This Week In College Viability (TWICV) for July 14, 2025

It is This Week in College Viability news and commentary for Monday, July 14th, 2025. Hi everybody, Gary Stocker back behind the microphone on this warm Monday. This is the podcast that talks about the financial health and viability of public and private colleges with the data, details, and perspectives offered really nowhere else. And what are we talking about today? More layoffs and cutbacks. We're going to look at a couple of colleges with accreditation updates. You normally think those are going to be bad news, but not necessarily the case today. And stunningly, Pennsylvania's 14-campus higher education system is piloting plans to allow students to access courses beyond their home institution. I should have entered a sarcasm alert on that. What a stunningly novel idea. The tuition discount rate hits another high. It does that year after year. That's of course Great for the students, much less great for the colleges themselves. And Ryan Craig at Achieve Partners talks about, talks about the bad day that graduate programs had earlier this month, and I'll go into some detail on that. And hey, make sure to share the podcast link with others. No sense in keeping this news and perspective commentary all to yourself. Share the podcast with others. I will be grateful for forever. Layoffs and cutbacks. St. John's College reduces staffing by 5% amid enrollment decline. We see this week after week. The enrollment decline will continue. This is from Tori Newby at the Baltimore Sun on July 9th. St. John's got 5%, uh, and across both the Annapolis and Santa Fe campuses following a decline in enrollment. Utica University will cut $5 million from annual Faculty budget. This is Luke Ridell on July 1st at WKTV in Utica, New York. Now, a little bit of detail here. Dr. Todd Van Steele is the president of Utica University, and he announced that $5 million in cuts. And this is during some kind of presentation he did on his strategic vision. President Dr. Van Steele said Utica University is moving forward and we have a path that's going to keep us here in this community for many years to come. He goes on to say he acknowledged that the university has faced significant financial struggles. I'm going to talk about that in a minute. Enrollment is down about 1,000 students, $30-some-odd million deficit. And even though Dr. Fanestil said that the school has dramatically cut its deficit to around $500,000. I'm gonna have to see some numbers on that. That's a budgeted projection. I want to see what the audit comes out as for the 2025 budget year. Uh, to the data we go. You know me, to the data we go. The net income margin— we call it profit. Well, higher education doesn't call it profit, but that's what it is. The net income margin profit is below zero at Utica University since 2016. It dropped to a negative 23% in 2023. The endowment is below $40 million and has been for as long as I have on my data. The per FTE endowment is below the 25th percentile, so it's not just a low total number. They don't have much of an endowment per each of the students that they have. Now, it's— the endowment has grown nicely, but still way, way, way too low. The The net tuition revenue is down over the last 8, 9 reported years, I think it is. The net tuition revenue is down about $4 million to $52 million in 2024. The revenues are up, um, total operating revenues are down 34%, expenses are up 11%. 4-year graduation rate is, is up from 30% in 2016, but it's only approaching a mid-40% number, not that good. We talked about the enrollment a minute ago, and I looked at the pricing from vendors, and not bad. It's within the expected ranges. Their employee count is down about 500. Interestingly, contractors paid over $100,000 per year, on the high side, but it did come down quite a bit in 2024. Here's why I'm here. This is why I'm here. Utica University would not be on my list of consideration-worthy colleges today. Not today. I would want to see the results of the cutbacks, the financial results of the cutbacks, layoffs, and other challenges at this college. So students, families, your call. Of course, your call. Use the data available here and on my College Viability app to see if a college like Utica University is one you are willing to bet on for your— with your college education. Page 2 Defiance College says the Higher Learning Commission has placed it on standard pathway in accreditation cycle. That's, that's not an emotional headline. The college said the pathway will ensure the institution meets the standards established by the accrediting agencies. I have no idea what that means. That sounds a little grandiose to me. This is from Carmen Ludwig at WTOL Radio. This was on July 8th. That's, that's— I don't know that ensures anything. It's a statement of where they are today. Let's look at the data. Defiance, Defiance College was on probation in 2023 from its accrediting agency, the Higher Learning Commission. The endowment is up $20 million. The net tuition revenue is— was $10 million in 2016. It's down to $6.5 million now. Not good. The net income margin is below zero in 8 of the last 9 years. The endowment, the endowment draw, you know, reading the piggy bank, uh, spiked to 12% in the past 2 reported years. That's rarely a good sign of financial health. Not spending much money on facilities. The CapEx, the inside baseball, CapEx to depreciation ratio is below— has been below 1 in 7 of the past 9 years. The revenue and expenses are a little out of sync, not a big deal. And you know what's coming next. 4-year graduation rates not even averaging 40%. 6-year rates, 6-year graduation rates not even at a 50% average over the last 8 reported years. But I bet you the good folks, the good folks at Defiance College have dotted all their i's. I bet the good folks at Defiance College have crossed all— oops, whoops, whoops. Sarcasm alert. I bet they've dotted their i's and crossed their t's, but not a strong financial profile. So hey, if you're an accrediting agency or part of a accrediting agency, reach out. I can get you access to better financial comparisons, much better financial comparisons than you'll ever see from the colleges you are accrediting. The next one is Houghton University accreditation reaffirmed by Middle States. This is the Olean Times on July 8th. I don't have a reporter on this one. Net income margin has plummeted since 2021, down from +6%— good, it's really good— to -19%, suggesting a lot of negative events there. The net tuition revenue is down 41 points, and the value is from $17 million in 2016 down to $10 million in net tuition revenue in 2023. I believe, um, the endowment has grown nicely, and it's at $69 million, which is above our the college viability minimum of $50 million. And the 4-year graduation rate is decent, really is really more than decent, is at about 60%. So, and the vendor comparisons, you know, there's some issues with their spending on custodial and maintenance and food service for most of the past years. So again, if you were at Houghton University and you want to cut some of your costs, drop me a note. I'll show you how to use the Advanced Financial Compass for private colleges, maybe get yourself some better deals on custodial, maintenance, and food services. They have some work to do. At Houghton University, but I, I have seen much worse. Gonzaga University. Alex Hernandez, July 10th, the Gonzaga Bulletin internal document. And this is kind of a day late, dollar short kind of story. So the current enrollment for the class of starting this fall is 1,150 students. The the first below 1,200 since 2020. All right, that's not that many years. And university leaders said this will impact their housing options, finances, and future promotion efforts. And this is from John Wheeler, who's Gonzaga's director of residence life. And again, the, the college, like most do, um, they say, hey, it's happening to everybody, that's why it's happening to us. Well, it's happening to many for sure. It's not happening to everyone. There are colleges doing well. There are many colleges doing well. So saying, hey, we're, we're having bad finances because everybody else is, it's kind of a, kind of a chintzy way of rationalizing what's going on. And, and this is from Mr. Wheeler. So this is John Wheeler again, the director of residence life. This is interesting. He said, I would anticipate seeing a concerted effort being made by the university to ensure that we have a larger class next year, okay, that we are not only accepting a standardized, standardized class, but that we will find a way, find a way— give me a dartboard— find a way to make up for this year's class size. All right, well, maybe, but we know it's a shrinking market. That's going to be tough. Many of our Expansion efforts, Mr. Wheeler goes on to say, extend beyond the 4 years and will not be affected by the unusually small size of this class. I beg to differ, because when you get one bad enrollment year, that bad enrollment year sticks with you for at least 3 more years and probably closer to 4 or 5 more years. And there's no guarantee that next year's number will be financially secure. Yeah, you may be able, you You may be able at Gonzaga University to enroll more students, but what do you have to do with your tuition discount rate? How much of the store are you going to have to give away to get students in the door? And then ominously, Mr. Keller says that the low enrollment will affect Gonzaga's finances, and that will need to be studied by the finance office. That's— if I'm at Gonzaga University, that's going to scare me. And Gonzaga— Keller goes on to say Gonzaga is considering different steps to maintain a strong position. Again, what does that mean, a strong position? This is an internal article, not, not impressive at all. Now, I'm not going to fault the reporting. I don't have any issues with that. But what the folks who are representing Gonzaga— that's scary stuff they're sharing. I I have some concerns. Page 3. All right, here's, here's one. So Pacific— University of the Pacific— the University of the Pacific is in strong financial shape. That's the headline. That's from Christopher— that's from, um, from the Pacific Online, and it's from the president, Dr. Christopher Callahan, I presume. And of course, you know me, if I see a headline that says it's in strong financial shape, I'm going to check it. And, and it is. It is. I have a couple minor concerns, but this college is in good financial shape. I'll have the link to the story in the show notes. You'll be able to go take a look at it in more detail. And the only thing I would look at is their 4-year graduation rate. It's a little weak, it's under 50%, and you know me and graduation rates. The contractors paid over $100,000— just those paid over $100,000 per year— is up a lot, quite a bit since 2021. That would concern me. And their unfunded institutional grants— that's inside baseball for merit aid and most scholarships— is up $36 million over the last 8 years. That's $4 million a year, give or take, to $100 million right now. Nothing, you know, colleges are certainly welcome to do that, but that's revenue foregone for lots of purposes. Let's go to Pennsylvania, and we've had Pennsylvania on the podcast, on this podcast, many times. And like I teased in the intro, Katherine Palmer had this story on Inside Higher Education on July 9th. Sarcasm alert, I'll give it in advance. They think in Pennsylvania, it may be a good idea to let students share courses that are not offered directly by the colleges they are attending. Good for them, go get them. So NIL— let's talk about acronyms. NIL Newswire. I pay for this. It's a college athletics newswire. NIL, of course, stands for name, image, and likeness. And Amber Coles, who's a freelance writer who is interested in learning more about the NIL, these name, image, and likeness classes offered at colleges across the country. That's right. That's right. If you didn't— you think you heard me wrong, Colleges are offering classes in name, image, and likeness, preparing students across a variety of majors, is my understanding, to understand what's going on with name, image, likeness. And they figured out they should probably tell me and others. Um, so David, David Maloney, Maloney, I believe it is, is an assistant professor at Syracuse, and his job is to teach students how to turn NIL, name, image, and likeness, into real income. All right, and there's more details to the story, and again, I'll have the show link, this, the link in the show notes. But colleges are now offering courses— nothing wrong with that— in name, image, and likeness— nothing wrong with that— for athletes, and of course for non-athletes as well, I'm sure. Anybody see where this is going? Anybody see where this is going? Yet another indication in my mind that sports rule, athletics rule, and academics drool in comparison. Page 4, Dr. Peter Khoury, July 9th: Stop confusing a zip code with a quality education. So Dr. Corey says the campus myth is already dead, we just haven't buried it. And he says, hey, let's stop pretending that residential education equals rigor. You got to be on campus to get academic rigor, educational rigor. And ask any undergraduate at any college, he says prestigious college, what they actually do during the semester. And they live in the learning management system. Students upload their papers online. Professors post readings and lectures online. Grades are calculated and communicated online. Group chats often drive more learning, he contends, than the lecture hall itself, the physical lecture hall itself. He goes on to say the residential experience students pay premium prices. This premium prices is really for what increasingly resembles online learning, all right, online learning with expensive real estate attached— dorms, food services. So they go to college to learn, to use, to take online courses while living on the campus, and they could have just as well done that anywhere else. And he makes the case the physical classroom— and he's right, he's not the first to have shared this— the physical classroom becomes little more than a scheduled Zoom hall with uncomfortable chairs. Okay, tuition discounts hitting an all-time high. It's up to 56% and change for new students, and I think something like 50%, up to 50% for existing students. That's where the market is. Again, like I said in the intro, good for students, really good for students. But not so good for colleges themselves, and that's not going to change any time soon. Wrap— let's do a wrap on this. Ryan Craig, again, I've had him, I've had his content on the podcast before, and his headline reads, 'Not the Best Day for Master's Degrees.' The story was posted on July 11th, and it's, it's the perfect story of how markets react And, and Ryan Craig talks about in 2006, that's when Grad PLUS loans, graduate PLUS loans, started. No caps, no limits on what you could borrow, what students could borrow. And so what do you think happened? Supply and price both skyrocketed upwards. And colleges know how to get your money. They're not going to be overt about that, but they do. And there's, there's nothing wrong in theory, and really even in practice, with wanting to generate revenue. We all try and do it, and we all make decisions about where to invest our time, talent, and treasures, as do colleges. But in 2026— and this was the new Big Beautiful Bill law signed, I think, on July 4th— in 2026, the undergraduate revenue gravy train will be leaving the station. And this is Gary Stocker speaking. We'll be leaving the station with not as much cash available to loan graduate students. Here's some background data from Ryan Craig. Since it started, graduate students now are receiving— this is 2006— it's grown twice as much since the launch. Graduate programs have gone twice as much. In the past few years, grad students received nearly 50% 50% of all federal student loans. And does it make them wealthier? Well, Mr. Craig says they do, but only marginally. Employment rates for graduate students in general increase by less than 1%, and while income grows for 3 out of 4 master's recipients But that does mean that 1 out of 4 would have been better off not taking time off for the work. It's, it's not much income growth, not much at all. Master's in, in the arts and humanities and even human services, sociology, those kind of things show minimal gains. And MBAs still only show a 9% bump. So do the math, make sure it's going to work. And again, before the Grad Plus program It was $33,000 to get that master's degree in whatever. What do you think the number is now? $70,000. $70,000. Mr. Craig writes, over the past two decades, as digital transformation and higher education's failure to keep up has increased 20-something unemployment and underemployment, grad school became the default, the path of least resistance, because they couldn't get jobs at the compensation level they wanted. And he continues, but adding $70,000, give or take, to an increasingly unsustainable college debt should never have become the path of least resistance. So the new financing barriers— he concludes, these new financing barriers will make young people think and think again before signing on to low return on investment master's programs. And so Ryan Craig adds, by subsidizing inefficient programs, the golden age of master's degrees from 2006 until 2026 postponed, postponed higher education's day of reckoning, the day colleges and universities will be held accountable, will be held accountable for the economic outcomes of their graduates. And with the disappearance of GradPlus next year, Ryan Craig writes, that day is near. So accountable for the economic outcomes. All right, sure, you know, let's take another look at that. And I've been here before and I'll be there again. Less than 50% of American college students graduate in 4 years. There is an economic reality that higher education is overbuilt, and I've talked about that many times. Too many colleges, too many degrees, not enough students willing to pay for any of that stuff. There are some for sure, don't get me wrong. The Grad Plus loans created an economic response that effectively made spending tens of thousands of dollars on a degree, as it happened, frictionless. Until those payments started coming due, it was frictionless. It is inevitable that the decrease in loan access for graduate degrees will shrink the number of students pursuing graduate degrees. And, and use my 2025 College Majors Completion app to see which colleges offered the most graduate degrees. They're going to be the ones, especially the non-selective ones, they're going to be the ones that are negatively impacted. And that negative impact could very easily trickle down to undergrad degrees as well. And this is just This change is just another financial nail, another financial nail in a dated and unresponsive higher education business model. There will be more closures. The period of closures will be followed, in my mind, by a period of rapid and substantial mergers. I believe sincerely and inevitably that these will be large-scale mergers, something like 10 or more colleges. And for those of you listening to that and laughing, that's fine, that's fine. I still believe that's the model because that's what we saw, that's what we've seen in other industries. It is, in my mind, an economic inevitability. You can say, well, Gary, there are a thousand details. Yeah, so are there a thousand times a thousand details to go to the moon and prepare for D-Day and for countless other human endeavors. It will happen. Hey, feedback please! Send it to me at gary@collegeviability.com. What you like, what you don't like, what you'd like to see added. And I'm going to come back on— that's going to be Monday, July 21st— with another podcast episode of This Week in College Viability. Thank you always for listening. We'll be back next week.