This Week In College Viability (TWICV) for April 8, 2024

It's This Week in College Viability for April 8th, 2024. I have my total eclipse glasses right here by my side. I am ready to go. Good day. Hey, it's Gary Stocker back with another podcast episode of This Week in College Viability. And a couple headlines we're going to talk about. Northland College is going to hold some more bake sales to see if it can stay open. You should know there's a sarcasm alert with that. Mike Rowe of Dirty Jobs fame has a spot on today's podcast where he talks about colleges. It's not a positive development. And the United States Department of Agriculture loans are not all they're cracked up to be. And I want to talk about something I just started a month or two ago called the College Counterpoint podcast. And there's a president of a closing college talks about college closures en masse. Hey, let's get started. So layoffs, cutbacks, and closures, and Northland College closure status— it's still up in the air after an April 4th meeting. And this is from Austin Karusu from Channel 5 NBC News on April 5th. Two things I have about this, and of course the story is in early March Northland said it needed $12 million. Last week they said they got $1.5 million. And so on Friday, I think it was, they said, hey, we're going to extend for another 2 weeks to get to that $12 million. I did the math on that. We'll talk about that here in a second. But here's a couple of things I want to talk about. So this is from a student at Northland College, and she says— I think it's a female— she says, people are starting campaigns and spreading the word, mostly, comma, I guess. I've seen a lot of videos on TikTok an Instagram of students saying what it means to go to Northland and what Northland means to them, says a student. I think that this is really effective as it's a really special place and it's kind of indescribable unless you've gone there or been there. All right, I don't doubt for one millisecond that this college has made a life-changing impact on this student and probably many other students. But here's where the naïveté is involved. I read similar words and sentiments from students at almost every college that exists. We make our home our college home for a reason. We chose it. To this student and to all students, fall in love with any college that you want. That's part of the process. Just know, just know that in this day and age, some colleges, especially small ones that are not in urban areas, are at a substantially increased risk of financial distress and potential closure. And students, I'll take you back to my Econ 101 lecture. Here's why, and no amount of praiseworthiness for a college is going to change this economic fact. Here it is. There are too many college seats and not enough students willing to pay for them, period. Northland College's president said that the $12 million goal would get the institution through another year to find a more sustainable long-term goal. They raised, like I said earlier, $1.5 million from 900 donors. And why in the last month or last series of months, why is this just now critical? Who was laying down on the job? And let's do the math. $1.5 million from 900 donors in about a month. It averages to about $1,666 per donor. So 7,000— my math— 7,202 donors would be needed to get to $12 million. Let's divide 900 donors over the last 30 days. That's 30 a day. The university would need 240 donors per day at $1,666 per donor average to get to $12 million. Who, Who are we kidding here? The lights at Northland College are about to be turned off, fabulous place though it may be. And I guess, you know, in the spirit of that pronouncement, could we have someone, someone step up and offer to put this community out of its collective anxiety and flip the off switch? This is easily a double geesh. Mike Rowe. Business and Politics. On April 8th, the story is from Frida Powers. Mike Rowe explains how we're entering a whole new time of smart money as a path to prosperity shifts. All right, he's talking about colleges. That's quite the headline. And again, like always, I'll have the link in the show notes. And I'm going to quote a little bit from the article. This is from Mike Rowe, and he's talking about higher education. He says it's a bit like turning a tanker around. You're talking about perceptions and attitudes, stigmas, stereotypes, all sorts of things. People, he says, in a lot of ways need to be deprogrammed about this idea that the best path for most people is a 4-year degree. And he adds, coincidentally, the most expensive path. He continues that there are opportunities from trade schools. He's talking to community college, I think, in large part. There are opportunities from trade schools at a fraction of the debt And it's adding— he adds that this is a clear path to something that looks a lot like prosperity. He's talking about the trade school skills. It's— and this is what I thought was interesting— he says it's so expensive— this is Mike Rowe— it's so expensive that for as long as I can remember, we really haven't talked about it in terms of a purchase, college as a purchase. We talk about it in terms of an investment. We've always talked about it in terms of an investment. People, Rose suggests, people are starting to smell a rat there also. He thinks, and this is what I thought is really interesting, I'll quote him, I think more and more people are starting to look at the diploma on the wall and seeing it for what it actually is, which is a receipt. He added, Interesting. The diploma is a receipt for all that money spent and not an investment. He may be right, he may be wrong, but it's an interesting perspective and he does make some sense. There is some logic to that, especially for those who start college and don't finish. They don't even have the diploma on the wall. They don't even have a receipt for the money they spent to get to however many college credits that they did. It's just part of the continuing saga we see of the market in terms of folks like Mike Rowe, myself, and many, many others just raising doubt about that, the conventional wisdom that that 4-year degree is still the route to go. And the president next, the president at Manhattan College says, hey, Manhattan College is not closing. And this is from March 31st, the Riverdale Press, and Mac Olmsted All right, let's go to the data because that's what we do. Past years at Manhattan College: expenses up $8 million, tuition and fees down $1 million, full-time enrollment down 10%, unfunded institutional grants— you and I call those discounts or merit aid, many scholarships— unfunded institutional grants increased about $28 million. The 4-year graduation rate is not bad, better than most, at 60%. The endowment is decent and has been growing. The admissions yield is down 7 points. But here's the kicker, and it goes back to the first point about expenses up and tuition fee revenue down: the revenue-to-expense ratio is just a smidge over 89%. So for every dollar in expenses at Manhattan College, they generate 89 cents in revenue. At this meeting, President Milo Reverso of Manhattan College asked students to do some critical thinking and use common sense. The story adds that this was a request that was met with some boos. "You tell us," one student said, "you tell us to use our critical thinking. This involves taking in what is going on around us," the student continues, "what we as students have been noticing are large amounts of faculty leaving from top to bottom positions. They don't teach writing very well at Manhattan College. As students, we cannot fully feel comfortable in a classroom when our professors are leaving. Yeah, that makes sense. And those were educators who are not being let go but leaving on their own, the student added. And concludes, the same student concludes, using critical thinking, he was addressing President Milo Roverso, why do you believe that so many upper faculty and professors, those not being fired, are leaving? This is quite the spin. Milo Roverso turned the table, and I'm going to read the quote word for word. If you were president, what would you do to keep the doors open for the college? The president asked. If you're president, how would you have balanced the finances of the college? He's asking this of students. He's paid to do this. I don't know, is that dereliction of duty? It's something along those lines. I don't even know what that means. I don't even know what that means. After due consideration, I think I'll be putting out a fictional job listing, a fictional job listing for someone to step up take the job to turn out the lights at Manhattan College. It's probably sooner rather than later. Page 3, David Jesse at the Chronicle on April 2nd, and the headline reads, the $2.2 billion bet: a federal loan program meant to help rural colleges may be hurting them. So here's the essence of the story, and you've probably seen something like this before if you follow higher education at all. The U.S. Department of Agriculture runs a loan service for colleges. Yes, that's right, the Department of Agriculture runs a loan service for colleges, and the essence of the program is to encourage new investment in rural areas, other things in addition to colleges, but it does include college campuses. And so when you look at the map of where these USDA loans have been to distressed private colleges, You will see a heavy concentration of these loans in the Northeast, in the Midwest, and in the Great Lakes area. And if you follow higher ed finances and college financial health like I do, those are the definitions of the geographical areas where there's most colleges at risk. So really, this, this program, this USDA program, should be called, you know, not a loan grant, should be called something like the lender of last resort. For colleges that would otherwise close because regular, regular lending institutions have declined to lend these troubled colleges funds. And so using the land and buildings as collateral, the feds step in. And here's what's happened: the loans are used, and then there's some acknowledgment that there's a short bump, short-term bump, but no progress typically is made in saving the college from its financial distress. In many cases, the college closes. USDA gets a college it can't run because that's the collateral. And, and I know I'm being a little harsh here, but a more gentle outcome is that these colleges now have taken on debt. These colleges have now taken on debt that they have no reasonable path to repay. So the new debt for the college and no enrollment bump to pay the principal interest. Who signs these things? Geez, that's almost a double geez. All right, next story. I think, I think I have figured out all of the problems that the public college system has been having in the great state of Wisconsin. Drum roll, please. It's all their website's fault. Kimberly Wethall in the Wisconsin State Journal has a headline that reads, "Universities of Wisconsin overhauls website as it tries to reverse declining enrollment." Here's a quote from the article. This is from University of Wisconsin System President Jay Rothman. With the old website, you find out about the Board of Regents, you may find out a little bit about me, the president, but you don't find out how to apply to a school 'Or what schools are available to you,' UW System President Jay Rothman said. 'The best analogy,' he continues, 'the best analogy I figured out is that when you go to a bank's website, you don't find out about the board of directors.' He's right. 'You find out how to open a checking account or a savings account. And that's,' he continues, 'the same kind of consumer-friendly focus that we want to have for our students.' Relaunched earlier this week— I think it was last week— They're trying to fix that. So I did not go to the University of Wisconsin System website. I'm taking them at their word. And here's why. I can't imagine they waited until the year 2024 to make a student-friendly, consumer-friendly website. I can't imagine that it was that bad. This might be some of the— an example of management by public relations. But if it's true, if they had a garbagey— I'm not gonna use the word crappy— they had a bad website, then they've earned the declining enrollment. They've earned the public backlash over both the closing and the consolidating colleges in the state of Wisconsin. Page 4, I want to talk about a second podcast I'm doing. Earlier this year, I started discussions with Joseph Pellerito Jr. about doing a podcast where the two participants would engage in a lively debate and discussion about a variety of higher ed topics and news stories. Because we've all seen way, way too many podcasts and social media posts where the one-sided nature of the discussion, of the post, of of the argument provides little to no value. It's my way or the highway. So Dr. Pellerito and I created College Counterpoints. It's a podcast, and it's a takeoff on the Michael Wilbon and Tony Kornheiser afternoon shows on ESPN called Pardon the Interruption. We try to— we cross-promote College Counterpoints for this reason. As we have the discussions, and we do two topics and two news stories each Thursday, we try and model how to conduct proper disagreements and have proper discussions when we don't agree on a point. Now, we tease each other for sure, but the name-calling doesn't exist outside of that done in a loving fashion. And I encourage you, you'll see that posted on social media that I use, to tune in and listen to the approach that Joseph and I take in terms of modeling discussion. Because we see now when there are colleges with trouble, whatever it is, political logistics, financial, enrollment, closures, the discussions are one-sided. They are faculty doing votes of no confidence instead of engaging in discussion. They are media doing similar kinds of things. So take a listen to College Counterpoints. We do it every Thursday afternoon, and I post the podcast Thursday or Friday. It's an interesting approach, and I'd be interested in your feedback on that. Final story from Inside Higher Education. And John Smatkhana wrote this, and I'll tell you who he is in a second. The story is, yes, colleges do close. And from the story, here's a quote that is that despite good reporting on the existential crisis facing small private colleges, especially religiously affiliated ones— that will make Derek Newton happy— the public remains convinced that 'en masse,' colleges don't close. And Dr. Pellerito and I were talking about this on last Thursday's College Counterpoints podcast. I don't even use the words 'en masse,' and I'm probably the one person talking about college closures day in and day out, week in and week out, month in and month out, more than anybody else. And this is a college president who's using the word 'college closures en masse.' Now, there's no definition of that. He doesn't offer it. I wouldn't begin to offer it at this point. But here's the interesting part. Do you know who this quote is from? John J. Smetana is the president at the soon-to-close Notre Dame College. He's the interim president, the provost, and dean of faculty at Notre Dame College in Ohio, and it's closing at the end of the spring semester. Couple things from the story, and this is from Dr. Smetana, from John Smetana. The inability to openly acknowledge the crisis, the closure crisis, the financial crisis, means transformative change is ineffective, and as a result, divisiveness in the community grows when reality hits. And that's in the form of my words, and here's protests, no-confidence votes, media backlash, and whatever. Second, without an understanding, John Smith Connor writes, without an understanding of the crisis facing our small colleges, there is no amount of internal or external analysis, like I do with the College Viability Apps, no amount of internal or external analysis reaching the same conclusion that won't be enough for many to accept, many faculty, staff, community leaders, politicians, to accept that their institution has no viable future. Donors, he adds, alumni, former and current board members, administrators, faculty, staff, and the community are left in disbelief. They don't accept the reality. And I see this week after week, time after time. It is there in the numbers. We talked about Manhattan College earlier, Notre Dame College, Fontbonne University here in St. Louis, Birmingham Southern College. Just in recent weeks, the writing has been on the wall. And he finally concludes, so, so he calls— I call— Dr. Smatana calls for more open discussion of the realities facing small private colleges. Students and families deserve to know the risks. Again, one of the reasons I created the College Viability App for students and families. Students and families deserve to know the risks along with the great benefits of choosing our institutions. Faculty and staff, he concludes, also deserve to know, share in the governance, and accept the responsibility that entails. Again, John Smatana is the interim president, provost, and dean of faculty at Notre Dame College in Ohio, which closes at the end of the spring semester. Ladies and gentlemen, he has perspective. He has perspective, and it's based on experience. Folks, I have had a good podcast show today. I like the range of stories and topics, and I'll continue to provide you news and commentary as This Week in College Viability evolves in the coming months and years. Thanks for listening. Until next Monday, I'm Gary Stocker with This Week in College Viability.