This Week In College Viability (TWICV) for November 4, 2024

It is This Week in College Viability news and commentary for November 4th, 2024. Let me see, that means tomorrow is November 5th. Of course, it's a national election day. All of us are heading out, if we haven't already done so, headed out to the polls tomorrow. I'm going to go there right after I get done recording the podcast. In higher education, we have seen an increasing number of students or non-students voting in a different sort of election. It's not an election really, it's a market, and I've talked about this before. And we continue to read and hear that more students are voting with their feet and dollars to stay away from a college education, and the reasons are too many to count. And the stories from this week's podcast continue to reflect that the higher education market is, is not what it used to be, and trauma and consolidation will be with us for a while. Let's start off with layoffs and cutbacks. Webster University, a frequent flyer on the show, leads off our list of topics today. Uh, free tuition and its burden on faculty and staff is another story I have lined up, and I'm going to help reporters They are scrambling to find data on colleges. I've got a tip for them. I want to share that. Tennessee State, uh, plummeting enrollment. I think it's down 50% just this year, but nobody is talking about the already plummeted 4-year graduation rates. There's another HBCU in trouble, that's Central State in Ohio, on Fiscal Watch. We'll talk about that. And somebody's trying to suggest that the cost of college is quietly going down. Not, is what I say. And we'll talk about that in context here in a couple of minutes. Frequent flyer Webster, of course, to close all remaining military campuses. This is from Monica Brodovich on October 31st in the St. Louis Post-Dispatch. And the story reads that Webster has operated as many as 42 campuses at one time but will gradually close the remaining 9 locations. Including one just across the river over in Illinois, Scott Air Force Base. Interesting sidebar to this story, and Webster's probably doing the right thing. They should have done that a long time ago. There's lots of reasons for it. As always, I will have the link in the show notes. Chancellor Tim Keene, relatively new this summer, I think he started as the new chancellor. He declined an offer from Webster of a car and the chancellor's house. This is where chancellors past have lived at Webster. It's actually a town called Webster Groves, a suburb of St. Louis. And he says, Mr. Keene says, I said we need to sell that house because I can buy my own house and we need the money inside Webster, Tim Keene said. Quite the populist approach. Kudos to Mr. Keene. Be interesting to see how many of the college presidents are doing that. I know I've heard of a couple. Couple organizations doing that. Webster— I'm sorry, Webster— the University of Akron faculty and staff reductions coming to the University of Akron. It is challenging but necessary change. Akron University— the University of Akron has 1,500+ full-time employees, which a little over 500 are full-time faculty. This is according to officials at the University of Akron, and the story comes from Andrew Kneiper. In the Signal Akron Education. He's a Signal Akron Education reporter. This was on November 1st, last Friday, I think. The university laid off faculty in 2020, cutting 178 positions, including 96 of those— 178, about half, not quite half, I take that back, a little bit more than half— including 96 unionized faculty, according to the Akron Beacon Journal. So So big layoffs didn't work just 4 years ago, and they're talking about having to do it now. This is, this is probably one of those increasing number of college scenarios where shrinkage, student enrollment shrinkage to a new size, and staffing to it accordingly is in order.

But no, no, no.

University of Akron President RJ Niemer might be Nemer Here's his quote: "I intend to take the University of Akron from its current flattening enrollment trajectory toward a persistent and manageable growth in our student population," Nemmer said in his letter. I presume that's to faculty and staff. So good luck, Mr. Nemmer, Dr. Nemmer, doesn't say. All colleges in trouble say we're going to grow our way out of this.

It can't happen.

There are not enough students willing to pay whatever discounted tuition you're asking. The market is still heavy on colleges and light on students wanting to go to those colleges, and the pressure on tuition and fees will continue to be intense. Let's go to New Jersey and Rider University. The headline reads, Admin announces no faculty layoffs. This is from Jake Tiger. Looks like it's an internal publication, maybe a student publication. Thewriternews.com is the website. The link will be in the show notes. Rider Provost Donna Jean Friedin said the analysis— of course there's no data in this story— the analysis showed that there would not be significant savings by eliminating programs and laying off faculty.

This is Donna Jean Friedin, the provost at Rider. Instead, she said, the university will look to optimize existing programs and courses with low enrollment. So the solution at Rider University appears to be, let's not do anything and see what happens. Let's not do anything and see what happens. And what does it mean, looking to optimize existing programs and courses with low enrollments? Of course, consolidate. But because the story offers no estimate on the budget shortfall, it's tough to gauge how many courses, how many sections of courses would need to be consolidated, and anything close to the savings associated with those consolidated courses. Here's my guess: it won't even be close to being materially significant enough to substantially impact the budget at the University of Akron. And by the way, this is, this is a faculty with a two-time no-confidence vote for the right of President Gregory DeLamo. And let's go to the college viability and the prospective data science visualizations. From 2015 to 2022, enrollment, FTE enrollment is down 20%, 800+ students. They've got a decent 4-year graduation rate at the university, at Rider University, about 55%. It's still another one of those— St. Louis U and others we've talked about— they're graduating students, not a great number, but better than most. And they're still having financial troubles. There's something that I'm missing there. Tuition and fees down $26 million, that's about 25%.

The technical term, unfunded institutional grants— you and I know that as merit aid and most scholarships is up $14 million over the last 8 reported years. That's up 26%. Total revenue down— total revenue down at Rider University, $30 million. Revenue down $30 million. Total expenses flat. From Matt Hendricks and his Slash Research site, since 2016, total operating revenue at Rider University is down 14%. Operating expenses, total operating expenses down only about 5%. We saw that from before. Net income, net income at Rider University is lower than a set of 9 recently closed colleges that Matt includes in his visualizations. Operating cash flow is lower than a set of 9 recently closed colleges. They don't have any dollars at Rider University. Endowment draw is up. It was over 8% in 2023. That's high, and it has consistently been above the 75th percentile of peer colleges. This is again from Matt Hendricks, Perspective Data Science Visualizations. Been above the 50— above the 75 percentile. And for those that didn't pay attention in math class, that is not That is not good. Interestingly, their cap— their capital expenditures, uh, to depreciation ratio was strong from 2019 to— from 2019 to 2021. There, there must have been building things or fixing things, but it was below the threshold of 1.0 in the other 5 years. And Matt and I talk about that threshold on our weekly The College Financial Health Show on Tuesdays at 10:30 Central Time, live. Their endowment value growth is a little higher than the median. I guess they can hang their financial hat on that. And, and so, sarcasm alert, turn the volume down for a second if you don't want to hear this. Sarcasm alert, clearly no action needs to be taken at Rider University.

John Stevens is the president of Stevens Strategy, his own firm, and he published something on the, during the week of October 28th on LinkedIn.

And the news is essentially to attract students. 3 New England colleges have pledged free tuition, and I won't give the name of the colleges. It'll be in the show notes. You're going to get the link. While these initiatives— John Stevens talks about— while these initiatives present valuable opportunities for students to pursue higher education free, and we've talked about this before, free tuition isn't cost-free for everyone.

What they're seeing here in New Hampshire is students taking up the colleges on their free offer, and it's having a negative impact on the operations.

Here's why.

There's the influx has exacerbated long-standing issues. Faculty and staff at these colleges in New Hampshire report being overworked and underpaid. Well, all right, we all do. In fact, so he says, John Stevens says, in fact, full-time teachers at a Cape Cod community high school, I guess, yeah, would earn nearly $18,000 more annually than they would teaching in the college districts in New Hampshire. And John Stevens asked what additional factors should be considered.

I'll give you one.

I'll give you one that John doesn't talk about. Graduation rates will plummet. You get what you pay for, and if you're paying nothing, then what's, what's your proverbial skin in the game? These students will start to have a rough patch for whatever reason, they'll bail, and the already pathetically low graduation rates will plummet even more. Faculty will leave, and replacement costs for those faculty that do leave will increase labor expenses, and in due course In due course, the governing bodies of these colleges will say, "No más, no more. We're not doing this anymore." Page 3, reporting on college finances. Now, this is for reporters. This is a story by reporting on reporting organization's website for reporters. And amid enrollment declines and college closures, higher ed experts provide tips on following the money.

Now, this is for reporters.

And it was from ewa.org, and the name escapes me. The link will be in the show notes. And I've seen these reporter assistant stories on occasion, and like this one, they offer basic assistance that require both a lot of work and quite a bit of financial knowledge from reporters. So for my thousands of listeners, I need your help. If you're listening to this podcast, and there are many of you who do, I, and I've made this offer before, and I'm going to do it right now in this podcast. If you are an education reporter for a major metropolitan, for a minor or less than major rural publication, if you're an education reporter for any news organization and your email domain suffix confirms that, I will send you a professional courtesy link to the 2024 Private College Viability App. Free. It's $1,500 for others. And even though it's currently free, I'm also gonna send you a link to Matt Hendricks' visualization tool. I talked about that earlier, and I'll be talking about that a lot more. And it's easy to use and has a built-in comparison. Matt's tool has a built-in comparison to a set of colleges that have already closed. So you can compare whatever college, the story you're working on, to a set of colleges that are closed. And by the way, my next project today is actually to set up a webinar series for reporters to show how to use these tools. There'll be more of that in media and on the website and those kind of things. If you're a reporter or if you know a reporter, this is an open invitation. If they don't wanna wait for the webinar, have them drop me a note at Gary, to gary@collegeviability, college viability, one word, gary@collegeviability.com. Tennessee State University faces urgent financial crisis, implements immediate cost-cutting measures. This is from Aaron Cantrell. It's back in mid-September on News Channel 5 Nashville.

And 50% drop, I think, was the tuition— was the enrollment drop just this year at Tennessee State. And the story reads, well, effectively, that there was a— there was $72 million in net tuition revenue reported in 2022. And a little more than half of that was COVID funds. So when the COVID funds went away in 2023, the college needed— it sounds like needed to apply a higher level of discounts in both 2023 and 2024 to match whatever that net cost had been to students that used those COVID funds back in 2022. So here's— I have the same question. But I have asked many times for many other colleges, why did they wait so long to react? Was this yet another, another example of short-term thinking by college leaders and their boards? To the data we go. Enrollment down 1,000 students, 15%. This came from 2015 through 2022, the last reported data. The 4-year graduation rate is below 20%. They didn't even report the admissions yield. That's always a negative indicator. Tuition and fees are down $19 million. State appropriations are up $20 million, so kind of a wash. Total expenses up 20%, $39 million. And total operating revenues down $7 million. Who's watching the checkbook at Tennessee State University and other colleges like this? And yes, a college education is good. I'm going to wrap the podcast up with that today. But you have to make sure that more— you'd like all the students to graduate, but more of them are graduating. You have to make sure the students you're scrambling to get into your college can graduate. I've said this before and I will continue to say it. The focus is on enrolling in this industry, enrolling students at any cost. The focus, the public focus, is not on graduating students. All last week, the data came out from the National Clearinghouse that enrollment was down. The numbers vary, but I'm going to use 10%. This is from Laura Spitalniak in Inside Higher Education. Yeah, I'm sorry, from Higher Education Dive, Higher Ed Dive, on October 31st. And, and read the story, the link will be in there. There are lots of stories about that. But let's, let's remember something that Matt Hendricks talks about, and this isn't— this impact just isn't for one year. That lower enrollment, whatever number you attach to it, it's a 4-year impact. That those colleges whose enrollment has dropped It's not all of them. Some have had increased enrollment. But for those colleges whose enrollment dropped, they're living with that for 4 years. And it drops again next year, another, another year on top of that, 4 more years. And then an interesting side note: in October of last year, the National Clearinghouse researchers initially estimated that first-year enrollment had declined, had gone down last year, October of 2023. By 3.6%. However, when researchers published the final results in January of this year, 2024, they found it instead had ticked up 0.8%. I can understand a minor change in a short period of time. I don't, I don't get this. I don't know what the margin of error is on this kind of research, but more than half of colleges have reported their data already. It can't be that big of a change. And so sitting here in my rainy office, in a rainy day here in St. Louis, it's not raining in my office, sitting here, one has to wonder if in 2024, early this year, someone wasn't putting their finger on the final enrollment counting scale. We'll have to see if that happens again in January of 2025. Page for yet another HBCU historically Black university. Central State University on fiscal watch. All right, it's working to get its finances in order under the watchful eye of the Ohio Department of Education. This was from Sarah Weissman on October 30th, and she writes for Inside Higher Education. And deservedly, Central State University needs to be on fiscal watch. Here's my question: why isn't it on graduation watch also? Here are the last 8 reported 4-year graduation rates. The last 8 reported 4-year graduation rates at Central State University in Ohio. Here come the numbers: 6, 10, 10, 11, 15, 14, 8, 15, Huh. They're not graduating anybody.

So what is the state of Ohio trying to save?

It certainly can't be the students.

Hardly any of them graduate.

Maybe it's a job-saving effort for faculty and staff. All right, they're entitled to try and do that. But if so, is anyone interested in trying to save those jobs? Are they gonna try and hold the faculty and maybe even the staff accountable? Accountable to graduate at least something close to half their students. The average here might be 10% over the last 8 years. 1 in 10, 10 in 100 students who started at Central State University in Ohio graduated 4 years later from Central State. And it's, it's, to me, it's like the old mud analogy.

Throw enough mud at a wall and some will stick.

That appears to me what to be the model that is available in too many colleges.

They're throwing enough students through massive efforts to enroll them, they're throwing enough students into a classroom and knowing some will graduate. Not a good way to run a show. And this is yet another example, yet another example of higher education hiding its dismal ability to graduate its students. Nowhere do I see reporting on colleges that don't graduate students. Enrollment is always a big news item, up or down, but not the tuition revenue that follows it. How much discounting does it take to get somebody in the door?

We talked about free tuition earlier.

Does it have to go that low? Diversity is always a big news item, but not anything about the graduation rates associated with it. And I'm unaware of any college saying during their graduation ceremonies that the graduation rate ticked up from 38 to 44%, both miserable numbers. None of that is announced during graduation ceremonies because they're hiding that pathetic number. The focus is on enrollment. The data shows that clearly, not on graduation rate. And look, I am rarely, if ever, rarely if ever the smartest guy in the room. If I can make these rather easy observations, how many others are doing likewise? And then a quick note on a final story, and I talked about this in the lead. The cost of college is going down, reads the headline. This is from Lexi Lonas Cochran from The Hill on October 29th. Well, okay, if you want to make The argument that the cost is going down— again, the link will be in the show notes, you can take a look at it— but it's, I don't, it's not market pressures, it's not colleges lowering the cost. It might be marketing pressures. It is tuition discounting. It is tuition discounting in the form of merit aid and most scholarships. And I've talked about this countless times, and that's good for students. That's really good for students. It's not universally good for the colleges. It's supply and demand that is keeping prices low, nothing colleges are doing in my mind. And let's wrap this one up with a story by Jeremiah Poff, and this was in the Washington Examiner on October 29th. The higher education bubble is finally bursting, finally bursting, and stories like this pop up on occasion. I wanna give Mr. Poff his time because he makes an argument worthy of consideration. And I'm gonna read just 3 paragraphs from his story. As an institutional force, higher education has never attempted to grapple with the fact that it is profoundly and dangerously out of touch with the average person. Yet it has pushed more and more people to attend college. This is what I've been talking about.

It has pushed more and more people to attend college by declaring a 4-year degree, excuse me, a 4-year degree to be the only path toward a successful career. And in doing so, it has managed, as an industry, managed to rake in billions of dollars from students and taxpayers. It has raised its prices while alienating its possible customers. The sustained enrollment decline, Mr. Poff continues, of recent years has created a 5-alarm fire for the higher education establishment because it threatens its financial stream and its status in the national psyche, which he goes on to say has largely accepted as gospel the notion that a college degree is a surefire ticket to success. We know that's not the case in too many instances and should be pursued by all, and clearly not the case. Mr. Poff continues, with fewer students going to college, higher education status as a defining cultural and economic force is in danger. And finally, the shriveling and shrinking of the higher education bubble will take several more years. I'm not sure it'll take that long, but something like that. However, if fewer students go to college, Mr. Poff writes, if fewer students go to college, more high school graduates will be free of the shackles of student loan debt. And he has a suffocating political agenda. All right, we'll give him that. That has infected the campus quad. He concludes with, the nation will be better off for it. Well, probably, but let's close with the College Viability Manifesto. And I bring this up from time to time.

This is something I wrote a couple years ago.

College is good, really good. Go if you can. Graduation is better than just going. Number 3, colleges. Some colleges will survive. Most colleges will survive, but many will not. And only consider colleges in comparatively good financial health. That's why I'm here.

That's why Matt Hendricks is here.

That's why many other higher ed data entrepreneurs are out there saying, hey, choose wisely. There are colleges not worthy of your financial investment for a lot of reasons. In their college. Number 5, your FAFSA.

If you can get it done this year, your FAFSA tells colleges about your finances.

The College Viability App— and yes, I wrote it, that's my product— the College Viability App shows you the college's finances, shows you theirs. Enrollment trends matter.

Graduation rates matter even more.

Popularity indicators are important. It's technically—

it's called admissions yield.

Choosing a college that closes— closing colleges will cost you a lot of money. And finally, support higher education.

Support higher education in the United States. It certainly makes a difference in lives.

Until next Monday, thanks for making the time to listen. I'm Gary Stocker for College Viability. I will be back next week with more higher education news and commentary. We'll talk then.

Take care.