The College Financial Health Show with Matt Hendricks & Gary Stocker for August 27, 2024

It's the College Financial Health Show with Matt Hendricks and Gary Stocker. Each and every week we join you on Tuesday to talk about the financial health and even the viability of private colleges throughout the country. We share data from multiple sources and offer our analysis, our recommendations, and don't tell anybody, but we even offer our opinions some of the times. And the value, the value of the show is for college leaders, for boards, certainly for faculty members and staff, certainly for students and their families and banks and consultants, insurance companies, really anybody looking at the financial health of colleges. You want to listen to the data that Matt and I share. We review a set number of colleges each and every week. Hi, my name is Gary Stocker.

And I'm Matt Hendricks, founder of Perspective Data Science. This week we're looking at 3 schools in Ohio. Those schools are Kenyon College, Defiance College, and Wittenberg University. The takeaway from this, we're going to bring in new stuff today. So one of these schools is doing very well financially. That's Kenyon College doing fine. And it's nice to have that example to see what a good benchmark looks like. And the other two are struggling and they are covering their losses in similar ways. They're both drawing extraordinary amounts from their endowments. And it's going to be interesting to watch these schools because neither of them can do the same thing in 2024. So when their 2024 audit comes out, neither of them— if their deficits were the same as they were in 2023, they can't cover the cash deficit using the same strategy they did in 2023 because there's not enough cash left. So it'd be really interesting to see how they made it through fiscal year 2024, if they were able to sort of narrow the deficit or what. But I'll show you those cases. Something new in this episode, both the schools that are struggling are getting flagged by their accreditor, HLC. One is on probation and the other has been reaffirmed accreditation but with monitoring, which is a very important thing to watch for. And monitoring involves watching how they're budgeting and assessing new program viability and things like that. So I'll, I'll show you that as well. One other new thing I'm going to bring in too is the FAFSA submission so we can get a sense of what most recent enrollment looked like for fiscal year 2024 because we have that already. All right, I'm going to share my screen and show you guys the financial benchmarking app that I've been using every time on this show and start with Kenyon. And this is the easy one, right? This is a school that looks great. And I'll just emphasize what it looks like to look great. So Kenyon's in blue. I did change the app a little bit. This red line now represents— is the median of these 9 closed schools that closed in 2023 and 2024. I added them to this graph to just give people a better reference of what really bad looks like. Don't want to be close to this red line, certainly don't want to be below it. And you can see Kenyon had The COVID year was an anomaly for them. That could be up with the timing of when they actually got the CARES funds, CARES Act funds. But really, they look fine. All of these are, you know, on average, their net income is very good and very high positive cash flow. It's interesting, this school again is one of those schools that pulls their endowment draw out of the cash flow. So this cash flow is actually fine. Um, when you look at it. Double-check, this is Kenyon. All right, and same with— so again, they have a really big endowment. And the thing I look for here, again, I'll move this to the top of the screen for you guys to see it better. One thing that you really want to watch with your endowment is you want your endowment to grow faster than your expenses. And that's what the typical school does, right? You can see the median, uh, the median endowment to expenses was 0.911 in 2017. In 2023, it's over 1 now. So the most schools are doing this right, right? Like, not drawing too much from their endowments, contributing, um, and letting their endowment grow relative to inflation and their expenses overall. And Kenny's doing that too. This is great. Uh, that's perfect. And they have a big endowment. Um, their, their appropriation was a bit high, now it's normal. That's perfect. And investments Looks like they shrunk a little bit relative to their expenses, but I'm not worried about that. Their endowment's growing. Cash looks good, and they have a high debt-to-revenue, but again, this is a school that can carry more debt. They have a lot of assets, and they have a balanced budget, right? So, and no issues there. So that's Kenyon. That's a good story, right? The school's looking great in Ohio. All right, here we're going to start with the bad. Starting with Defiance College, take you through the numbers here first. So Defiance, again, the blue line, and notice how many times they're below the schools that have recently closed, including right at where the 2023 number is. This school has been struggling for a long time, and their accreditor has been flagging them for a long time as well. And before I get into that, let me just show you how they're covering their, their deficit here. So big losses in '21 and '23. This is a school also that does their accounting a little odd. They don't pull out the operating revenue, so they have a big positive here. That's potentially because of investment returns. I didn't double-check that, but if you look at the cash flow, you can see a better, more smooth picture of what's happening. They're just descending into closure zone. In my opinion, this is a huge cash deficit to make up for a tiny school. Um, and okay, so the way they're making it up is you can see clearly, uh, in 2023 they drew 13.4% from their endowment. So that's how they made it— made up for it. I'll just give you the actual numbers from my notes here. Um, they had a $4 million cash deficit from operations in 2023, and the way that they, um, they made ends meet was to basically draw all of that money out of the endowment, which was an over 13% draw. The problem they have now is that their endowment shrunk by 15% in one year, even though the market was up. So that's a problem. But they don't have much room left. They only have $2.2 million left in their unrestricted endowment funds. So that was what I was talking about at the top of the show is like they can't fiscal year 2024, if they have another cash deficit of $4 million, they clearly can't get all of that from their unrestricted endowment funds. They're going to have to do something else, probably borrow from their restricted endowment funds or borrow from a bank if they're able to, which is a big if. So again, this is totally not sustainable. Actually not clear to me how they actually are going to make ends meet in 2024, but it'll be really interesting to look at this 2024 audit when it comes out in a couple of months. Okay, so I want to say I want to talk a little bit more about their interactions with HLC because this is really important that people track and I don't know if people are doing it. So, but you can see their HLC history here. So, so they started having and getting dinged by the HLC back in 2017. They, they were initially approved for accreditation in 2017, so their review was completed, but they were given a monitoring tag. And what they were going to monitor, I'm assuming, was the financials because they were, they were showing deficits back in 2017. And so you can see again, they did an interim report probably saying, you know, our budget is this and we're doing better. And again, was approved, but with monitoring again in 2022 monitoring. And during this, as you saw on the graph that I showed you, their financials are declining, getting worse and worse and worse. Finally, in 2023, in June, HLC placed them on probation. And so the probation letter is very informative. And so this is why they were placed on probation. They don't meet core component 5B, which is basically having a budget that works, right? That doing proper budgeting. And you can see what they actually flagged here. And this is really interesting to see because there's a team on the ground from HLC and they'll get more inside information than we can get and on the show, right? But basically, it's really, it's really revealing. Look at what they say. The institution lacks a budget strategy and plan that is informed by enrollment data. That is pretty striking. The school's been around how long? Hundreds, over 100 years.

I mean, I can check, but it's been around a while. Yeah.

Yeah. It's pretty amazing to not have a budget that's based, you know, these are, a budget is a forward-looking document. If you're not including you know, what you expect your enrollment to be. It's interesting. I'm not sure if that's exactly what they mean by this, but as well as an understanding of its current fiscal capacity or whether it shows a pathway to a balanced budget. That is revealing, right? Basically, HLC is saying that they don't really have a workable budget that's based on realistic assumptions. So that's what it looks like to me. So that's very interesting to see that coming from HLC. But one of the questions I have, Gary, and Um, maybe you know more about this, but why then would they— this has been going on for a long time. I'm sure it wasn't this final 2023 review when they finally decided to put them on probation. Why all of the years of reaccreditation with monitoring? It just seems like they weren't listening, right? Perhaps. I mean, I think that's what I'm seeing there, but yeah.

And I think we— it's not just Defiance College that we see this. At, Matt, and you and I have talked about this both on the show and off, off the show. Many colleges don't have the systems and processes to do exactly what Defiance cannot do either. It's, you know, we had a pandemic. This is endemic in that too many colleges are trying to fight a basic economic market with too many colleges, too many college seats, and not enough students willing to pay for them. And they think that they can create programs, they can find marketing genius to get out of it. But at the end of the day, look at the data you're showing. Matt, and we see this time after time after time. And I think that's one of the valuable services you and I and others are providing. We're looking past the college spin machine, if you will, and looking at the raw data, and we're saying, is it sustainable or is it not, or is it too close to call? Defiance isn't the only one, Matt.

Mhm. Yeah, one last thing I want to show on Defiance is this probation letter came out in June of 2023. Um, we do have some information that's happened since then, and that's why I wanted to bring in the FAFSA submissions, um, because this is a really early indicator of what their enrollment's going to look like. Every student, um, most of their students will submit a FAFSA, uh, including returning students and so on. And so getting a sense of how many FAFSAs were submitted to Defiance for fiscal year 2024, academic year 2023, 2024 after this probation is informative. So here's a graph I put together showing their FAFSA submissions, and it probably tracks quite closely with their overall FTE enrollments or headcount. At least you can see they're placed on probation when their enrollment was probably okay. I mean, it's definitely better than, you know, COVID in the years leading up to COVID. But notice what happens right after the probation.

Yeah.

Um, so this is the, this is the thing I worry about with school like Defiance is they're already bad, right? Fiscal year 2023 was really bad result for them. Um, worse again, or really close to what the schools that closed did in their final year of life. Um, and now they're following that up with probably a lower enrollment yet in 2024. So again, this fiscal year 2024 audit is going to be very interesting to look at.

So, man, let me jump in real quickly. I hate to do this. Where does this FAFSA submission data come from? I presume you'll use that regularly.

Yeah, I use this all the time now. It's from Student Financial Aid website.

Okay.

I think it's sfa.gov, actually. But so they have a couple of datasets. One is one you may see tracked every other week. It's a biweekly release of FAFSA completions by recent high school grads. This one's the other dataset, the second one. The second one, actually, there's a couple, but this one is looking at a little bit older, not the current enrollment cycle. The previous enrollment cycle is the most recent data we have for this, but it links. We can see where the kids are sending their FAFSAs to, right? Which schools they're applying, they're trying to enroll in, and they might send several, right?

Right, right.

But of course, a returning student would probably just send one to the returning school that they're going to. But, um, so that's where it's from. And so we get a sense of, you know, this is a really good leading indicator of what the, uh, the enrollment's going to be. Again, it's like 2 years ahead of IPEDS at this point, um, or at least a year. Yeah, cool.

Interesting. I look forward to seeing those.

Uh, all right, so that's Defiance. Let me see if I can go back to— right, yep, let's go back to Wittenberg now. Wittenberg, Wittenberg University, again in Ohio. And again, uh, just focusing on this first graph, the school, again in blue, um, deficits everywhere. Only one year where it's positive. And again, fiscal year 2021 really doesn't even count because they probably were only positive here because of the massive government grants that they got. So, um, basically you have a school here that's done far worse than schools that have recently closed in the 2019 and 2020. Um, and then, I mean, they did fine here, they got great results in '21. But '22, again, back to the same issue and then worse again compared to the schools that have closed. This is a 21% net income deficit. That's a lot. And I mean, it's one thing to overcome that in one, one bad year, but they've had several years of, of overcoming these, right? So the resources are getting lower and lower. And so that's one of the issues with this school again, is that It's covering its losses. You can see here again with the appropriations, it's covering its losses by taking massive draws from its endowment. Again, similar to Defiance, but doing it many more times. This school is another school again where there, there's not a lot of money left in their unrestricted endowment fund. So their next fiscal year, 2024, it'll be really interesting to see if they have a similar deficit, how they actually cover the cash requirements just to keep the lights on, right, and pay payroll. Um, they may again have to borrow from their restricted endowment funds or something like that. So it'll be something to keep an eye on. Um, and this is another school, um, I'll kind of bring you through the track record. Is really similar with this school. Um, I believe again 2017, I can show you, just give you the track here before I go to the other one. But 2017, again, approved for accreditation but with monitoring. And I can show you what their monitoring was. Again, budget issues, right? And that's when they were doing relatively well. Uh, then things just got worse, right? Again, monitoring, monitoring, monitoring. Um, I suspect they— I mean, it's, it's just shocking to me that they haven't been placed on probation yet. I'm sure, uh, HLC may make a move now, but I mean, this is a very dire situation now at this point to get to this, uh, number of -21%. Um, let me show you what the HLC said back in 2017, and I have more things I would like to ask Gary about this. Um, so this is just what I just said. So they're approved with monitoring, approved with monitoring. So here's what they said why they were put on monitoring. Um, they wanted to verify that the financial resources have stabilized. That was in 2017 when I show you they're actually doing quite well compared to today, right? So clearly their resources have not stabilized. They've actually gotten much, much worse. And look at the next one. They want to see correct enrollment management projections. What does that say to you, Gary?

Well, you got a dartboard, Matt.

Yeah.

Because, because this, when all, when the, when the, in my experience, and I've got a little bit of it, when these accrediting agencies, HLC and the other 5, are looking for progress reports, it's a one-way report coming just from the college. The HLC says do 20 jumping jacks and the college says we did 20 jumping jacks. And so when they say look at enrollment management projections, the colleges, in my experience— and if somebody wants to correct me, feel free to drop me a note at gary@collegeviability.com— the colleges say we did this, the accrediting agency says okay, you're good for now. And then what happens to the Wittenbergs and Defiances and St. Roses and Wells College and Fontbonnes? They close. And you and I talk about it well in advance. Wittenberg is non-sustainable, right?

Yeah.

Defiance is not sustainable. When I do my data here in a couple of minutes, we're going to see the same thing. This, this reporting mechanism for the accrediting agencies does not protect the consumer, Matt. It protects the colleges. Is that right or wrong? That's probably beyond the scope of our discussion for today. But accrediting agencies do not protect consumers, that students faculty and their communities. Matt?

Yeah, there's one other thing here is really, really interesting to me is this last point they make on the monitoring clause. They want to see an evaluation of new programs for financial viability. And I double-checked, just did a quick Google search. They added a bunch of new programs between the time that they reaffirmed this accreditation in 2017 to the time that they needed to do their interim report, that they added data science, educational studies, justice, law, and public policy. So it looks like HLC is asking basically, have you guys done a viability study for these? Have you projected how much demand there's going to be for these programs? And I can just tell you from experience, these are not popular degree programs. Um, what I usually do with my analysis is check if they're missing programs like psychology. Finance majors that are always in high demand. And it's a big red flag if they're missing them. You know, it may be viable to add some of these, but clearly they're not doing their homework and producing enough evidence for HLC at least to be considered, you know, solid evidence that these are going to be viable. So again, another question to you, Gary, like clearly Wittenberg needed a president to come in in say 2019, look at this and say, we have problems. Let's just balance our budget and just be who we are. We don't have to try to grow and add new programs. And my opinion is a lot of presidents should just do that, right? Don't try to do anything fancy. Don't add new things. Just be really efficient and effective at what you do, right? You're a nonprofit. There's really no reason to try to grow. It's not like you have, you know, um, stockholders that want you to grow their dividend or something. There's no benefit for a nonprofit to growing other than your own sort of like ego.

Right.

So the issue I have is the question I have for you, Gary, is like you've worked with presidents. Why it seems like the last thing they want to do is what I just said. They always want to grow and add new things. And it usually, in this case, it's looking like it's not going to work out and actually may have led to their Closing, right? Like, we don't know yet, but they're in a bad spot right now. They added a ton of programs when, you know, that's questionable. What do you think, Gary?

Well, let's talk about the program piece first. And then I've said this in many media, and when you're this late in the financial game and you've heard me say before, Matt, when the last dollar is circling that financial drain, it's too late to start new stuff, in part because you're only guaranteed startup costs. Developing the program, hiring faculty, marketing that, marketing to the students. And even if you do it perfectly well in a booming market— and that doesn't happen here— you're looking at a, I don't know, Matt, 2 to 5 years of lead time before you generate significantly, materially significant net new revenue. It just doesn't work this late in the game. And I giggled at your comments, they're not even choosing the right courses. That's probably unique to Wittenberg. But the president thing And Brian Rosenberg wrote the book Whatever It Is, I Don't Like It. I think that's the right title, something like that. And again, I had him on my podcast quite a few months ago, and of course he was addressing faculty. And I think that's the big issue, Matt, with, with college leaders and their boards. You make any kind of change, you change the font on the business card for crying out loud, and somebody's going to protest. And you start talking about layoffs and cutbacks, and these college presidents are going to hear it, and there's countless cases of immaterial votes of no confidence. And they might have had that at Tulsa back in the day. I can't remember. So there's intense pressure under these college presidents. And so it's a cultural issue, I think, more than anything. You make good points about the balanced budget, but I think all of that trickles down from the culture of colleges over decades, if not centuries, of we don't do business, we just teach stuff. And now the proverbial financial rooster is coming home to roost, Matt.

Yeah. Yeah, I agree. I mean, but just because it's hard to do these things doesn't mean they shouldn't do it. I mean, but I think you're totally right. It is difficult to balance the budget and get everybody in higher ed on board. Although I, I believe that it can be done relatively easily if you just use data to do it. I mean, If your faculty aren't going to listen to data, then you have a bigger problem with your faculty than a balanced budget. Faculty are trained generally to respect the scientific method, respect evidence. And so just present the evidence and make sure it's well done, robust, and make decisions based on that. And I think you'll be fine. You won't get a no confidence vote in that case. So that's my advice. And it is hard. And I think that you're exactly right why they do it. And it's also, think about this. I mean, I'm an economist. I always think like people are very selfish, right? They do things that are good for them, may not necessarily be good for the college. I'm thinking of like a college president. Maybe I'm totally wrong with this, but doesn't it sound better on your resume if you put, oh, I added 10 new programs, enrollment, um, you know, I doubled the enrollment at the school I was at before. All this sounds really great, right? It sounds much better than, oh, I got to this school, which was struggling. I balanced their budget. I got them off probation with HLC. Uh, we did shrink, we continued to shrink, but we maintained a balanced budget throughout that. What do you think is a better pitch for your next job? I mean, I think that's—

I know, I know.

Um, so anyway, that's my two cents. Uh, I really wish that I'd be wrong, to be honest. But let me show you, um, let me show you one more thing here. So Wittenberg, again, same situation. You saw their really, really bad results in 2023. That's here with this FAFSA submission number where my little hand is. Yeah, it's gotten worse. All right. So I hope they're prepared to make very deep cuts and get this thing balanced or this school will be closed. In my opinion, they just need to— they need to do it now. And it's not just because they don't have any more time, right? They don't have— they can't just keep using their endowment to bail themselves out. Like I said, it's running out of money. So I'll leave it at that, Gary. I'll, I'll stop sharing my screen and let's see what you've got for us in your app.

So let's take a look, Matt, at these 3 colleges, these 3 private colleges in Ohio. And you can see on the right-hand side, I've got Defiance, Kenyon, and Wittenberg lined up on the 2024 Private College Viability App. This is the executive analysis version. And as always, let's take a look at enrollment. And when we look at the College Viability App, when we use it, we're looking at the last 8 reported years of data. You can see that on the screen, from 2015 to 2022. And we can see 2 of the 3 have had substantially decreased FTE enrollment, um, over those 8 years. You can see the percentage on the right-hand side. And then the argument that I make, Matt, to you and others is this is a trend. If your enrollment is down 30%, Wittenberg, over the last 8 reported years, don't tell me you can fix it tomorrow. And we just saw the FAFSA trends. That just reinforces what we're talking about. Defiance, the same thing. They're down 23% over 8 years. What did their FAFSA number look like for 2024, Matt? It wasn't good at all. And so that's the case that I'm making. This isn't Matt and Gary saying things just went to hell in a handbasket. This is a trend. I show the historical part. Matt is effectively showing us what the real-time cash position— Matt, is that fair to say? Cash position is of these colleges. And you heard him, you heard Matt say a couple of times, two of these colleges have non-sustainable paths. And in a minute, I'm going to give you my assessment from the historical perspective. Well, enrollment is one thing, and if you followed my stuff at all, I always go right to the graduation rates. I make the argument, Matt, and you've heard me say this before, if you can't graduate half of your students, 50% of your students in 4 years, you're nothing more than a coin toss college. And what we see here is, interestingly, is both Kenyon and even more interestingly Wittenberg are graduating at least half of their students. Now Kenyon is in their own universe. You know, if you want to look at a college that's financially healthy and doing everything right, Kenyon should go to the top of your list. If you're looking in Ohio or Indiana or Illinois, in those kind of states, they're just doing so much so well. Now they have weaknesses, and I'll talk about that. And when I look at program completions, but look at Defiance. I don't know what was going on back here, but if you average those, they don't even, Matt, graduate 40% of their students after 4 years. It's not a college. Defiance isn't a college. If you can't graduate 4 in 10, you're not much more than a tuition collection agency. So Defiance, if you can't graduate students, if you can't get tuition, if you can't balance your budget, find the light switch— it's over there by the door— and designate somebody to turn it off. Because folks at Defiance, that's where it needs to be. And we follow with not nearly the same depth that Matt does But let's look at the tuition fee revenue. Now again, tuition fees are a preponderance of the source of revenue for most private colleges, not all. And if you look in the far right-hand column, you can see over the last 8 years what the impact has been. And it confirms exactly what Matt has been sharing with us with his visuals. Defiance is down about $5 million, Wittenberg is down over $11 million, and Kenyon— God bless them, they're doing so much, so, so much right— is up $13 million and change. This is a reflection of what Matt just shared with you. This didn't start yesterday, Matt, did it? It started a long time ago, and we're just seeing the output of what's happening. It is a decreasing market. The FAFSA debacle is contributing to it. And Defiance and Wittenberg, if you've listened to our previous shows, they're not the only ones on our non-sustainable list. Ladies and gentlemen, boys and girls, it's going to get bad. It's going to get worse in the coming weeks and months. And from that, let's just take a look at one other item. I look at something called institutional grants, and it's kind of an inside baseball number, not nearly as in-depth as what Matt talks about. And I want to look at both versions of this. The funded version is the amount that a college has for a dedicated scholarship. And again, I tease Matt every week. It's the Matt Hendricks Million Dollar Business Scholarship. They use the— they use a percentage of that, 5%, right, 4 to 5%, to fund scholarships. And again, Kenyon is good, not great. Wittenberg, not what they want to be, but better than Defiance, who essentially has couch money in their funded scholarships. They've had one or two people donate $10,000 or $20,000, and 5% of that's not much. But what I really want to focus on is this unfunded institutional grants. You can also call it discounts. You can also call it merit aid. You can also call it most presidential scholarships are unfunded institutional grants. Now, to Defiance's credit, that's the only time I think we've said that today, Matt, they've worked hard to keep their unfunded grants essentially flat. They're not giving away merit aid to get students in the door. Well, we see that in their decreasing enrollment. We see that in their financials. But they haven't at least given away the store to keep the doors open. Kenyon, because they can afford it, they have gone from $24 million up to $46 million just to get students in the door. You know what, Matt? Doesn't matter. They're so strong financially. If that's their marketing incentive, go for it. Wittenberg— again, this is interesting. And for college leaders who think you can manage the tuition discount from $36 million down to $32 million, down $4 million, they recognized probably they were giving away too much to get students in the door. And what happened, Matt, to their enrollment? Plummeted. Yeah, it plummeted. So it's, it's almost a catch-22 when you're looking at these scenarios. That's why, Matt, I so fervently believe, and I know you do this too, that the data is telling us exactly what's going on. If you're a college leader, if you're on a college board, if you're a faculty, for crying out loud, and you don't have the app, spend a couple hundred bucks to buy the faculty version of the College Viability app. To see what's going on not only at your college but in your competitors as well. And I want to spend just a second looking at these colleges in Ohio and the program completions. This is a relatively new app that we have. This is for private colleges in Ohio. And I'm going to look at— I'm going to bring up biology, and I'm going to sort this by alphabetical. So we can look at Defiance. You know, they're not playing in bachelor's in biology. They're not playing in biology at all. Let's go down to Cannon. All right, they're playing in biology a little bit. They've got a few dozen students there. Let's go all the way down to Wittenberg, and again, they're playing in biology a little bit. Now I'm going to take this one step further. I'm going to bring up an Excel spreadsheet. Matt, don't throw anything at me. So what I've done here is I brought up Ohio Health Professions market share. Let me go back to the app and let's look at health professions for our three colleges. I'll sort alphabetically again. So we go to Defiance, and again, they're not playing. I don't know what they're doing. You'll see that here in a second. I— let's go down to Kenyon. Who stole Kenyon? Kenyon doesn't even have one for health professionals because they don't offer it. That's their choice, nothing wrong with that. And Wittenberg, again, not really playing in that, right? So when we look at those kind of disciplines, we can look at the, the spreadsheet I derived from this for health professions, and I've divided this, looks like, by bachelors and look at the big players in healthcare programs. This is one of the ways to use program completions to see who the big players are. And again, the big colleges— and these are both public and privates for that kind of stuff— but it's market share that determines whether you can really be a viable player and even a quality player on some of these kind of programs. So let's take a quick look at our 3 colleges. I'm going to right-click on this, I'm going to do a drill-through, I'm going to look at their bachelor's and master's And this will give us a quick view. And you can see Defiance really offers not much anywhere. They have such small numbers across the board, Matt, they can't be scaling anything to any significant cost savings, not generating any substantial revenue from any particular discipline. And they only play for the most part, looks like, in the master's degree in business, again with a, with a small number. Let's look at Kenyon for the same thing. And again, it's an interesting look Kenyon's not on this one. Um, I'll go down here. Look at Kenyon on this one. A, B, C, D for Kenyon. Look how successful they are with a limited focus. Now, Matt, this might lend itself to some of the stuff you've been talking about. They don't have much in biology, but look where they're really strong at. This is in the undergraduate degree. They don't even play in the graduate world. So this is a college who knows its niche, who has lived its mission, and is doing really well, as we've talked about many times. And finally, let's take a look at the good folks at Wittenberg. Let's drill through to their profile on program completions. And again, you know, maybe strong in business by comparison, but I know if I brought up their market share, it's minimal and really nothing substantial across any others. Although you add these up and that's a few hundred few thousand students, few hundred students graduating with bachelor's degrees in these topics. And they really, again, don't play on the master's degree at all. This combines to reflect, I think, Matt, what's going on with these colleges, um, at the program level. It's not just a financial piece. They've made decisions over the last many years on what to focus on and not focus on. And you brought up the point about adding new programs, Matt. I will offer it is a day late lots of days late and lots of dollars short to add new stuff, especially when you're in the poor financial position of Defiance College and Wittenberg University. So Matt, let me wrap up my end before I turn it over to you to wrap things up altogether. You know, when we're going to see colleges close, and it will start happening I think in October, and like I've shared before, I think it goes from about one a week— it's not quite one a week— to two or more per week. Starting in October as the FAFSA debacle hits and colleges realize they can't continue to pull from the endowment, as you've talked about. If your college is in this situation, here's Gary's opinion: do your faculty, your staff, your students, their families, and your communities a favor. If the, the, the historical trend that I show, if the current trend that Matt shows is not good, Let's move on. Let's move on. Again, I tease the light switches by the door. Matt, find somebody to turn it off.

Yeah. I mean, at least, at least I wish they would, uh, give a really great effort towards just right-sizing their operation that they currently have. Quit wishing to grow. Don't expect to grow. Expect to shrink and make your budget work with that. A lot of schools can make that work. I've seen schools that are plenty poorer than Wittenberg and Defiance have balanced budgets every year. Talk to those folks, ask them what their board does, what does their administration do to balance the budget on such a tight revenue source, right? And, and you can even see with Kenyon, I check their revenues, they move around a lot, but what they always do is move their expenses with the revenue. They're always keeping their expenses below the revenue. Just a bit. That's just good practice, right? It's probably a board that knows they're never going to approve a budget that's not balanced, right? And then they demand a projection that's accurate in the budget. Yeah, that's on the board. Demand that from your administration or you'll end up not having any control over your destiny, right? You basically have no idea where your financials are going to end up. and then you take a look when you get the audit in October and you're like, wow, we might have to close, right? Like, um, make some steps before that. Demanded balanced budget, make them do it. Um, and, and make, make them check in with projections throughout the school year. That's all I have for that, Gary. Um, soapbox speech there.

So go ahead and go ahead and close it out then.

Yeah. So, uh, thanks for joining us, uh, today. This is, uh, 3 schools in Ohio this week. Next, next week, we're not sure, uh, yet. If you have a request for a school you'd like us to, to talk about on the show, please reach out. We'll put our emails in the description for the— from this video. Uh, until next time, thanks for watching.

I'm Matt Hendricks, and I'm Gary Stocker for the Financial— the College Financial Health Show for August 27th, 2024. Let's do it again, Matt, next Tuesday. We'll see you then. All right.