that's never a good indication if they're not reporting the values. And the last couple things I want to look at before we look at majors is admissions yield. And again, for those new to the program, this is for those— this is the number of students that a college accepts that actually shows up, pay tuition, goes to classes. Bernard is a highly selective school in some regards because they— 66% of those students who get an offer of admissions from Barnard accepted. And you can see those numbers aren't nearly that high for either Benedictine or Luther. Draw your own conclusions from that. And then percent admitted, just very quickly show that one. Percent admitted, again, is a reflection of selectivity. And we can see that, look what happened to Barnard. They have become much, much more selective in the number of students they admit. A lot of colleges would not like to see this down 11%. Matt, I'm guessing Barnard says, "Mission accomplished." because that's probably—

yeah, well, a lot of schools want to try to make themselves look a lot more selective than they really are. Yeah, it's not good. In fact, the Department of Ed had to scold schools for incorrectly reporting their application numbers.

And Luther, pretty common. But here's, here's concern again, another reason to be concerned about Benedictine. Look what's happened from 2017 when they decided to start reporting the data. They admitted 62%. In 2022, the last data reported for this app, was 93%. Matt, we've seen this before. Colleges in trouble accept anybody and everybody irrespective of their preparation and academic capacity to do college work. And we know that's going to be reflected in increased dropout rates, and we're going to see that reflected in lower graduation rates in the coming years as well. So having done that, let's bring up then what we offer— have offered for the last couple of months, another component that is new through College Viability. And this is the actual 2025 College Majors Completion App. And I've got it set up for our 3 colleges, and I'll show you that here in a second. But what this does is track 63 common majors across associate, master's, and graduate— associate, bachelor's, and master's programs for about 2,500 2- and 4-year public and 4-year private colleges. So I've got our 3 colleges set up. Let me go here. And what we're looking at, we've got all 3 of our colleges. There's Luther, there's Bernard, there's Benedictine. You can collapse them if you want to. and we can see in this version— this is by college— all of the 63 programs. You don't capture all of them, we just capture the ones we think are the most common. We can look at this and see what percent of any individual program is to a college. So music in 2022, 2020, I was 20% of all the graduate major bachelor of science program bachelor programs at Benedictine. It went down to 14% in 2023. You can see those changes. Biology went up a little bit. What you want to look at here is to make sure these colleges are not so heavily invested in 1 or 2 or 3 majors at the expense of others. Luther's on the borderline of mine. It's a subjective call, that's a subjective call on my part. They're a little heavy down here. You'd like to see more distribution. But the other argument that I make with these colleges looking to lower expenses, what are they doing with such low enrollment courses? We see that at Luther. Bernard, we see a little bit of that as well. Bernard again, you know, they're heavy on economics. It must be a high— I've never seen that before, Matt— a high economics. Maybe that's where you got your bachelor's from, Matt?

No.

Okay, again, they probably dominate. I'm guessing they dominate in that, in that market, and maybe across the country. That's just a really strong number, really sharp, really strong share for that college. They've got some decent distribution. And then Benedictine, the same, same thing. But what I really want to show is the major. So I've got our 3 colleges, and I've got where I've selected accounting and accounting-related services. Let's just grab biology. And this is market share for just these 3 colleges. I'm going to give a better example here in a second, Matt. And we can see that in biology, for these 3 colleges, it's not a particularly practical application. Bernard has 8%, Benedictine has 53%, uh, has, yeah, 53%, and Luther 37%. Let's make this more applicable. Let's clear all the filters. And let's just go to a state. Let's go to Iowa. We'll pick on Luther. I'm gonna go to Iowa. I'm gonna keep bachelor's degrees. I'm gonna look at just the privates in Iowa. And let me just select a small subset. So Luther's gonna be one of them. Let's look at Luther, Loras, Iowa Wesleyan's closed, Grinnell's high-end, Grandview and Grayson, they're all close together. Okay, so these are all of the majors. These are the colleges that have those majors. And this is the market share of this set of, what, 5 colleges? Of 5 colleges in Iowa for that major. It's reflected here in a simple pie chart. We can actually grow in that, make it a little bit easier to view if you want to do it for presentation. And we can see by clicking on the cell, Grinnell has 6% all the way around. Okay, I've not seen an app that actually calculates and shows market share for majors. And even with that, the other graphic that we have on there is we can— it's a little more flexible than this— is these are those 4 colleges. We can check different majors. We've got communications up. Let's scroll down here and grab math. All right, so we can see, you know, 3 of the 4 play in math. It looks like, um, Graceland does not play in math at all. And we can see the trend, and we can see at the top it looks Grinnell 29, 12, 30, 14. You got to wonder what's going on with that. We can look at publics as well. We can select colleges. We can select a different set of colleges if we want. Let's just grab one more major. Let's go down to the bottom. Let's look at— Matt, pick one for me.

Uh, statistics.

So, oh, you, you would pick statistics?

Yeah.

All right, only one. Oh man, only one of the three offers that. That was a terrible choice.

Oh, they probably are rolling it in. Well, the econ maybe. Yeah.

So social work, and again, you can see the patterns and trends. Uh, Loris is growing their volume a little bit. Both Grayson and Grandview, their volume is shrinking a little bit. This is comparison. And Matt, this gets us back to that point where it's the comparison that matters. And again, if that's the theme of this show, even more than some of the other shows we've done, Matt, you got to do the comparisons. You can't look at this in isolation, Matt.

Yep, yep. And I, I think A lot of schools have the idea that they need to compare over time, but even that is flawed. You need to compare also in the dimension across peers, right? Because if you're over time and you're always weird, you're never going to know that you're weird if you're just looking over time. You have to compare yourself to everyone else. And it's really simple. If you look weird, figure out why, right? Maybe it's nothing. Maybe you're doing the accounting wrong, or maybe you have a serious policy problem. All right, and it's usually that case, to be honest.

So, and you know, I guess again, since this is Plug Gary this, this week, you're welcome to do the work yourself, but Matt and I have both invested about 5 years each in getting to the point where we are to do this. And Matt, many of the colleges we see don't have the resources and don't have the time to develop the kind of tools that you and I have created for a variety of reasons.

Yeah, I mean, there's schools that don't have institutional research at all. Or they have like a part-time faculty member do random things. Um, if you're one of those schools, definitely reach out to us. You need this information. And if you do have an institutional research department, ask them to do this. They may, they probably can't do it. I know that's been the response, but, uh, from the clients I've worked with, well-resourced schools, they don't have IR that can make the tools that we've built for, been developing over 5 years period, really specialized tools.

Um, So for Matt Hendricks, I'm Gary Stocker. Thanks for making time to watch the show. We are always grateful. We'll be back next week with another Tuesday episode of the College Financial Health Report. We'll talk to you then.