The College Financial Health Show with Matt Hendricks & Gary Stocker for October 29, 2024

It is Tuesday, October 29th, 2024. Guys, I wonder what happens this time next week. Hey, it's not the show as in baseball, it's the College Financial Health Show with Matt Hendricks and Gary Stocker. And for those of you new to the show, it's really the only show that looks at the financial health and viability of private colleges across the country. We look at data from multiple sources. We use some technologies we think nobody else has in terms of getting timely data. Who can use this? Well, if you're a college leader, you should already be using it. If not, that's probably on you. If you're a board member, the same thing. But faculty, staff, students, and their families, this is a show where we'll let you know about the colleges who are doing the right things to keep their finances strong and the colleges that are not. If you're a bank or a bondholder or insurance company, you know, you might want to take a listen. You might want to drop us a note and say, hey, would you mind taking a look at these colleges? We'll be happy to do that for you because that's what we're really good at. Hi, my name is Gary Stocker and I'm the founder of College Viability.

Hi, I'm Matt Hendricks, founder of Perspective Data Science, and as we previewed last week, we're heading to New York today. We're looking at Pace University, Ithaca College, and Alliance University. So big overview, we have good, okay, and bad. All right, basically in that order with Pace, Ithaca, and Alliance. Um, and interesting thing, I was looking at Alliance data getting prepped for the show and I was like, how is this school still surviving? Well, they're not. Gary actually picked this college that's, uh, already closed. So, um, it's going to be good though for the show because we'll, we'll go from one extreme to the other. And it's interesting, I'll bring you through the timeline on what was happening with their creditor and what their finances look like and how this whole thing unfolded. So it'll be cool to see a full timeline. And actually got to give some props to Middle States for doing the right thing on this case. Although again, I think way too, way too slow. Um, and I'll bring that up when we get to that section, but I'm gonna start with a good school today. Start with Pace University. And, um, I think there's a lot to like about this school and I started digging deeper into my paid app to see what they did. And found some surprises, as I always do when I dig into the data. But I'll show you first their overall financials. So I've already got it on Pace, and I'll zoom in a little bit here, starting with just their key, uh, financial operations metrics. Net income margin— wait, sorry, I got these backwards. Net income margin, and let's do cash flow on the bottom. All right, net income margin, we got positive 4. That's actually above the 75th percentile. Maybe a bit too high, actually, plus 9.8%. These are always plus, plus, plus. They had 2, 1 negative year. No big deal. Everything else is plus. Okay, so that's great. Cash flow always positive. That's exactly what you would expect from a school that's well run. And again, maybe even perhaps too high now. Maybe they have some money to make some investments. Um, so that's the key financials. I'll bring you through everything, really the whole picture here. Let's take a look at revenues over time, uh, operating revenue and expenses in the bottom graph. Okay, so top graph key here is their operating revenues are up 17.6% since 2016. That's well above the median of all private colleges. And again, this red line is what a closed school looks like. This is the median for 9 closed schools, and we're going to see another one that actually looks quite a bit worse than this. But closed schools at about -17%. And this school is growing, right? The expenses are up 16.7%. Revenue's up 17%. That's perfect, right? I mean, as your revenues are going up, you should be investing in your mission. And it's exactly what they're doing. That's perfect. All right, so that's what the picture looks like. I'll show you net tuition revenue. Net tuition revenue is up a bunch. The median school has actually contracted a little bit on net tuition revenue, down 4.4%, and Pace is up. Again, this is Pace in New York, up 17% on that tuition revenue with a sort of increasing slope here from 2022 to '23. And I'll show you, I'm going to dig into that a little bit on my paid app and we'll, in a second, show you how they're doing that. I can see a lot of that in the data. Of course, I can't see a lot of the details of what's happened there, but I can give you a big picture of what they did to generate that increase in net tuition revenue. And we'll look at that. Let's take a look at the endowment. I think they have a big endowment if I remember right.

It is.

Yeah. Well, it may be big, but it's small compared to their expenses. So that's actually probably problematic for them. Endowment to expenses. And then I was going to show you appropriation. So again, I'll start with the appropriation. So this is a school that clearly does well at managing its endowment. In fact, their draws are a little bit small. They don't need to be bigger, right? They have a balance. They already have a big surplus, right? So this is great. So their endowment's growing well. And in fact, it's probably growing faster than normal because of those small draws. And so I'll show you that. Change in endowment value.

Yep.

A little bit bigger, a little bit faster growth than normal at 53% since 2016 compared to the average or median school of about 45%. But their, their endowment is actually pretty small compared to their expenses, which is interesting. It's about half the size of their expenses, whereas the median is about same size as expense, annual expenses. So that's interesting.

Yeah, we don't see that very much.

No, that's a pretty small endowment, but, um, you know, that clearly doesn't matter to them. They are, are killing it. All right. Uh, unrestricted net assets. Let's take a look at that. Unrestricted net assets. Take a look at the ratio again. They don't have a lot of unrestricted net assets, pretty low. And, but they're managing them well. They're growing. If I remember right, change over time. Oh yeah. Huge growth. 402% growth in unrestricted net assets. So the school is on the rise for sure. You've got a huge increase in net tuition revenue, their endowment's growing, unrestricted net assets are growing. And let me just show you their physical plant. So I'm talking about their buildings, their equipment, computer equipment and stuff like that. So I'm going to show you property, plant and equipment. So first I'll show you the investments in property, plant and equipment relative to the depreciation rate. And then I just added this one this morning just to give you a better sense and me a better sense of how these— the value of their property is changing over time. And I'll start with the bottom graph, actually. So their property, plant and equipment value is up 27.5% since 2016. That's a bit better than normal. Normal is about 14% growth and they're at 27% growth. And the main reason for that, you can see right here, the main reason is they're injecting a lot of cash into their physical plants. Right. This is, again, the ratio of cash going towards property, plant and equipment relative to the depreciation ratio. And any ratio above 1 means your capital stock is rising. Right. And they're always above 1. 3.8, 1.8, 3, 2, 1.2, 1.7, and so on.

We hardly ever, we hardly ever see that, man.

No, this is a school again, not a huge endowment, but they're clearly growing, both growing the endowment, growing unrestricted assets, which probably a lot of these buildings and the computer equipment and things like that. And, uh, investing in their, in their, uh, they're growing enrollment too. And I'll show you that in a right now, actually. So, so one of the questions I want to dig into is how, so one of the, one of the points of this show, and we've had people ask us, what's the point of the show? Uh, and maybe not a positive way, right? I think there are a lot of positive things about this show. One is to try to learn what works, right? And, and also what doesn't and flag those things so that people can learn. Um, so clearly whatever they're doing on the net tuition revenue side is working and I can give you some hints as to what they are doing. Uh, let's take a look at, this is the paid app that, uh, I don't offer free, but, um, you can learn a lot from it. And you might reach out to me if you want to learn a lot about what's going on at your school. So I'll, I'll show you what's happening since 2016. Their net tuition revenue is up a bunch, right? So how is that happening? Well, it can happen a couple of ways. It can happen either by getting more students or the students paying more per student, right? And it seems like it's mostly more students. Their, their FTE enrollment is up 5%. But interesting thing here, it's not across the board. Their undergrad enrollment's pretty flat, if not, it's decreased by 6%, right? So that's not great, but their graduate enrollment's up 32%. And it's a lot of students, about half of their students almost are grad students, or not half, but you see it's a big graduate student enrollment. It's up 1,300 students. So that's their strategy, it looks, and it's working, right? Even though they have losses on undergrads, they have growth in graduate students. So the question is, I think, If you're a policymaker, what are those programs that they're investing in? I can show you them on the degree programs table. And just, there's a bunch of master's programs. It looks like they've just brought online. And so one of them is not necessarily brought online, but serious growth in computer science, master's level computer science. See, back in 2016, they had 165 grads. Now they're at 288. That's significant growth. And then one that's unexpected is history. Take a look at this. They didn't have any history major graduates in 2016 at the master's level, and now they have 97. That's a lot of grad students in a short amount of time. So they probably just started this program like right, right about 2016, '17, I suppose. But I have to look back and talk to their provost about that. Another thing they added, they also added, let's see, they've got special ed, special ed programs, 13, SEP 13. I think this is education. They added like master's level education programming. Again, you can see 53 grads, now they've got 126. So master's in special ed. And they have health profession. That one's not huge growth, but there was another one that, oh, this one's interesting. I don't know what this is actually. Multidisciplinary master's degree. I've never heard of that actually. I've heard of that at the undergrad level, but it's exploded to 50 graduates in a multidisciplinary master's program. Not sure what that would be. Multidisciplinary Studies. So interesting things to learn here. If you're a school that wants to grow enrollment, perhaps you can follow this model, add these programs— history, computer science, special ed. That probably requires accreditation, I would imagine, licensing. But all these others are pretty easy to add. This, this one in particular, Multidisciplinary Studies, you can probably just add that tomorrow. And so I guess one of the things that you worry about adding programs is whether they added a lot of faculty as well. And so that's the cost of adding some of these programs. And it doesn't appear to be the case. So they actually, the number of faculty in 2016, full-time faculty was 486. And it is 483 today, last read.

And the blue line is the peer group, Matt?

Yeah, peer set is blue. Right. So they're, they've held their faculty constant and they've added some graduate programs. So they're probably taking undergraduate programs and just adding, tacking those onto the, to the same faculty. I'm not sure how they're managing the load, if they change the load or if they just had excess capacity or what. But one thing that's interesting too is you can see their per student values. Take a look at their, so this is faculty per student. Right? So they're at about 4 faculty per 100 students. So 25 students per faculty member or so in 2016. And they're a little bit less than that. So they actually have bigger class sizes slightly in 2023. So they've kept the class sizes really big compared to their peer set. Their peer set have a lot more faculty per student. So it's not costing them essentially, at least at the graduate level, Looks like they're just more, they're putting more of a load on their faculty, which may or may not be a positive thing. Certainly a positive thing for the financials, right? Certainly positive for the financials. And that's why this school is doing well financially. It's a big part of it.

All right.

Another thing I want to look at is why is their undergrad— so they have this huge growth in grad enrollment and you can see it here. Why is the undergrad not growing? In fact, shrinking slightly and is expected to continue to shrink. Well, it's going to stay probably— this is my simulator projecting now. It looks like they're going to stay about flat for the next 5 years considering their same enrollment parameters. And interesting, interesting to look at what's going on here. Again, 2016 was when we started to 2023. And you can see their funnel looks like they have really great applications, 26,000 applications, and a normal number of applications for them would be about 21,000. So that's excellent. They're not selective at all. So that's certainly not causing them to reduce enrollment. They basically admit everybody. And they have forever. They had 84% admission rate. Now it's 83%. It's the same. What has changed is their yield. And that's this number here, the percentage of admitted students that actually enroll. It used to be 15%, which is pretty normal. Yield rate. Now it's 9.5%. It's very low, right? You see their peer set's about 17.6%. So they have a really low yield rate. And so again, you worry that, you know, what can cause a low yield? One is having the price be too high. That could be one issue. Other is just ineffective admissions office.

All right.

Nobody wants to say it, right? But you may just not be doing a good job of selling the place. And so that's something to look at as well. But I think there's some evidence here. I probably don't have time to go through all this, but potentially the price is a bit high. I can show you that. I'll just show you that right now. Compared to their peers, their net price is about 10% higher than the peer set for kids and students in the range of $75,000 to $110,000 family income. That's not huge. That's Of course, that's 10%. It's quite a bit higher, but it's not massive. The, the area I think they have the biggest problem is low-income students. They're paying— their price is way higher, 25% higher than the peer set. So I think they have an issue with their pricing strategy here. It shouldn't look like this. You shouldn't have a net, net price for low-income students that's basically the same as everybody else. It's not normal. You can see what's normal here is $23,000 going up to $37,000, right? They go from $29,000 to $37,000. So I think what they have here is potentially, they don't have enough need-based aid, basically, is what the problem probably is, but they would need to dig into that. And this is why you use data, right, Gary? You wouldn't know this unless you'd looked at this, right? So I'd look really hard at the need-based aid formula that they're using. It's probably not normal. It's probably quite unique in that it's not giving enough. Maybe they don't have much need-based aid at all. And again, the thing is, like, reducing— increasing need-based aid sounds like you would reduce your revenue, but you can actually, you know, depending on how sensitive the students are, which they are, to changes in net price, you can reduce the net price and actually get more revenue because you get a lot more students, right? So that's the idea. Okay. One other thing I want to show you here, another thing that I'd look at if I were them. I like to look at what's happening to their market share in different states. And you can see they get 51% of their students from New York. That's really common from your home state. They get a lot of students from New Jersey as well. About 13% of their students come from New Jersey. The problem though is that their market share in New Jersey has fallen recently. So that is a problem, even in their market share in New York has gone up a lot. So a reduction in market share in New Jersey, an increase in New York, that's problematic. Could explain a little bit of why their undergrad enrollment's falling off. And let me just show you another reason why I think this is problematic. First, I'll just show you another school I'm going to compare them to here. If we zoom in on some of their peers, I think Pace is right here. Pace is in Manhattan, right? It's right here. Pace. Here's New Jersey. All right. And there's Fordham. And one of their peers is Sacred Heart way up here. I think that's Connecticut. Yeah. Um, let's take a look at market share for, in New Jersey for Pace versus Fordham versus Sacred Heart. And this is where I think you can see the issue that I wanted to bring up. Um, so we're gonna look at market share in New Jersey and take a look at— so this is— so first of all, this is market share for Pace. They used to have higher market share in New Jersey, and here's the fall-off in market share in New Jersey. And Sacred Heart— let's compare that to Sacred Heart. They used to crush Sacred Heart in New Jersey, right? Sacred Heart's blue, Pace is orange. They used to have like double the market share of Sacred Heart in New Jersey. But Sacred Heart has reversed that. Basically, they have a much higher market share in New Jersey now than does Pace. And you saw on the map that I just showed you that Pace is a lot closer. So that's problematic potentially. So if I were them, I'd look at, okay, what did— what have we done differently in New Jersey compared to what we were doing back in 2009 versus what Sacred Heart's done? And the same thing has happened with Fordham. You know, South Fordham was just down the road. Fordham is— again, Pace had better market share in New Jersey than Fordham did in 2009. And again, it's totally reversed. Both Fordham and Sacred Heart doing better in New Jersey than is Pace. So those are things to look at. Price, market share, strategy, what's going on, why are we losing students from New Jersey, that kind of stuff, where you start really getting into policy options. That are data motivated, right? All right. That's what I have. Really great school though. But I was surprised to see that undergrad's not so great, but totally graduates are pulling their— pulling this school higher. All right. Let's take a look at Ithaca. Ithaca College. Okay. Well, you can already see a preview here. Ithaca's struggling net tuition-wise, but I like, I admire this school because they have a massive loss in that tuition revenue, but they're able to keep the balanced budget, right? This is what we've been preaching, right, Gary? I mean, it just drives me nuts. We saw a school last week that lost a ton of revenue, but they just continued spending as if nothing had happened, right? And they, in the process, ate up 84% of their unrestricted net assets in just a few years. That's, that's not good management in my opinion. Really irresponsible, right? Is basically not doing anything that it seems like, not doing much. I'm sure they're doing something, but not clearly, clearly not enough. I just reset this. Let me go back to Ithaca. All right, so here's the positive balanced budget, right? They got positive net income in 2022 and '23, despite what you already saw, the big loss in that tuition revenue. Positive cash flow '22 and '23. That's great. I'll bring you through the operating revenues and expenses. Uh, operating revenue, expense. And so this is what I admire. Again, their operating revenues are down 16%, and they basically mirrored— well, not quite. They had— I need to back up a little bit. They, they've cut costs significantly, but just enough that they needed, right? They actually didn't need to cut costs by 16% to keep their balanced budget. 'cause they actually had a really big budget surplus back here in 2016 when they started. So they've used some of that, and then, which gave them a buffer. So they really only had to cut costs by about 7% to keep their balanced budget, and that's what they did. So that's great. I mean, this is a school that's clearly on top of it. Again, they probably have a good board that's making this happen, or a good administration, or both. But yeah, it's really problematic when you don't have people making decisive moves budget-wise on time, right? And just eat up all of your assets. But this school's keeping pace. I showed you net tuition revenue. Let me show you the endowment. Endowments. And again, I think if I remember right, they're also— their appropriations were good.

Yes.

So this school does have a massive endowment. It's almost 2 times the size of their annual expenses, which is quite high, almost. Again, the median's about 1. And their appropriations are perfect. They're right at 4% here. That's great. They track really closely with the median. So again, this probably means the board and/or the administration is quite competent and is on top of this. They're not going to— they had some massive loss in net tuition revenue, right? The tendency might be at a different school to just use the endowment, right? To use the endowment to plug the gap. Don't cut any expenses or something like that. Again, that's not sustainable. It's not good for the long-term future of your institution. So because they've made these decisions, I think their endowment has grown well. Yep, it's a little bit lower growth than normal, but it's not because of their big draws. So again, this would be something data motivated here. Their endowment's up 38.5%. Again, that might sound good, but it's not good. 46% or so, 45% would be okay. So they probably have poor market returns and/or poor contributions to their endowment. So they need to check both of those. And benchmark those and figure out what the problem is. Could be both, could be one of them. Um, I started going on a tangent last week about investment strategy, but take a look at that. Your returns are probably low, or you're just not getting contributions, which would be bad fundraising, uh, potentially as well. So both need to be checked. Um, all right, unrestricted net assets. Let me just show you— I'll skip the unrestricted net assets. Let's go to, um, a pre— uh, the physical plant, property, plants, and equipment. Oh, okay. So their property, plant, equipment is actually falling off. So they have— so there's some stress, right? They've had— definitely had some cash, uh, go out the door from that they used to get from net tuition revenue. And I bet they're not investing enough to keep their physical plant up And sure enough, they're not. Again, you want to keep this above 1. They were doing that up until 2020. All right. Since then, it's been pretty poor investment in the physical plant. And you can see the result here since 2020, their physical plant values fall off, pulling off quite a bit. All right. So that's problematic. Again, I mean, part of the, part of the way to fix that maybe is find what's wrong with your, your returns on your endowment, fix that, and you might have enough cash then to invest in your property. All right. Last school, Alliance. And this one, I started looking at this and it's like, how is this school still around? And it turns out they're not.

You're welcome, Matt. I gave you a bad one. Yeah.

And so the reason I was like, how are they still around? So take a look at their net income margin. -23%, -20%, -17%, -30%. I mean, it's pretty, pretty bad, right? And again, the red is the closed schools. Blue is they're -108%. And this is where I was like, wow, I need to— if they survived that, how did they, how did they survive that? Right. So they didn't. And so they're negative cash flow every year. Just, yeah.

So you have to wonder that for an example like this. And again, you know, this is a closed college. We've never done a closed college live. What was the creditor doing? That's a long period of time with clearly bad numbers and they didn't close until last year. Okay.

So yeah, this is what I want to talk about most with this. I can bring you through all the numbers, but it's really bad. This is a really bad school, but you can see it's really bad in 2016 when, when I first— my first year of data and it probably was bad well before that, right? I mean, this is probably still the same thing way back. So I was actually doing some research on that. What was the whole timeline with Middle States? And it looks like the first action that I saw on the website of Middle States taking action against them was in 2020, mid-year 2020. All right. So just back at the graph here, that is this year right here.

Okay.

And you can see it was a complete disaster before that, right?

Yeah.

And also, I think their net unrestricted net assets went negative before that as well. Yeah, negative unrestricted net assets. We've seen other schools like that, Gary, right? Yeah, but Middle States— under Middle States' watch. But some— for some reason, Middle States hasn't done anything to those schools, but this school gets finally some action against it. Um, but so that's kind of curious. I just wonder, like, how are they being consistent on this? Um, on how they make decisions. But anyway, 2020 is when they started. They probably could have done this 4 years earlier, but they finally requested a supplemental information report. I may be wrong, maybe they did request this earlier, but I looked at the whole history of their website and this is the first I ever saw any mention of, uh, concern over their finances. And I highlighted it there. So they wanted to report in 2021. All right, then just And was that 2 years later? They put him on probation 2 years later. Okay. And that's what we've been begging for, right, Gary? I mean, they finally give us a heads up. Yeah. I mean, they could have put him on probation in 2016 and, you know, that nothing really changed between 2016. And in fact, they got a little better between 2016 and 2022. So just kind of curious. But here's the interesting thing. They put him on probation in 2022, June 2022, 1 year later. They pull it. So they put a school that's been struggling for over a decade on probation and then one year later take them off. I just don't think that's ideal timing either. I mean, you put them on probation, give them at least 3 or 4 years to try to fix it, right? I mean, it's easy to Monday quarterback them, I know, and maybe we're not being fair to them. I'm totally willing to admit that and be happy to bring them on, but Again, I think if, look, in hindsight, it probably would've been better to put them on probation in 2016 and really say, hey, you guys have serious problems you need to fix now. And then give them a few years to implement that before you pull accreditation. But the way they ended up doing it was one year only, right? You can't turn your finances around in one year. It's impossible.

And Matt, I'm starting to hear reports from others that the Department of Education is becoming, I'll be nice here, frustrated. With accrediting agencies' inability to do the kind of heads up that you and I do week in and week out. And you have to wonder if it maybe had started back in this timeframe or Middle States said to itself, you know what, let's make a case, let's make an example out of Alliance University. But you and I have seen this week after week. We'll continue to see it. I fear that the accrediting agencies just aren't doing, doing the job of giving the public a heads up. That these colleges are not going to survive, or if they do, they're going to survive hand to mouth. And who wants to go to a college that doesn't have the financial resources to provide a positive college education?

Yeah. So interesting too, that the same time they placed them on probation in 2022, maybe there's standard policy, but they required them to make a teach-out plan.

Yeah.

Like right then as well.

Okay.

Um, so that was 2022. One year later, they pull the accreditation after, uh, an in-person meeting with the administration apparently didn't convince them that things were going to turn around. Um, and so they pulled their accreditation in June of 2023. And so I went to their website, just curious. Um, and you have a statement, I think this is from the board. Um, and you know, I just really hope that this is not true, that they say they, we were surprised by Middle States' decision to pull their accreditation. Again, they had a 30% net income loss about 26, I think, in 20— in way back in 2016, and probably went way further than that. So basically the board's been approving these budgets, uh, that have had these results for many, many years. They were given the notice 2 years earlier, right, to set up a plan, then put on probation. I mean, all of that. And, uh, so I mean, I, it's— I find it hard to believe that they were surprised by the decision, but if they were, that's even more indicative of problems at the school, right? They probably would, if they were really surprised, if that's actually true, then you have a lot of board members that really aren't paying attention and understanding how dire their financials were.

And what I see in the many college closures that I follow is there's two basic responses. One is, gosh, we didn't know this was so bad. And the other is just no communication at all. And the University of the Arts, University of the Arts in Pennsylvania is the latter. They're not telling anybody anything. And they close, they announced closure on like Friday and closed a week later or something like that. That's again, that's why you and I are here. We, we are the heads up people. Right.

I mean, so you're, they're, they're unrestricted net assets went negative in 2017. So if that's not enough to I mean, if your, if your personal finances, your net income went negative after being positive for many years, wouldn't you be concerned? And what your bank certainly would be concerned and your credit card companies, right? I mean, this is simple stuff. You just need to put in the time. And yeah, I really hope they weren't surprised by that. And the whole thought was just like a PR.

They weren't surprised. They were just saying that for public consumption.

So yeah, anyway, that was the timeline there. I think it's really interesting to see like how that happened and it happened far quicker I mean, I'm advocating for stronger, and I think you are too, Gary, right? Stronger moves by Middle States and HLC and others. But I certainly, I don't think it's ideal to put them on probation and then one year later pull accreditation. I would rather see probation, say, 2016, earlier, and say, hey, you guys have a serious problem, wake up, right? And then give them a chance to actually have a full cycle of students come through to turn it around. Maybe they can't do it, but at least give them a chance. To, to—

I even think about the, the communication of an, of a probation like here at Alliance. You know, you had to do a lot of work to go find all this kind of stuff. There's very few people in the world who are going to do what you and I do to find the details behind this. And so when accrediting agencies find this bad math, if they had that capacity, and Matt, you and I have to recognize the fact they may not have the resources and tools available that you and I use to say these colleges are in trouble. But they are badly, badly mishandling that heads-up function to give students, their families, even faculty, staff, and even community leaders a heads-up that a college is in trouble. Because you and I see it in graphic images, data graphic images, week in and week out. Yeah.

I just wonder how many, how many faculty and students had no idea they were even on probation.

Yeah.

I would be willing to bet a lot of them did.

Oh yeah.

Had no idea.

Yeah.

And that is a problem too. This, this whole information. I mean, one of the things I expected accreditors to do is be in charge of disseminating information and making sure that stakeholders understand what's going on. Right. And make the market operate more efficiently that way. But it doesn't seem that that's really happening either. But no, no.

Now the question I have on the 3 colleges you presented, I'm going to try not to give you any more closed colleges in the future. Is Pace and clearly financially strong, and they may or may not be being selective based on a family's ability to pay because your data showed that could be interpreted that way. But I wonder if— well, and I'll back up for a little bit— Vanderbilt University in the last few weeks has announced a move into Manhattan, and just last week I think it was a move into Florida. In your mind, is Pace University one financially strong enough to look at becoming even stronger by engaging in serious Organic growth with mergers and acquisitions?

Yeah, I don't know. I mean, I wouldn't, I mean, all of these schools have their own identity, right? And, you know, at the end of the day, they look similar to people on the outside, but I think they all try to carve out their own niche and have a different sort of mission. But yeah, I don't know. I mean, if a school has a balanced budget like Pace, I wouldn't be really looking at mergers and acquisitions, but, um, you know, it's up to them, I suppose. Okay. But what would, what would be your opinion on that?

Well, you know me, I'm, I'm a merger and acquisition guy. I do the data piece to build toward that. Go ahead and make me talk so much. I'm, I'm always looking for, for financially strong colleges to reach out to other financially strong colleges to create what would effectively be a dominant market position. And I think in this day and age, it does not have to be proximate. It can be across large distances. And just looking at how strong Pace was, and I think how clearly they're deciding what markets to go after— you showed weaknesses in New Jersey, maybe they did that with intent. And again, and I'll back for a second, if you haven't looked at Matt Hendricks' paid app and you're a strong college, you're looking to merge with other colleges, or you're a weak college and not yet having the last dollar circle of financial drain but have a couple bucks, reach out to Matt. Have him do this analysis for you. At least be informed. Don't head like the folks at Alliance did and say, oh, we're surprised, because I'm not surprised when I see these. Matt's not surprised because we're looking at the data. So Matt, it's my turn, right? Yeah, you know, let me go ahead and share my screen for a second here. And Matt does more or less real-time, and his focus is clearly on the financial piece. And let's take a look at the Do-We-Three Colleges. And this is the 2024 Private College Viability App. We look at data from the last 8 reported years, um, from 2015 to 2022. And for those that look at that, Matt, and snarl and say, well, that's old data— well, maybe, but 8 years worth of data, as you showed on your both paid and free app, is a trend, be it a good trend or a bad trend. And we can see that of these 3 colleges, no surprise, 2 are struggling with enrollment growth. And Pace University, Matt, over the last 8 years has grown, right? You can see pictures on that stuff if you want. You want to see pictures on that, that's great. But you can look—Alliance University plummeting, Ithaca College plummeting, And slowly the good folks at Pace University are growing. And once we send our students to college, once we send our children to college, Matt, we like them to graduate, right? Right. And we have one really strong— Ithaca is really strong in graduating students after 4 years. And I've talked about this on my This Week in College Viability podcast. They fall in the category of a really strong, really good— look at that— really good school that graduates students. St. Louis University, Marquette University, and some others do the same thing. They each is showing some strains of financial pressure associated with the market. I can understand a college like Alliance only graduates 1 out of every 3 students who start there not being able to make it. It's just not getting the job done. But when we see colleges like Ithaca You know, they're, you know, I think it's not going anywhere. They're gonna make some adjustments. They're gonna be fine over time. Maybe they'll reach out to you, Matt, and look at your data to be even stronger. Maybe Pace University should reach out to you. I think that's an opportunity as well. And Pace, you know, their 2022 4-year graduation rate was at 50%. All right, it's a coin toss college. Half their students graduate, half don't. That's nothing to write home about. If I'm a board member at Pace University, I'm asking why can't we graduate more than half of our students? Because financially we're doing well, but clearly there's a positive trend and they've gone from 37% up to 50% over the last 8 years.

Which is remarkable too, because remember they admit like 85%. That's a good point.

Yeah, that's a great point.

Those schools usually struggle with the graduation rate, right? But yeah, that's a great point. Yeah. So that's interesting. They've done something to improve it.

Yeah, that's a great point. And again, Matt briefly referenced the endowment values and we'll take a look. Um, this is an equalizer. So endowment value per student. And again, you can see who's, who's, who's pathetically weak, who's strong, who's somewhere in the middle. And these are just the total dollars. And again, we can see that, um, Ithaca's here in the middle, Pace, and then of course not even, not even college couch money at Alliance University. No wonder they didn't make it. And how much of the store are these colleges having to give away? We do this every week and we'll leave the funded version alone, but look at the unfunded version. And from, let's just do the two that are still alive. Ithaca went from $100 million in unfunded discounts, merit aid scholarships, up to $112 million. So up about $12 million and change, up 12%. Interestingly, Pace up a lot more. They're up 44%. So they're giving away a lot more of the store, Matt, yet they've been able to drive increased net revenue. And again, the folks at Pace, the folks at Ithaca, and really any of the colleges that we do, reach out to Matt, reach out to me. Our, our contact information will be on the version of this that we posted on YouTube later today. Reach out to us. Come on, tell us your story. Tell us what you've done, because there are colleges that might want to talk to you about that. They might talk to you about partnerships. They certainly might want to mimic what you've been able to do well and learn from what you've not been able to do well. And Matt, we had— we talked with college presidents who reach out to us. They haven't decided to join us on the show, but they use our data to help make decisions about where to grow their organizations. And then the last one I'm going to show is tuition and fees. And again, we can see that our colleges— we'll leave Alliance alone— Ithaca's tuition and fees— you saw this, Matt— net tuition revenue down $30 million over the last 8 reported years. Pace has been able to grow as well. Let's quickly take a look at program completions. And this is a relatively new app from College Viability. We believe that colleges need to look at the comparisons, how many students are in certain programs completing certain programs. And so we developed this program completion app. And again, we'll start with biology. I won't go through all of these. And you can see each of the three— Alliance, we won't even worry about— have modest numbers. Pace, even though their graduate programs have grown, they've grown more recently than the data shows, Matt, because your data is a little bit more recent than we have here.

And yeah, some of those new programs I think really started firing recently.

I bet the 2025 version of this app will show a much bigger number on the graduate programs. And then I'm going to bring up business and marketing before I look at each, each college individually. And again, Pace, you know, look at the, look at the numbers. Look at the numbers by comparison. If, you know, if you're, if you're a, a college student or a college student-to-be and a family member, would you want to send your student to a college that had 500 graduates in business marketing, or one that had a tenth of that? And you can look at that across all of these programs on the side to make those decisions. If it's health professions, you know, that was health professions. Look at Pace University. Matt referenced their health program growth. You see it right there. Yep. And then I want to quickly look at Pace individual profile for both our bachelor's and master's. You can pause the video if you'd like to look at this more, more closely, a little bit longer. Look at where they're strong. On the bachelor's side on top and look at whether less than strong or strong on, on the graduate side. And it's, you know, again, for students looking at these colleges, if it's biology, you know, might— there might be better options than Pace University for that bachelor's, that master's degree in biology. And then lastly, I want to look at Ithaca, same, same report. And again, I'll just leave the screen there. You can see where they're strong. You can see where they have just token amount of students. And again, those students, Matt, all pay tuition and revenue, I understand. But you really want to, you know, do you want to send your student to a college, to a student, to a college that only has 5 math and science completion programs? Or do you want to send your student to one that has 50 or 500 or 5,000, if there is such a thing? So we had a really top-performing college in Pace. We had Ithaca, who's going nowhere but your data. And mine as well show opportunities there. And then due to my not realizing Alliance had closed, we looked at a closed one, but it had value in reinforcing that what we're doing really echoes what is happening in the market. And the data we use is much more recent, Matt, than what the accrediting agencies are using. The Department of Education is using. What are your thoughts on comparing what the creditors do and what you and I are doing?

Yeah, I mean, I think, so like I said, I'm always surprised when I go to the data. I was looking at Pace and I was like, wow, their net tuition revenue grew a lot. I was expecting to see, you know, solid growth in undergrad enrollment and found the opposite, right? And it's really graduate enrollment. I mean, every story is different. I do this, I mean, I've made hundreds of these dashboards now and I always find stuff that I don't expect to see. But one of the things I do see a lot is just variations like that where I, you know, that example where I showed you, uh, Sacred Heart, you know, further away from New Jersey and somehow they've captured market share in New Jersey. What did they do? Like, those are things that I see in the data every day and I'm like, what did this school do to capture market share there? Maybe they don't even know, right? But I mean, those are the questions we need to ask and maybe they need to, you know, use these apps to figure out what questions they need to ask. Like maybe they need to ask the question themselves. How did we get so many students from New Jersey all of a sudden? And it looks like to the dismay of Pace potentially, right? Some of those students may have gone to Pace and now they're going to, uh, you know, Sacred Heart or Fordham. Um, you know, is it as simple as you just lost, you know, a really good recruiter that used to work in New Jersey or you got one or what happened? Um, why is our, what's happened with our yield rate? You saw Pace's yield rate is terrible and obviously it's a good school, man. All these graduate students are going there. So are they just doing a bad job of selling it? Is the price too high? Those are questions that can be answered. Just need to dig more into their data. Yeah. Clearinghouse data is perfect for that.

And, and, you know, and we don't have access to that. So we're, we're using that.

Yeah. I've tried. I've tried. And if you're at the Clearinghouse, you want to partner, let's, let's do it. Yeah.

True. Yeah. There's those, there's other ways we can use data to help you out. So, Matt, we're in New York this week. You know, we, we drove up there. No, we did New York virtually. We had a user request this week to go to Virginia. Would you be willing to go to Virginia with me next week? Yeah, absolutely. Now, I haven't put a list of colleges, and we usually typically do just 3 because of the time required to do the in-depth analysis that Matt does and then the overview that I do as well. So we're going to Virginia next week. We'll certainly list those colleges in advance of our show next week. And I say it every week, Matt, we're in the Moneyball era, sir. And we are using data just like every other business industry there out there is. I worry, Matt, that we're one of the few that use it to the extent that it could be and should be used. And that's to the detriment of not just the colleges— it is for sure— but to the students and to the families and even the communities that these colleges pretend to serve. If you don't have the finances, you don't have the future. So college leaders, look at the data. Reach out to us if you think it's not right. Well, It's your data. It's your data. It's coming from your financial statements. It's coming from your iPad submissions. It's coming from your 990s. We just take a different look at it to help make this market more efficient and more effective than it is today. So for Matt Hendricks, I'm Gary Stocker. As always, we're grateful for you making time to join us. We'll be back next Tuesday morning at 10:30 Central Time with 3 Virginia private colleges. We'll look forward to speaking with you then.