The College Financial Health Show for January 28, 2025. A financial health and viability review.

Welcome to the College Financial Health Show with Matt Hendricks and Gary Stocker. It is Tuesday, January 28th, 2025. And as always, we've got 3 colleges we'll take a look at today. And who's this for? The College Financial Health Show is for college leaders, for academic leaders, for students and families to some extent, for bondholders and banks. We look at financial data, and that data comes from audited financial statements, IRS Form 990s, and of course from the IPEDS data as well. So welcome to the show. I'm Gary Stonker, founder of College Viability.

And I'm Matt Hendricks, founder of Perspective Data Science. And today we're looking at University of St. Thomas in Minnesota, Viterbo University in Wisconsin, and Linfield University in Oregon. So again, it's sort of sorted the way I'll discuss them in that order. From financially strong to, to least strong. Yeah, I have a— I'll dive a little bit deeper into Linfield, the last school I look at. Their financials certainly look worse to me than the other two. And so I'll go through the first two a little bit quicker and then do a deeper dive and show you the 2024 audit with Linfield and what I see there. So starting with— I'll share the I'll share the Advanced Compass to start here. Looks a little different. I did a bunch of updates yesterday. I'm about to add a lot more data to this. So there's a little bit different tiers now. There's a paid tier and a free tier. So it looks a little different, but still the same stuff here. This is all scraped from audited financial statements. So starting with St. Thomas, University of St. Thomas, I'll just do this. I don't think they have a period in it.

So it doesn't. Yeah, it doesn't. I found that out. Yeah.

So the search can be a little finicky that way, but the University of St. Thomas of Minnesota, actually know this school pretty well. As you may know, I'm from Minnesota and actually went to St. John's University, which is a big rival school to this one as an undergrad. And I interviewed at this school for an econ job when I was first a young economist. So know a bit about this school in St. Paul. And they don't have their 2024 audit data in, at least I haven't scraped it into the database yet, which they should be in here. I just did an update 2 days ago. So unless they submitted their audit in the last couple days, they probably haven't submitted it yet to the Clearinghouse. So I only have up to fiscal year 2024 or '23. And so I don't see, so I'm not really worried about this school. Again, net income margin is the biggest thing. It's like their profit, they had many years of higher than normal profit here and recently struggling a bit, a 3% loss, which is not big really. I mean, that's still well above the 25th percentile, below the median for 2022. And they're back above the median in 2023. This is almost zero net income margin. Not ideal, of course. Ideally, they would be plus 1% or so. That seems to be sort of about where most schools like to hover, right around plus 1% net income margin. But this isn't catastrophic or anything. I think they're fine. It'd be interesting to see what 2024 is. It should be better than this. Most schools are doing better that I'm adding to the database here in '24 than they did in '23. The— yeah, let's, let's go on to looking at— so that's sort of overview of their, their net income, and I don't see anything catastrophic there. But let's just take a look at their revenues and expenses over time. I'll do revenues on the top one, expenses on the bottom. So this is a bit concerning that the revenues aren't growing very fast, growing slower than normal. So the revenues, operating revenues are up since 2016 by 8.8% or so, which may sound pretty good, but it's actually not good. The median school is up 14%. And I think last week we looked at a school right down the street from them. That was up like, uh, crazy percent. Like, I don't remember exact number, but you know, they were right at this top 75th percentile mark. So, um, one question I would have if I worked there, are we losing market share to, um, um, what was that, Concordia, St. Paul, right? Concordia, close, very close. And, um, I'd be a bit concerned about that if I were St. Thomas. Uh, this revenue should be growing faster, but you know, they, they do a good done a good job of keeping their expenses down as well. Their expenses have only grown by 9.5%. That's again, lower than the median. So they're just keeping expenses in line with revenues, which is excellent. Probably indicates good board oversight and just financial management in general at the school. Where, you know, I have problems with schools that will have sort of slow-growing revenue, but just pretend like everything's fine and grow their expenses.

We have seen that a lot.

A lot. Yeah. That's, that is, uh, not ideal again. Uh, so let's take a look at net tuition revenue. It's going to show up here on the bottom graph. You can see one of the reasons there, although this is not all of it, you know, most, a lot of schools have pretty, you know, stagnant net tuition revenue, uh, but have more than compensated by having their endowments grow a lot. Right. And that's supporting their operations. And I'll say one thing about this. I think I've found something now that I think about it. But we'll get to this in a second. Okay. So their net tuition revenue is down almost 5%. That's not good. You know, schools that are— this is a pretty prestigious school. It's one of the better schools in the state of Minnesota. This should not be happening there. Again, I'd be really concerned about this if I were working at St. Thomas or, you know, even if I had a kid there. This shouldn't be happening. The school should be among the top schools in the country in terms of growing net tuition revenue. And it looks like things kind of went south for them here in 2022, and they haven't really recovered. So look for something that changed right in this range between '21 and '22. Something happened where they were above the median, now they're not. But again, they should be well above the median given their prestige. So again, look for a pricing problem. Maybe the price is too high. We've seen that before. That could be what's causing this. Net price, right? Not your sticker price. That's meaningless.

All right.

So net tuition revenue not doing so hot. But their operating revenue is up a bit. Not, not a ton though. So it should be up quite a bit more. I think their endowment's a decent size. So let's take a look at their endowment and see what's happening there. Endowment. Oops. First of all, let's show you their endowment is quite large. It's 2.4 times their expenses. So I mean, that should be— they should be growing their endowment. Their endowment should be growing a lot and their operating revenue should be growing a lot as well. So I think I found what, what's happening here. Take a look at their appropriations. You may have already anticipated this. This is a question that I would ask immediately. Why? So their draws from the endowment are pretty low, um, which is going to be one of the reasons why their operating revenues haven't grown that much. This should be quite a bit higher, uh, at about 4.3% or so. Um, that's a pretty low draw. That's actually pretty close to the 25th percentile. You know, that might be the strategy to try to grow the endowment faster by just appropriating a lower percent. But let's take a look if it actually has grown faster. And it has. So that's good. Their endowment's growing faster than normal just because they're drawing less. But they have deficits now. So an obvious question I would ask if I were the president or CFO is why don't we just draw a normal amount of money from the endowment? That would probably easily close our budget gap and our endowment would grow normally instead of extra fast. It's a little bit nitpicky, but you know, they have that option there. You know, you don't have to fire people and all that. You can just draw.

And we've seen that before. Colleges may very well be making that decision to grow their endowment at the expense of net revenue.

Yeah. Yeah. And I have a problem with that. If they're firing a bunch of people, if they're getting rid of the faculty union saying, no, we got to cut costs, do all this. We got to get rid of half of our programs. Then I question their judgment. If you're going to do all that and when you've got this really simple lever to pull, right, or just you can keep your mission as is, you can continue supporting your staff, keep morale high. All you got to do is pull a normal amount from your endowment and everything should be fine. It seems like an easy choice to me policy-wise. Maybe they just don't know that they have that choice. And that's why I built this app, right? This app makes it clear they have that choice. So I'd encourage them to look at that. Let's see, CapEx, and then we'll move on to the next one. CapEx. So big investments.

Now, while you're bringing that up, for those who are joining us live today, feel free to drop questions in the chat.

Yeah.

Happy to jump into those and we'll answer your questions in the chat. Matt.

Right, right. I mean, I, you know, I can only see what's in the audits and interpret the data relative to other schools in the country. You know, every school has a story as to why these things are happening. Good or, you know, not always the greatest explanation of why things are happening and maybe not an excuse for some of these things to happen. But, you know, this is all about learning from data. And the first step of that is just say, okay, what, how are things existing right now? And then try to figure out why, why are we not drawing, making a normal draw on our endowment? Is it our spending policy? You know, if it's our spending policy, why isn't it normal 5%, which everybody else uses for the most part? You know, those are the kinds of questions that come from this. All right. So I was looking at CapEx here and they made some big investments in their infrastructure in the last few several years. Looks like I'm missing a little bit of data here, but significant investments here. Let's take a look at property. Yeah, their property and equipment is up 43% since 2016. That's about, that's above the 75th percentile. So the school is building out buildings, which you're going to see this with Linfield as well. It's, I suspect the school's not growing, although we're going to see that in your analysis, right? So the question is why, why are they building an infrastructure at such a high rate? You know, this potentially brings more costs and you have fewer students sort of supporting that, right? But their endowment's grown a lot, so they can probably sustain it. But that's something to look at. You don't want to get carried away with building buildings if your school's not growing. All right, I'm going to move on to Viterbo. Viterbo, and start with net income margin. And again, I think that what you're going to see here, and you may, may my initial assessment when I did this a bit ago was that their finances are in worse shape than St. Thomas's. And you can see right away why I say that. This is a big loss in 2022, negative 15% net income margin and negative 4% net income margin in 2023. So 2 years in a row of pretty significant losses here. This one actually much more, much bigger loss than even the closed set. School.

Matt, talk about that red line too.

Yeah, so once again, this red line is 9 schools. The schools are listed here. All of these schools have closed now, um, and they closed in '23 or '24. So I wanted to add them to the graph just to get more context for the numbers. You have the median, you have the 75th percentile, you have the 25th percentile, but still I wanted to make it even more real. Like, what numbers do you want to avoid? And you clearly want to avoid the ones that are in red line. Yeah, you don't want to be worse than the red line. Um, and they were in 2022. So that's, uh, but they've bounced back. That's excellent. It'd be interesting to see. Let's see what happened. How did they bounce back? So there's their revenue and expenses. They did a double whammy, right? You can see we have an increase in revenue. All right. So did something to bring the revenue up a bit, quite a bit, uh, like 7%. And they brought their expenses down a couple of percentage points here, it looks like. So that's, that's good. Um, you know, full, a full strategy is usually going to involve both expense side and revenue side, uh, strategies, but they don't always both work. That's excellent.

Um, but you're always talking about balancing that budget and that's kind of an example of that, right?

Yeah. Yeah. It's not, it's not rocket science, right? It's just a matter of. You know, improving revenues, reducing costs. There's a lot of strategies to do those things, and they, it appears they were successful at doing that, although they still have a deficit here in fiscal year 2023. Again, I don't have this 2024 audit yet. Be interesting to see how they fared in '24. Hopefully they kept this going and are back up to normal here, but maybe the people on the call know. Yeah, so their audit should be out. I don't know why it's not on the clearinghouse yet. Everything was due at the end of December. All right, so I don't think I flagged anything in particular. Let me just show you net tuition revenue. Again, similar to, similar to St. Thomas here, just not great on that tuition revenue. I don't know much about this school. If it's a prestigious school, you definitely should expect to be, you know, well up and above the median. They're below the median in terms of net tuition revenue growth. That's not ideal.

Well, we do know that the higher education market, both on the public and private side in Wisconsin, is a mess.

So I know there's some big winners. See, look at the, well, I guess just by definition, these are going to, there's a massive spread here, right? There's 25% of schools better than this, right? Above, you know, so 1 out of 4 schools growth in net tuition revenue is higher than plus 28%. So there's some massive winners here going on and massive losers, right? There's also 25% of schools even worse than -18%. Ouch.

Ouch.

The, the range in outcomes is amazing. Um, and I really love doing this show because I get to see a lot of these schools that are sort of normal, right? A lot of the schools, frankly, that are buying my services are doing quite well, right? And we're making them even better, which is even sort of contributing to this problem. Really need these schools down here below the median to reach out to us, Gary, so we can help them. We have lots of strategies that are not— there's a lot of them are just sort of common sense, but they may not know that they have those options, right? And we'll make it really clear to them that they have these options and they can sell them to their constituents, sell them to the stakeholders with using the data.

Data-informed decision, right?

Yeah, yeah. And, you know, it's really crucial that you sell it, right? You don't want to— even if you have a great idea, you have to sell it, right? You can't just say, oh, I think we should do this and not really have a reason for it other than, you know, somebody told me to do it. We're very different here. The data will tell you, you know, what the right strategy is going to be most of the time. Um, all right, all right, all right. Endowment. Let me take a look at the endowment. So their endowment is growing normally. 45% growth. Again, that's not something to like cheer really about. That's just normal endowment growth there. And I'm guessing their appropriations are normal. The biggest thing that will affect their endowment draw— other endowment growth is the appropriation. So actually, this is something to flag now that I see this. Their draws are really low. And so there's 3 things to check on your endowment growth, right? One is, are you— how much are you drawing out? Which you see here, and they're not drawing very much. So you'd expect their endowment to grow a lot, right? Assuming the other two variables are normal. So the other two variables are contributions to the endowment, your donations basically, or surplus, budget surpluses going into the quasi-endowment. And then the other one is your return in the market. They need to check both of these because their endowment should be growing faster than that. with a normal contribution and normal market returns. So again, easy things to check. Check what your market return is. Do you have— are your investments underperforming? I suspect they are. Either that or they're just, um, their donor support's not great. Uh, that could be another one. Or yeah, that would be it, right?

We'll look at the actual value of the endowment in my presentation here.

Yeah. So yeah, check. There's something not right with one of those two. Okay, let's check the property, property, plant and equipment. Let's just first see how it's changing over time. Yeah, they're shrinking property, plant and equipment. You always wonder if either they're selling property or they're just not maintaining it. Right. And that's deferred maintenance issues. So if they haven't sold anything, the only other way that the value goes down in this accounting is by depreciation being more than your investment. Let's take a look at CapEx and see if that's the case. Yeah, it looks like we just have 2 years here where they're above 1, and they're not above 1 by a lot, right? Just 2 and 1.5, and then the rest of these are below. So what I, what I mean by 1, this is a ratio of spending on your physical plant, computers, buildings, things like that, relative to the depreciation on those things, right? So if it's below 1, that means that it's depreciating. Faster than you're like reinvesting in your capital stock. That's why you have this decline here. You have a shoot up this year, it shoots up higher and then it declines. It shoots up again here in 2020 and then declines thereafter to now negative. Potential deferred maintenance issues or old computers or both potentially here with a turbo. So a few things to flag there just based on this data, right? Several things to check and maybe some interesting policy options out of really high-level analysis, right? We go much, much deeper when we do a Strategic Compass. All right, let's take a look at Linfield. This is the one that has since was doing the worst. All right, let's start with net income again. So at first, I actually, right before the show, I remembered this isn't terrible, right? Only a negative 3. 4% net income here, but it's a bit deceiving because take a look at how much they took out of their endowment that year. This is a 7% endowment draw. And look at all these draws back here. So big. Again, a normal endowment draw relative to your, your end of year value of your endowment is 4.3%. This is 7%. This one is 9%. So I suspect this is crushing their endowment value. And ultimately, I double-checked this in the audit. This draw right here is about $4 million higher than it should have been. This loss was $2 million, even with that big draw. So really, their budget deficit here on a net income basis, which is they want to get this to plus 1%, right? Even to just get to zero, they're looking at like $6 million deficit here, about a little bit higher than that, actually. So that's a pretty big deficit on their revenue, which is— what was their revenue? I have to— I'll show you in the audit. I don't think it was that big. So, yeah, bigger, bigger issues here than just what you see with the net income number because this is being inflated by a big endowment draw. So let's take a look at their endowment value and What do you suppose is going to happen here?

This thing is not going to be big.

Well, it's doing terrible. Again, up 15.8% may sound okay to most sort of uninformed board members. That's actually terrible, right? The 25th percentile is 36%. Okay. They're like half of that. So this is going to be a huge problem for them going forward because they've become very tuition reliant. Right, while other schools are becoming less and less tuition reliant with their endowments growing so much. Uh, it's really hard to turn that around. So, um, that's not great. And let's take a look at net tuition revenue. It's down almost 12% since 2016. The school is— that's why I say the school's in very rough shape. They're pulling massive amounts of money from their endowments. The net tuition revenues and is, I don't know if I'd say that's freefall, but that's not good. Down almost 12%.

How's your expense revenue balancing out, Matt?

Yeah, let's take a look at operating revenue versus expenses. Bottom graph will be expenses. All right. Okay. So their revenues are flat since 2016, up 1.1%, and expenses are up 2.5%. So this is just stagnation. But again, good job keeping expenses at least kind of in the ballpark of what revenues have done. But that can't be good, right? Like, how they got to reduce staff just to pay everybody, right? So this is probably not a sustainable path forward here. So yeah, not looking great there. Let's take a look. And here's, here's another thing I want to flag on, on this school, their CapEx spending. So you just saw their net tuition revenue is way down. They have budget problems, and there's massive spending going on on capital projects. I did a Google search, and I think these big spends here was a new science building, a pretty expensive new science building at that. So I guess there's questions I would have again if I were a stakeholder at Linfield. Why are we investing all this money in a science building? Do we expect to get some revenue out of that? Because clearly that's going to bring more expenses, right? Having more buildings to maintain and so on.

So you can take a look at that when we do the college majors completion here in a couple of minutes.

Yeah, yeah, yeah. Good. So a couple of things to flag here. So again, they're on their audit. This is the $2 million loss I was talking about and the big draw despite having this 8. $2.3 million, $8.3 million draw from their endowment, right? That is way too big. It should be about $4 million, which is what it was the previous year. Okay. So really this is like $6.2 million loss. All right. That needs to be closed. So that's a pretty big deficit. Some of the reason the deficit increased from one year to— it used to be positive, went to a deficit of $2 million. You can take a look and you just see what happened here. One of the big changes was their this is operation and maintenance of plant. This goes up by what, $1.5 million, $1.6 million in one year? That's about half of this, half of this deficit here. So I suspect this is the new science building coming online, right? You got to pay for electricity, you got to pay to clean it, maintain it, all of that. More maintenance costs. Another thing that happens is their interest expense goes up. To $2.1 million from $1.5 million. So again, that could be just the construction loan or whatever, or, you know, they maybe have variable rates on their interest as well. But so these are things to think about, right? When you build a new building, it's— you got these operating costs that stick with you. And if you're not getting net tuition revenue to go up with it, That's a problem. So you can see their net tuition revenue fell from 2023, $39.6 million to $38.4 million. This is not— I mean, I hope that building the science building would get more students and you'd turn that around, but it looks like so far that has not been the case. But maybe that's the strategy. I'm not sure. But again, this school looks like they're in trouble and they need to turn this around. It's not going to be quick. Right? It's going to be a 4-year process at least to turn around your net tuition revenue. So that's my assessment on those. I'll hand it over to you, Gary.

So a couple questions on that. You showed the net tuition revenue for St. Thomas was still struggling, and you described them as a strong college. So really, it's, it's not just the colleges that are struggling that have financial issues, the colleges that are weak, bad academically. It's the strong ones. That are also struggling financially with net tuition revenue. Is that a reflection of competition no matter the quality?

Yeah, I think so. I think so. As I remember, we looked at Drake. They're a similar school to St. Thomas, like high prestige, uh, WashU in St. Louis. I think what's happening with some of these schools is that their price is not right, right? Like they, um, haven't adjusted their net price down maybe, or maybe they're adjusting it up every year while a lot of their competitors are adjusting down. Right. And they may not be aware of that.

Yeah.

So that will affect your yield rate, even potentially number of apps if, you know, the market catches on to the fact that the net price is high at these schools. But I think that was the case with Drake and some others we looked at this. The yield rate was really low all of a sudden and, you know, their net price had gone up relative to competitors. And so it's a really simple story that you're seeing there. It's really just the market working. Higher price, lower quantity demanded, right?

Yeah. Economics 101. So, one thing that I always like about the Advanced Compass is this comparison. Now, it's not individual colleges, but it's about a set of 1,300 colleges, give or take. So, you've got that 25th, 50th, and 75th percentile. That gives me a basis with which to compare my college, and I'm not just looking at it in isolation. So, that's the Advanced Compass. But talk about what the Strategic Compass does for an individual college.

Yeah, Strategic Compass is really something that's been developed over at least 4 years, probably 5 years. It's really trying to take a really the deepest possible dive we can into the data and benchmarking, not against everybody, benchmarking against a set of schools that is objectively similar to your school using machine learning to find those. And then we just go as deep as we possibly can, right? So we saw some issues here with, for example, with the endowment not growing as fast as it should potentially be growing, given that the low draws at, what school is that? Viterbo?

Viterbo, yeah.

What the strategic compass does is just dive deeper into that. Okay, we can look at all the different elements that can contribute to the growth of the endowment and figure out which one is the problem. It's really easy to see when you have a benchmark study like that, right? Similar with enrollment, like, and net tuition revenue. So there's a lot of reasons your net tuition revenue can fall. The purpose of the strategic compass is to find what reason or reasons is your net tuition falling. There's lots of reasons. Could be your net price, could be your enrollment. And then, you know, if your enrollment's falling, there's a lot of reasons that can be happening. It could be, again, net price, could be, you know, just a loss of international students or something, right? All of these have very different policy implications that we can sort of isolate with that analysis.

And for those watching the show either live or on the recorded version that'll come out later today, we've got some tutorials that we have created on the full set of, of reports, I guess, Matt, that are in the Strategic Compass that will let you take a look at those tutorials and say, hey, how can I use this same data for my college as well? And with that, Matt, I'm going to go ahead and share my screen and we'll take a quick look at the 2024 College, Private College Viability App. The, uh, 2025 version will be out here in the next couple weeks or so. And we always start with enrollment, and we can see the 3 colleges that we have, and each has had enrollment issues. Linfield less so than the others, but you can see over the course of 8 years, 2015 to 2022— the 2025 version will have another year added on to this— down appreciable amount, you know, 600 students at St. Thomas, even though that's only 7%. A little bit larger percentage at Viterbo University. We see this regularly throughout the country, and that's a reflection of what we probably saw in the net tuition revenue. That's probably a reflection of what we saw from the revenue issues associated with those colleges. And then once we look at enrollment for these colleges, we always look at graduation rates. And this is interesting because we have two really strong colleges, and even Viterbo is not that far off. So let's talk about that. Our minimum threshold here at College Viable is 50%. 4-year graduation rate should be at 50%. And both St. Thomas met, as you indicated, and even Linfield with all their financial issues, they're graduating students. God bless them, because that is a rarity. Less than half— for those of you that are new to the show— less than half of colleges in America, both public and private, graduate even half of their students in 4 years. And Viterbo, while not at that 50% threshold— they have been recently— They're closer than many colleges. And Matt, you and I have seen colleges below 30%, and when we see those, you've heard my line: if you can't graduate 3 out of 10, 300 out of 1,000 students in 4 years, you're not even a college. You're not much more than a tuition collection agency. And that's my tender way to offer indictments about folks who can't graduate students. Kind of tying in with what Matt saw, we look at tuition and fee revenue. Matt does net tuition. This is just tuition revenue. It's down $5 million for Linfield. It's down $5 million for Linfield University and down $6 million for St. Thomas. And again, Matt described the financial challenges at Linfield. It reflected that University of St. Thomas, while strong, still seeing that same pressure on tuition because of the market pressures—too many colleges, too many college seats, not enough students—and for all intents and purposes, Viterbo was flat. Over the last 8 reported years. And then we look at a couple other quick indicators. Admissions yield, you know, not awful for these 3. We've seen a lot in the low teens or less. Um, almost all colleges are seeing decreases in their admissions yield. That's the percent of students accepted that actually show up, pay tuition, and attend classes. It's just, again, a reflection and reinforces that tough market, Matt, that really tough market that the higher education is in. Let's take a look at retention. And again, you know, all three, not bad. We've seen a lot worse than that. So they're retaining their students, and yet really it's a matter of degree. All three face their own financial challenges. The University of St. Thomas less than the others, of course. So the College Viability App includes all of these reports, and probably more than that. There'll be more in the 2025 version. But you can use that to compare specific colleges whatever colleges that the user selects. And the last thing I want to do is I want to show the new 2025 college majors completion app. Before I do that, there's a version of this in the Strategic Compass that Matt talked about. You can actually get a comparison similar to this in the Strategic Compass. This one goes a little bit more flexibility, a little bit more, a little bit more depth. Let's just take a look at 2023 data, and I'm just staying in the state of Minnesota. Minnesota, because I want to focus on the good folks at University of St. Thomas. So we can look at all of the bachelor's degrees in the state of Minnesota. Let's just look at accounting. We'll start simple here. So these are all the accounting programs, and we can find University of St. Thomas has about an 8% market share of accounting and accounting-related services and bachelor's degrees in 2023. Okay. We can add— we have both public and private. We could make it just for privates, and you can see that St. Thomas jumps up. We'll add it for all of them, and we can actually select the colleges that we want. I'm not going to do that now. So this is the market share piece. Over here we have a nice colorful pie chart that shows the market share. You can either see the market share reflected here in a sorted version, you can see it graphically represented here with cute colors. You can roll over the top to see which college is which. And to make it easier for presentations, we've even added a bigger version of this. You can click over here to see what a college is. You can also click over here and see what that college is on the right-hand side. So market share is a big deal. How would you use this? Why would you use this? Well, Matt, how many colleges in the last 7 months that we've been doing this show have cut back stuff? Faculty and programs, lots. So if you're a leader, business, academic leader in a college, you're going to want to be able to use something like this to say, hey, where am I strong? You know, these top 5 or 6 right here, pretty strong. And where am I weak in a discipline? This one is accounting. We can look at chemistry as well, same kind of layout. You know, the University of Minnesota, strong chemistry. All right, but I make the argument that if you have a minimal market share— look at these colleges with next to nothing in the market share— why are you in that business? Are you offering the same kind of chemistry— is that what this is? Same kind of chemistry education as these top companies are, with a lot more students than you have? So if I'm a provost And I'm looking at adding programs. I'm looking, hey, hmm, these folks here at St. Cloud and St. Scholastica, St. Benedict, maybe I can find a way to do some revenue sharing with them. Maybe it's online, maybe it's virtual in some form or fashion, but that's the way to look at it. And then the other version of this, again staying in Minnesota, is by college. And I'm going to look at all the majors just to give you a feel. So we're going to look at all the majors that these 60— that these 37 colleges have. There's 86,000 completions. Let's just look at the year 2023 to be consistent. So 20,000 completions for all these majors that we see listed here, for all of the, the sector here, for all the public 4- and private 4-year colleges in the state of Minnesota. So we can look at Oak Hills Christian, we can look at— find a bigger one here— Herzig, we can look at Minneapolis, we can look at the majors they offer and the volume of that. Let's just pick bachelor's. A little bit scattered here. So we can see each of the common majors and what they have here. Let's see the big one, Bethany Lutheran. What we're looking at here at Bethany Lutheran College is all of the majors, bachelor's degree in 2023, and we get a feel for just inside of Bethany Lutheran. They are really, Matt, really heavily reliant on their business administration programs, a little bit less so on communications and psychology, But what happens if a faculty member leaves? What happens if somebody wants to go after that business administration? What happens if they want to lower tuition just for business majors? You can see a college that's too heavily focused on one or two or three majors puts themselves at a risk of having that major picked on by folks using this kind of data. And again, data informs decision. We talked about that when Matt was doing his part of the show. This is a tool that I don't think, Matt, I've seen before. That is, there's a version— this is the executive version for college leadership. There will also be a version for students and families. It won't be as comprehensive, it won't be as many years, won't have market share, but it will show parents that Bethany Lutheran only has 4 music students or 3 students in math. And you got to know, as, as more and more families use that, they're going to think twice about selecting colleges where they want their major to be music or math or education, whatever, if they have small enrollment numbers. So with that, Matt, let's go back and just talk about the College Majors Completion app. What do you think that might be used for, for these colleges?

Oh, well, I mean, like you said, the provost, I mean, they can look at it. I guess the way that I do it in the Strategic Compass is to set it up for a provost to say, hey, this is, this is your psychology program. This is the number of degrees that your school is graduated, and this is what the expected value is, right? You know, if you want to look just like your peers. And so we use, in that tool, use it primarily to identify programs that are either underperforming, or in terms of enrollment relative to expectation, or are missing, right? A lot of times programs are just completely not there, um, that are super popular at all the peer institutions. So you might ask, you know, why, why don't we add those? Um, some of them are really cheap to start, others not so much. Um, so there's, there's this kind of questions that roll out of that analysis. So that's how a provost can use your app. Um, you know, finding those opportunities potentially, or finding, you know, programs that, uh, maybe on life support and may think about eliminating. Um, and then there's the alternative, which I think is useful, very useful in your app, which is there's safety in numbers, right? So if you're picking a major at a school that only has, you know, 1 or 2 graduates per year, that can be a bit risky potentially. So I like that, that use case as well.

And I think I want to do a wrap on that with that because I want to talk about the comparisons. I spoke about that a minute ago and whether it's any of the college viability apps or any, any of the compasses, the free compass, the advanced compass, which has a fee for it. And the Strategic Compass, which is for an individual college, it's the comparisons that matter. Matt, what you and I are doing is giving colleges an opportunity to compare themselves. Yours is a statistically driven peer group, or the college can also choose approximate peer group. I know you do both of those. And mine is really every college that you want to select, whether it's a peer group or just one you want to look at, whether you're a college president, board member, provost, academic leader, or faculty member. Student, political leader, community leader, you get a chance to compare. It's the comparisons, Matt, that matter. And with that, we're going to call a wrap on this episode. Always a pleasure for those that made time to join us live. We appreciate that. The recorded version of this will be out a little bit later today. For Matt Hendricks, I'm Gary Stocker for the College Financial Health Show.