The College Financial Health Show for March 25, 2025. College financial health and viability review.

It is not Tuesday, it is Monday, March 24th. Hey, it's time again early this week for the College Financial Health Show with Matt Hendricks and Gary Stocker. And it's data, it's data from colleges themselves, whether it's audited financial statements or Form 990s or IPEDS data. We take it We make it easy to use, we make it easy to use comparisons. And this week, this week in particular, we've got a new table. It's called the vendor table, and Dr. Hendricks will spend some time talking about that. I'm Gary Stocker, founder of College Viability.

Hey, I'm Matt Hendricks, founder of Perspective Data Science. Yeah, as Gary mentioned, I'm going to take you through some new features on the Advanced Financial Compass that we use for every show. Um, I'm going to do something a little bit different. We have, uh, right before we came on the air, um, I got an alert from Simpson College in Iowa, which is a school we just did last week. And it's very interesting. They present— I'll show you. Let me just show you first. The posting was a PowerPoint of their— this is a PowerPoint from their presentation to their bondholders. And the reason I want to present this is just like, it's good. It's very good, right? It sort of builds confidence in that I think they're on the right track here based on what we showed last week. So there's a couple of things that are really crucial couple in here. One is, if you remember from the last show, we flagged one thing we flagged for this school was that staffing didn't look right. It looked high relative to the size of the school. And this is one of their slides, and the conclusion of their slide is exactly what we recommended, right, Gary? That right-sizing the staff looks like an appropriate strategy, that it appears high relative to the FTE enrollment. And we flagged that on the Advanced Compass app. And put that out there. Since last week, I've added a new feature on the— maybe I'll do that first and then show you what their slide was. Let's go back to Simpson College here in Iowa. There it is. Here's the new— actually, don't need to put that in there. Here's Simpson College in Iowa. And these are the— this is the new feature that Gary just mentioned. What this is showing is all of the top 5 vendor contracts for the last 3 years. Some schools don't have 2024 990s in the IRS system yet. I'll be updating this regularly, but so you can see Simpson. And the key thing to look for in this table, just find your school in here and then look if there's any color on any of the contracts. I added this color feature to indicate contracts that appear higher than normal, given the size of the school in terms of FTE enrollment. The type of contract that it is, and the amount of revenue that the school has. So any color here indicates that it's higher than the median for that contract type and for that school size in terms of either FTE or revenue. And you can see a few contracts here are flagged. In 2022, 3 are flagged, and 3 of these contracts, or 2 of the 3 that are flagged, are maintenance contracts. You see facilities management, two of them for some reason, totaling over $3.6 million. Both of those are very high, um, and they have two, so it's really interesting what's happening there. And then you can see in 2023, those same contracts are here, but they're for some reason labeled campus services now instead of maintenance. But those are clearly maintenance, and I confirmed that with somebody that actually worked there. Um, so both of these, again, maintenance contracts, and they're very big. 3.7 million or so. And again, they should be flagged here, but again, since they flagged them campus services, I don't even benchmark that because it's really vague what that is. But facilities management contracts, they're really high. So the reason I bring this up is that, again, what this tool is saying is that the maintenance cost might be an issue, and the issue may be both of these contracts, right? Probably should just have one of these contracts And that one contract is still higher than normal for the school size. So looking at significant overspend potentially on a maintenance contractor. And let me just go back to their slide.

And Matt, while you're doing that, one of the things we talked about before the show started was the comparisons and context. And again, context may be an issue here, but the comparison is what matters. If you're, if you're lying outside of those standard deviation color codes you have, that's at least something to look at, Matt.

Yeah. And so this is the interesting thing. Like, we just did this show last week, right? And then this report just came out today. I don't know when they did the call. I mean, I, I'm not sure if they watched the show, but there's a, there's a possibility that they did and, or, or they're just on top of it, which is great. But that's the point, right? They probably saw, wow, we got these two vendor contracts. Our maintenance cost looks higher than normal. And they're doing— you can see right here, they're doing their own benchmarking. They say the industry average for maintenance spend is between 0.5% and 1.5% of the current building replacement value. That's not a number I can see, but I can see how the value of the buildings, so we can kind of get close to that. And then they said our maintenance costs are $4.5 million. And as I just told you, nearly all of that is those two contracts, right? It appears. And so that's on the top end of the industry standard. They don't say exactly what this percent is, but I'd bet it's above that top end, perhaps substantially, because again, those contracts— you got two of those contracts, really should only have one, and it should be lower potentially. But anyway, the reason I'm bringing this up is it's again showing how this benchmarking can be really useful to identify issues like this. So we can identify it in the data, get your additional context, which their CFO obviously did here and dug into it. It's like, yeah, this Maintenance cost looks high. And so what are they going to do? They set a policy here where they're going to reduce their maintenance costs significantly. They're going to go to below 1%, right? It's going to be a significant reduction in their maintenance spend, which is excellent. That's probably what they needed to do along with the right-sizing the staff. They seem to be on the right track.

And you heard it here first, right, Matt, on the College Financial Health Show. Yeah.

So I just love it when that happens because, you know, it validates what we do. And, you know, if they, if they would have this tool a couple years ago, they probably would have been able to flag that a couple years ago, right? I mean, you could have flagged it back in 2022 right here. So that was, well, I somehow went to a different, that was just released. By the way, if you're wondering how I got that, I set an alert for that school after our show last time because Clearly, as I mentioned in the show, I think they're in serious financial stress and I wanted to watch them and see how this is going to develop. And that looks like a very positive development there. All right. So on to today's normal programming. The normal programming for today is Simpson University, not Simpson College. There's a different Simpson. Simpson University in California. We're going to take a look at them. Let me just reset this so that goes back to the default view here.

And Matt, while you're doing that, for those joining us live, the chat is open. If you have questions, comments, or concerns for any of the stuff we go over, feel free to put it in the chat and we will jump in and address those for you.

Yeah. Okay. So Simpson University, Cornell College in Iowa, St. Norbert University in Wisconsin. So definitely stick around to see— there's really interesting things happening at St. Norbert that I want to discuss and make sure you stick around for that. Even if you're not involved, there's a lot to learn. About potentially that case. So a lot, a lot to get to, starting with Simpson University. Let's take a look first at what we always do, which is the net income for this school. We have to actually have many years of negative net income here for Simpson, and including the last 2 years, this is probably the COVID funding bump here for these 2 years. So really looks unsustainable, right, in terms of net income. I want to also flag their endowment growth. Again, this is that by default these are populating, so you can see their endowment growth since 2016 is only up 13%. Again, that may sound good, but it's terrible. A normal endowment's growing upwards of 60% since then. So very, very slow endowment growth. I can, tell them what to flag here based on the data. It looks like their returns to me are not looking right in California. All right. I was going to show you the endowment returns, so they should check this endowment returns. I think these were low, but I think also if I— let me double-check this first. Yeah, their endowment is really, really small, so it's probably not going to be very— not going to have a lot of consequence anyway if they were to fix this. $7 million endowment, it's probably not even worth worrying about the returns there. Yeah. Okay, so let's see the— so here's the thing with this school, they have negative net income, but I believe their net cash from operating, if I remember right, is positive. Yeah, so we have positive, positive, and if we were to rescale that net income, net cash margin, Sorry, I'm going really fast just to make sure I get all this content in, but I've been using this for a while now, right, Gary? So yeah, we got positive cash flow from operating activities. So what— so basically what this means is the school's net income is negative, which means it's not generating enough revenue to cover all of its costs. Well, some of the costs in there are not cash expenses like depreciation, for example. You don't necessarily pay that this year or even next year or even 5 years from now, but eventually do have to pay it. So you, it's being accrued as an expense every year. And that's, that explains what's happening here. They have a positive net cash because we're taking out depreciation basically is the story here. So what this means long run is the school is generating enough cash to pay its immediate bills, but it's not generating enough cash to cover potentially maintenance costs down the road, depreciation expenses, which these are, you know, the buildings falling apart. We just had to replace a whole bunch of shingles on our house that would be included in depreciation. Right.

Replacing computers, new software. Yeah.

Replacing computers that get old software, stuff like that. So long story short, I would say that, you know, they're on a financial path that's unsustainable, but a very long runway. Right. This can last for a long time. As long as the cash— they're able to pay payroll. That's when things go really poorly is when that cash goes negative. I was going to show a few things here that some other options I think they can look at to sort of balance their budget. I'm going to show you a few things. So one is this one is total employees per student FTE. And so I think what you see here is pretty obvious, right? They have Lots. Done a lot, it looks like, to bring their staffing in line with the size of their student body, but there's still more work to be done, to be frank here. They're at, they're much higher than the median still on number of employees per student.

That solid line is the median, right, Matt?

Yep, the solid line's the median. Exactly. Right. So ideally you would get close to the median here, but I know there's variation based on where you are in the region. If you're living, if your school's in California, which this one is, it really needs to be below the median, to be honest, right? Because you have much, much higher wages there. So ideally, it would be below the median. You don't want to have the same number of staff as a school that pays half as much in salary.

All right.

The other thing I was going to show, employees per operating revenue, just showing the same idea, employees per million in operating revenue. Again, they've done a good job of getting this back in line. But still not quite where it needs to be. It appears a bit high still. So that, that could be an option to, to fix that. Let me show you the vendor spend. Again, that same table down here, Simpson University. To find your school, just simply start typing the name. And remember, there's a Simpson College and a Simpson University, right? This school has very, very low vendor usage. I think they only have 3 contractors. That's why I'm only seeing 3 per year here. See, 3 for 2022, 3 for 2023. I think that's right. Um, I'd have to double-check. There was one that had very, very low. But anyway, a couple things to flag here. Um, one is, of course, you see the landscaping contract looks a bit high. Again, you're looking for color here. Um, double-check that, right? I would just— it's a really simple thing to do. Just price shop the landscaping contract, see if you can find a better deal from other vendor or just ask your vendor to do less, right? Maybe we don't need to have beautiful gardens if we're having budget issues, right?

All colleges have beautiful gardens, man.

Yeah. I mean, it is only $263K, but we're talking about a pretty small school here, small budget deficit on actual value basis. So you can reduce that by, you know, you know, get this back to the median. You're maybe saving almost $100K potentially. I don't have to do the math there, but there's a possibility. And then there's another thing here. We don't see a contract that's usually in here, and that's the food service vendor. Anytime I don't see a school having a food service vendor, it's very interesting because it means that they're either not providing food service or they're doing an internal kind of food service setup. And so there's lots of questions around that. A lot of times, not always, but a lot of times the internal food service is not going to be as high quality. It's going to cost a lot more money. There's a lot of economies of scale, we call it, with the vendors that do this nationwide. They have big networks of food suppliers and they've been, they're, they're pros at this, right? Whereas individual university probably is not having as many advantages associated with scale. All right, so I'd look into that. So look at the staffing, look at the food service setup. Maybe they just don't have food service But if they have internal, they might check into a vendor and then use this table to find a vendor that is getting you about where you need to be in terms of amount per FTE, amount per revenue. Any questions on that, Gary? Should I go on to the next one?

Matt, let's move on, sir.

All right, let's do it. Here's Cornell College in Iowa, and this one was confusing to me at first. You see these oscillating net incomes. I've never seen that before. And it's like, what in the world is happening here? Is my AI going crazy? Remember, the AI is what extracts the data, and it turns out the AI's got that totally right. But there's a weird thing happening with their net assets released. They have massive swings in net assets released. And so what is that? That's usually what it is, is either endowment, restricted endowment funds or restricted gifts that are being released. Which means either the time constraint or the purpose constraint restriction on the donation or the, yeah, the donation has been met so they can release that money and it's going to build the building or it's going to the scholarship or whatever it was restricted for. Usually this is really smooth, right? But it's not here. You can see these massive swings. That's $37.6 million down to $19 million. We go from $40 million down to $20 million.

And then we saw that last week, I think, with St. Ambrose had a lot of swing. And somebody dropped me a note online and said, hey, they had a gift, which makes perfect sense. Context matters. But again, this kind of information gives you perspective and comparisons to ask the question why, Matt.

Yeah, right. So I mean, it may not be really super important about their financial health, but I'm curious why that swings around so much. There could be a weird restriction on funds, or I'm not sure. I've never seen that before, to be honest. But so here's the thing with the bottom line. What matters here is what— so I try to smooth this out and you can kind of do it visually, right? If you smooth this out, you can see that the net incomes are positive. So you got plus 17. That's a percentage. Let me do it in millions. Change in net income. Okay. So plus $10.7 million minus $5.6 million. So just these 2 years, you're plus $5 million, right? We have negative 5, plus 12, negative 5, plus 7. So you can see what I'm saying. If you just smooth this out, it's positive. So that's good. The school looks to be in good shape financially when you smooth that out. But again, I have questions about why it's so volatile, and that must be stressful for their CFO, I'd imagine, but, or the board. I'm not sure what's all going on there. Um, but anyway, so consistent, it almost looks like it's planned that way though. Yeah. Yeah. There's got to be some kind of— I did dig deeper into it. Um, it looks like they have, which is another question. They have these releases. So they put a $9 million release and a $24 million release and then a $5 million and then an $18 million. And then there's this, a lot of it's for capital projects, which is really confusing because that shouldn't be included in operating revenue. I don't think anyway. So I'm not sure if the, the if the accounting is correct on that. But again, those are things you can ask, right? And I'd ask your CFO. Faculty Senate might want to ask and make sure that everybody understands what's happening with these net incomes and why that's doing that. I'm not worried about this school though. Like I said, when you smooth this out, looks good. Operating revenues, I believe, are up quite a bit. Operating, unrestricted operating revenues.

Yeah.

Again, smooth this out again. I'm not sure this should be in the operating revenue, but anyway, that's what they have.

And check out the endowment draw for me.

Yeah. Let's see the endowment.

See if that matches the same kind of irregular.

Yeah. This endowment is not growing super fast. Um, about the draw, it's a bit slow, but let's take a look at appropriations. Yeah, similar. So some of that money's coming from the endowment, looks like.

Sure enough.

Yeah, it's really odd. Anyway, it's probably an easy explanation, but something that the board and the faculty and all the staff should really know about because, you know, you look at one year's audit, you're going to see two years, but there might be massive negative numbers which scare the— scare people, right? So make sure that people understand what's happening with that. Their net tuition revenue looks flat, enrollments up. Yeah, they— so the reason their endowment, yeah, is growing a bit slow appears to be related to these big draws here. Right. They're much more normal now. Right. The last 3 years. So they've fixed that.

I guess, Matt, for those joining us live and those that will watch the recorded version later on, all this data comes from the audited financial statements that these colleges submit. Again, like we said in the opening, We just make it easy to do the comparisons.

Yeah. So similar story with this school. If they want to cut costs, I mean, it looks like the most obvious place to cut is here. Again, really high number of staff per FTE, just like we saw with Simpson in Iowa. This is Cornell College in Iowa, right? I think they actually may be pretty close to each other. So that's a pretty high number of staff per FTE. We can look at it relative to—

that was above the 75th percentile line there.

Yeah, it's above 75th percentile. So we can do the same thing for relative to revenue, that looks better. The school does pretty well on revenue, but again, you've got this oscillation here, really odd. But relative to the size of the student body, it's pretty high number of staff. So they could look— I would look into that for sure. Definitely commission a compensation study and just right-size the staff if it looks out of line. One thing that's interesting is while the number is high, you can also see the number of employees paid over $100K per FTE, and that's actually a bit low.

Yeah.

So there's a possibility here that they have a, they have like a death spiral. I, I call it, I'm a labor economist by training, and this is like the worst case scenario where you have too many people and you can't afford to pay everybody market wages, so you pay 'em all less than market wages. So you end up with a really big staff and they're all like upset, low morale, right?

That's the point.

Most inefficient way to run your payroll, to be honest. The most efficient, in my opinion, would be have fewer staff and pay them all far above normal.

You have highly motivated, highly high morale, efficient, or at least close to that median number.

Yeah, they might look into their contractors too, paid over $100K. This appears to be getting out of line.

Right.

There's a surge in vendors here. And about the 75th percentile relative to size. I'd double-check those new contracts. We can check some of them down here again. This is Cornell, not University. Big difference. Cornell College. Yes.

Okay. Yeah, look at that.

Actually, yeah, I'm remembering now. I just made a Facebook post about this. So you see all the color here. This is really, really important to cross-check these vendors. Again, if they want to cut costs, there's some easy ones here. Bon Appetit is a very expensive food service vendor, probably the most expensive just based on the work that I've done to see like what they typically charge versus what other vendors charge. And you can see the flag here. You're paying about $3,600 per student, $3,400 depending on the year per student for food service. That's quite high. More than 1.5 standard deviations above the median. It's very, very high. So you can get that down to like $2,000 per student. If you do the math, you're talking millions of dollars potentially in savings or over a million. So that's a big contract to look at. Another one is the janitorial here, similar to the other school we talked about, like maintenance, janitorial work. It's really simple. Just go out and get some bids on this and see if you get a better bid. And if you do, see if your current vendor will price match. If not, maybe switch to a new vendor. Really easy stuff here. EAB typically charges a lot of money. This is $1 million for enrollment consulting. And there's a question mark whether the value is there. But even bigger question mark because there's a lot of other competitors in this space that might provide just as much or more value for a lot less. So I double-check on all of those. And you can see a lot of different enrollment vendors in here that you could price shop with, right? It's a million-dollar contract, $700K contract. Make sure those are both competitive and match the size of your school, which it clearly doesn't in this case, higher than the median per FTE. All right, so I double-check those things. Yeah, any— I think I'll move on to the next one then. So I hope you guys appreciate the focus on providing, you know, potential Things to look into, potential solutions there, opportunities. And I think every school we talked about so far, we've shown them some paths forward. Let's go to St. Norbert. I think they say Saint. I'm just going to type Norbert. All right. All right, let me go back to net income margin here. All right, this is the one I said stick around for because there's a lot of interesting things here. So again, uh, just looking at net income margin, this is, uh, this is pretty poor. 1, 2, 3, 1 positive year, um, 2 positive years out of 9, and then a positive year in 2024. Again, net income is the key metric here. Um, it's the difference between your operating revenue and operating expenses, right, divided by your operating revenue. So just to rescale it so everybody's on the same one. But a positive number is absolutely crucial. A positive number means that you're covering all of your expenses with your operating revenue, which is excellent. And you can see that they are in 2024, their fiscal year 2024, they went from a massive loss of 14.6% negative. I mean, that's close to the close set, right?

Yeah.

Um, so I gotta say, this is excellent, right? Going from a negative 14.6% deficit to a positive, almost normal 1% positive net income is excellent. So how did they do it? Uh, let's show you. And how they did it is actually informative because I see a lot of rhetoric about this that is, um, I always suspect is not true. It isn't. Um, you can see what they did here on the expense side. They went from $82 million to $72 million in one year. That's a $10 million drop in spending, and that's 12% cut out of total spending in one year. All right. I'm not saying that that's a good idea, but that is a massive cut, right? And I see a lot of posts about, oh, you can't, it's not possible to cut that much. Or here you go, here's an example. That's 12% out of the budget in one year. And again, that's very, very aggressive. And I guess you can question whether you'd want to do it that quickly, but I mean, I, I think that's great. What, why the per student on that one?

Can you show the per student on that one?

Per student? Yeah.

Per FTE?

Yep. Per FTE, they went from $41,000, which is really high spending per student, to new—

okay.

But this school does have a big endowment, so they can afford to spend more per student than they should. Um, I think their endowment's like $180 million or so, if I remember right. Um, so I think it's an interesting result that they did They did get back to a balanced budget. And by the way, the whole, the whole, almost the entire deficit was closed only by the expense side. They had a $10.5 million deficit. They cut expenses by $10 million in one year and their revenues went up by $1 million. All right, I can show you that, but you can just take my word for it. So it's almost all expense side. Another thing about this school is their endowment is surging. Um, yeah, it's in the top 7— top 25% of all schools in terms of growth. Um, the— I double-checked this. The main reason it's grown so much is this jump right here. Um, this jump was a massive contribution to the endowment. I'm not sure if they got a big donation or what happened here, but it was like $30 million. Um, but since then they've been pretty much moving with everybody else, right? They're up about almost 90%. Um, so that's excellent. Okay. Um, as far as revenue, I think it's pretty stable. You see revenue side, net tuition revenue looks pretty stable here. $39, $40 million, $35 million. But again, their endowments got a lot bigger, so operating revenue is probably flat if not up. Unrestricted operating revenue, $72 million from $67 million. Yeah, operating revenues look like they're pretty healthy. You can see what it looks like in terms of percentage change, um, since 2016. It's up 8%. It's a bit below the median, but it's not crazy alarming, I guess, although we do have a sharp decline here in '23. So it looks pretty stable. They got a balanced budget now, looks like, in fiscal year 2024. All right. Let me dig into some of the other staffing stuff. So, or not staffing, the policy stuff. So net tuition revenue per student can be really useful. All right. And so one of the things I see right here is you know, their enrollment may be a little stagnant. Um, one possibility is that the price is just a bit high, and you can see that they've begun to reduce it. Um, this is the— so the average kid at St. Norbert's paying $18,000 just for tuition. That's quite a bit higher than the median of $15,000, which is good. But, um, if you're struggling with enrollment, first thing to look at is price, right? If price is too high, you're probably going to struggle with yield. I don't have that data in front of me right now, but if they are struggling with yield, I would suggest looking at reducing this further. Potentially.

I'll take a look at yield on my app here in a minute.

Yeah. Yeah. Nice. Let's take a look at that. You see a very strong relationship between net price and yield. So that's the policy side. The vendor side, I can just show you the number of contracts they have. And I think— let me show you the staffing side first. I suspect I know what they— have a good guess of what they did to balance their budget in 2024. Can you guess what they did, Gary? From here, we don't see 2024 here, but this was 2023.

Number one, it goes more toward the floor than the ceiling.

Yeah, this is massive, right? Way above the 75th percentile. So they had a huge staff relative to the size of student body here. My guess is, although I can't see this data quite yet, my guess is that they cut this down quite a bit. To get this closer to normal. So that's excellent. And again, if they had this data, they could have probably done this 5, 6 years ago, right? And had a balanced budget. But, you know, it goes on and on and on if nobody asks questions, right? They're also really high on these higher-end employees, over $100K, right? And that's been surging too recently. So I double-checked the top end, like the VPs, the higher-end paid employees here that could potentially be problematic.

And that comes from the 990s, right?

Yep. Again, from the 990s. Contractors. And this is interesting. It looks like their contract usage is a bit low, contract vendor usage. So that, so ideally you would have like a normal number of vendors, normal number of staff, right? But you can see their, their mix is massive staff.

Show the raw value on that one, Matt.

What's that?

Show me the raw value on that one.

Raw value. Yeah. 7 contracts over $100K, which is quite small for a school of their size, right? It probably should be, yeah, like 3 times that, $20K or so. Anyway, that's probably some optimization they can do, right? Hire more vendors, reduce the staff, get back to equilibrium there. And that's probably what they did, to be honest. And again, but it's, it's obvious in the data that that would be the right approach. Um, but you got to sell it, right? Right. Sell it to your— again, that's why the data is super useful. You can show people, hey, we don't look normal. We can do this. Um, let me show you their vendor contracts. They also did some nice things here, I think. Orbert. Again, they have a really big EAB contract here in 2022. And Isn't Royal the same as EAB?

So anyway, it's the same type of business. I'm not sure they're—

Okay, maybe it's different. So they cut it, they cut that contract in half, it looks like. So that's good. Negotiate that down, get it normal. That's much more normal. Although I don't benchmark the consulting. Consulting is kind of all over the place. So it's hard to say. But another one is that this academic search looks like They got rid of that one entirely. So that's good. Cutting, cutting down on some of these contracts that looked high here, both of those. So lots of positives here. So here's the thing, though. I do have some questions and some recommendations. I'm going to go back to net income just to show you why I'm going to say this. Net income margin. Okay. So the budget in fiscal year 2024, positive net income, right? Um, so it's kind of confusing to see that. It's very confusing to see that and then to match that with what's happening at this school right now. Um, so previous fiscal year, everything looks fine. Um, so they just announced a few months ago a plan to cut an additional $7 million on top of the $10 that we already talked about, right, Gary? Yeah, that would be $17. Uh, you're talking massive cuts in 2 years, 3 years. Um, and their, their plan is to cut an additional— cut 20 academic programs and terminate 27 faculty over the next, well, 21 this year and 6 more the next year. Um, and all of this—

which makes sense based on the number of employees they have.

What's that?

Which makes sense based on the number of employees they have, just like you just shared.

Yeah, yeah, yeah. But again, this is balanced now. So I have lots of questions about, you, you, you don't usually see super aggressive cuts like this when you have a positive net income, right?

Good point.

And the, the, the way that they're justifying it is that they say that they're 26 Fiscal year '26 budget is showing a loss. But I will say a couple things about that. One is budgets for the current year tend to be inaccurate, let alone for the next year, right? So cutting based on what you're projecting 2 years out seems a bit premature in a lot of cases, especially not going super aggressive cuts like this. And part of what's happening here is they've got a no-confidence vote from the faculty because of these cuts, it appears. But let me just say this. If you're one of the faculty members or staff members there going through this, I would say look very, very— ask a lot of questions about that budget that they're using to justify the cuts. There is a history here where budgets tend to not match reality, right? Especially budgets projected way out in the future. All right, I'll leave it there, Gary. I'll pass it back to you.

Okay, so I just want to bring up— I'm going to share my screen. I'm going to bring up just a couple of quick items on the College Viability App. And I'm going to— we talked about, well, you got to do graduation rates, Matt, because if I don't do graduation rates, I might melt. So for our colleges, we're going to do the graduation rates. And again, we see for both Cornell and St. Norbert, really strong 4-year graduation rates. Uh, less so for Simpson, they're below 50%. And while none of these are really in the dire financial straits we've seen at others, Simpson University would be the closest. I'm always— it's, it's cool to see colleges graduating students, but it concerns me that they have financial issues while being strong colleges. Matt, you and I've seen this regularly. It concerns me. You mentioned admissions yields. Take a look at that real quickly. That's the only other thing I want to look at. This is the 2025 College Viability App. It's the full version for executives to use to review dozens of comparisons for more than 2,700 private colleges and public 2- and 4-year colleges. Admission yield— was that Norbert we were going to look at? Yeah, Cornell, because Cornell's is down quite a bit.

Oh, the yield, uh, St. Norbert.

Yeah, St. Norbert's is down a little bit in yield. Again, in general, admissions yield across the industry is down. It's just too easy, you know, I think the, the old analogies is just as easy to order another ingredient on your pizza as it is to submit another application to a college. So More applications, fewer admissions, gives a general, general decrease in yield overall. We see that here. You want to look for the big decreases. So if I had any concerns for these three, it would be at Simpson University, down 17 points. Um, and this is— this, in my mind, this is the market saying, hey, you've accepted us, but we're not going there for whatever reason. And the reason— the list of reasons could be countless. That concerns me. These two less so, but they are down a little bit. but we see that commonly. But I do want to jump ahead, watching the clock a little bit today. I want to look at the Majors Completion app because this is a tool that's new in 2025, and it's our capacity to help colleges like you did for the last 30 minutes or so with these colleges on the academic side to look at the programs where their market share is high or not so high and to make concrete decisions and not to cut things just based on their own internal data, but on data associated with other colleges. So I'm going to quickly show two comparisons. So I've got our 3 colleges here. This is a reflection of internal market share. So Cornell College is up first. You can see the majors that they offer, and this app covers again all publics and privates, some 60+ common majors across associate, bachelor's, and master's degree levels. You can see those there. And what I look for here is a couple things. I look for low numbers when I look at, you know, I look across maybe less than 5. So all of these, you have to wonder why Cornell College is in the business with these majors because they're so small. And I'll show you comparisons across regions here in a second. Same thing for Simpson, you know, got some really low enrollment majors. What are they doing in religious studies if they have no significant market share internally? You know, it's essentially 0% of the entire market share. And I also look on the high end to see if there's really high numbers. And psychology— what am I at here— psychology at Simpson University, this one concerns me because if you see from 2020 they had 58 and it's down 40 and a little bit over the last 4 reported years. But look at how high those market share numbers are. If they lose a faculty member, if they lose a couple of faculty members, what happens with such a heavy reliance on a single major like we see at Simpson University? And then St. Norbert, again, not as much risk down here. No real high percentage, again, internal market share. So biology in 2020 was 17% of the market share of all the majors they offered. Of all the 60 that we track here, and it was 20%, um, in 2023. Not that big of a change, right? That's internal market share. Let's look at— that's like the more common definition for external market share. And I'm just going to do Iowa because that's where Cornell College is. And they're not even on my first one, but I've selected accounting. And here's a graphic representation of bachelor's degree market share in 2023 in Iowa private not-for-profit, 4-year and above colleges. We can see Buena Vista and Central have good numbers. You can see that reflected here. We have to ask, what's Clark— what is Clark University doing in the accounting business? We can look at other majors. I just want to grab a couple. Biology is always a common one because there's a lot of colleges that have biology. Interesting, not so many in Iowa. That's interesting, I would have expected more. And again, you can see the colleges doing well in the market share, and you can see the colleges not doing so well. Now, one caveat to this: these are the folks that have graduated So COED, about 30 graduate in 2023. Really, you multiply the number times 4 because they've got about 4 times that in the program, 120-ish. And that's significant numbers. 6 times 4 is 24. What do you do in the biology business when you have such a small market share? And you can see all of the programs, all the majors that this covers. We can do business. You can take a look over here. Interesting, we also got a pretty picture for you. So you can see a more graphic representation of the same thing. We can even track this by trends with a market share comparison. And I've got psychology for 5 colleges. You can select the major, the sector, and the individual colleges. And you can just get a quick glance and see Buena Vista went from 44 to 25 in the 4 reported years. 18. Clark University is flat, essentially, over the last 4 years. So again, just more data, just like what Matt showed you for the last couple minutes. This is data to use to compare your college to others. If you have to cut, great, this gives you better data on that. But think, what about the opportunities? Let's look at something more common here. Let's look at psychology. That's so common. We'll bring that psychology up. What if there's an opportunity in psychology to partner? What if, I'm just making this up, Coe and Clark partnered together to be a dominant psychology offering in Iowa, private college offering in Iowa. That's what you want to look at as well. We can even change this. You need to add private to see what impact that would be as well. So Matt, when I do these kind of data shares, this is what I'm looking at, just like you do. And then don't throw anything at me. I know you're in Tulsa and I'm in St. Louis. Don't throw anything at me. But it's the comparisons. It's the comparisons that matter. And Matt, how many times have you and I talked about colleges who only use their internal data It's risky, Matt. It's just, just too risky to be so parochial with your data when tools like what you saw with the private college financial compass, the College Viability app, the College Majors Completion app that are out there. It's the comparisons that matter. And Matt, before we wrap this up, we just offer each week those colleges we think are sustainable. So of the 3 that we looked at today, do you want to characterize any of them as sustainable?

Yeah, I think Cornell, like I said, when you smooth that out, looks like they have decent positive net income and some opportunities, like I said, to right-size staff and contract usage potentially to even make that better if they're uncomfortable with their current standing. But again, there's a big question mark with that oscillation. I'm not really sure. What's happening there. And if the accounting's even correct, Simpson in California, like I said, that they're on an unsustainable path right now. Eventually they'll have to borrow money to repair their buildings and that can't go on forever, right? So again, there's some opportunities I think that are fairly simple to to, to turn that to sustainable. St. Norbert also looks sustainable. Like I said, 2024 looks good. They're making apparently very pessimistic projections about next year, not this year, next year. And so there's questions about that. And I think, you know, the stakeholders need to ask all of the assumptions, see all of the projections, how they're all being made. There's a lot of assumptions that are going to go into that, right? Like, How good is the stock market going to do the next year, 2 years? That's really hard to predict, right? Impossible to predict. So again, there's a lot of reason to suspect that a budget projection 2 years out is going to be wildly inaccurate. So there's a lot of questions to be asked there, especially when you have a big endowment like Norbert does, right? A decent amount of their operating revenue is going to come from the endowment, and you have no idea what that value is going to be. In 2 years, right? So, lots of questions there. I would ask very difficult questions and demand answers there.

And as we wrap this show up, over the last couple of weeks, Matt has added 2 really highly functional tables to the Private College Financial Compass that really we've seen a lot of feedback on the screenshots we've shared on social media, and it just goes to reinforce The value of data. Of course, we don't offer this for free. There's a fee attached to all those things. But the value— and Matt's talked about this on previous shows— the value these apps provide, the cost is couch money compared to what it would cost to bring in million-dollar consultants or hundreds of thousands of dollars of consultants effectively to do the same thing. But we've got one, we share this app for anybody that wants to use it. And it's there if you want some demos. I'll include some private demos. I'll include my email address for some links. We'll set up a private demo to show you any of the apps we showed you today. Also, we can look at the Strategic Compass, which is a much more in-depth tool that Matt has developed to help colleges even more than what's, what's out there right now. So Matt, always a pleasure. Thanks for those, those of you joining us live on a Monday. We'll be back next Tuesday on our normal time slot, 10:30 AM Central. For Matt Hendricks, I'm Gary Stocker. Thanks again for making time to watch. We'll be back next week.