This Week In College Viability (TWICV) for Dec 18 2023

It's December 18th, 2023, and it's This Week in College Viability, where we look out for the best interests of faculty and staff and students, their families, and other stakeholders in higher education. Hi, it's Gary Stocker. This week, it's time for more cutbacks and layoffs. I have the list in a second. I wonder if there will ever be a week where we don't have cutbacks and layoffs in our broadcast, in our podcast. We're going to talk about when a college abruptly closes, what happens to its students. Inside Higher Education has a headline reading, "Why Higher Ed Needs to Be Disrupted." Brian Rosenberg, I interviewed him last week in a special episode of This Week. And his new book is Whatever It Is, I Don't Like It. I've got some highlights I want to talk about from that podcast with Dr. Rosenberg. Nearly half of companies say they plan to eliminate bachelor's degrees. All right, we'll briefly talk about that. And Bloomberg News had a really big story on the economics of small U.S. colleges and how they're faltering. And I had a handful or more people send me this link. It is behind a firewall, so I went out and actually bought the subscription for that. But onward did we go. And let's go to our cutbacks and layoffs list. And just at the end of the week, Methodist University— this is from ABC TV 11 in Raleigh, North Carolina. The link will be in the show notes as they always are. And Bradley University, we've had them on the podcast previously. And the headline from Cassidy Weygand in the Peoria Journal-Star on December 11th reads, "Not an easy process." Bradley University announces final decisions on program cuts and it looks like 61 positions and 15, 1-5, programs and majors.

And as we have discussed previously, the faculty were quick to race off with their no-confidence resolution.

I think that was done in November.

And the faculty statement is expected.

I'll read it anyway.

Uh, President Standford, the president at Bradley University, is evaluated primarily on his position as an effective leader and communicator, the faculty resolution says, and has failed in these aspects. The president has largely ignored the principles of shared governance and joint determination, and his decisions have put the university in a precarious financial position and have adversely affected the reputation of the university, is the faculty statement in their no-confidence resolution for the president at Bradley University.

I'll refer you to the title of Brian Rosenberg's book, Whatever It Is, I Don't Like It.

He could have changed the color of the mascot and they wouldn't have liked it. Page 2. When a college abruptly closes, what happens to its students? This is kind of another version of coin toss college that we usually use in the context of graduation rates.

And this is from The Hill by Alejandro O'Connell-Dominick from December 9th.

And it found that this is a 2022 study from the State Higher Education Executive Office Association It found that about 47% of students who experienced a closure between 2004 and 2020 continued their enrollment at another institution after the closure. So again, about half, to round up the numbers. So it's really kind of another version of coin toss. If a college closes, about half of the students continue their education. Not a good number in lots of ways. Now, to be fair, there are some nuances to the data based on the school type and those kind of things.

Again, I'll let you read the story.

I'll have the link in the show notes. But about half is a number we can look at. We go to our good friend at Inside Higher Education, Steven Mintz, and his story on just in earlier this month reads, Why Higher Education Needs to Be Disrupted.

That's a long article.

I'm just gonna highlight some of the parts he talked about. And he used Ryan Craig's recent book, What's Wrong with College? And it comes out of his latest book, Craig's latest book, Apprentice Nation. I think that was released this year sometime. And Mintz quotes Craig with 3 items. And the first is, despite dramatic changes in the American economy, Craig writes, college majors have remained largely unchanged. The same majors that were popular 40 years ago remain largely intact today. He goes on, although almost none of these majors provide a linear path to a good first job. I question the generalization, but all right, I'll give that to him. Instead, their graduates follow a rather circuitous, uncertain route into the job market, and examples would be biology, communications, English, foreign languages, and others. And then thirdly, he says the absence of a clear payoff contributes to the fact that only about half of all students enrolled in a 4-year college graduate in 6 years. Let me say that again. Only about half of all students enrolled in a 4-year college graduate in 6 years, and completion rates are materially worse for students from low-income and historically underrepresented backgrounds. And then finally, colleges are filled, in Ryan Craig's view, and I like this term, colleges are filled with dozens of, in quotes, "not a job," end quote, majors. Dozens of not-a-job majors, along with low-enrollment legacy majors like German. Most new majors come not from the science or technical fields, but from the languages, arts, education, humanities, programs that today few undergraduates want.

And Craig finishes up by saying, incredibly, a third, that's one-third, that's one out of three, of the new programs established between 2012 and 2014 produced no graduates at all. One-third of these new programs, no graduates. Half of these new programs produced 5 or fewer graduates. That, my friends, is an indictment. My podcast with Brian Rosenberg last week was fascinating in many ways. His book, like we talked about a minute ago, was entitled Whatever It Is, I Don't Like It. One of the best book titles I've seen in a long time. And I just posted a blog earlier today, but I'm going to highlight the 4 points that came out of that interview that I wanted to reinforce with the blog.

And to one of the questions I asked Dr.

Rosenberg, he said, Gary, there are 2 numbers, 56 and 46. And 56, it's The tuition discount rate, 56%, is the average tuition discount rate for colleges in the most recently released data, which means colleges are discounting more than half of their list price tuition to get students to enroll. Now, don't get me wrong, that's a good deal for the students. If you can get it, take it. But that's money, that's revenue, that's income, that's assets that the college does not then have access to to hire teachers, to pay teachers, to keep the lights on, to add programs, to maintain the facilities, to maintain safe facilities. And 46 was the other number that Dr. Rosenberg shared, and that's the average 4-year graduation rate for African American students. He went on to add, if you believe those numbers, how can you not disagree that higher education is in for continued trauma?

We also talked about the economics of supply and demand.

I've shared that with this audience before. I'm not going to do that today.

And Dr. Rosenberg reaffirmed what I have shared.

And since there are way too many college seats and not enough students willing to pay tuition to fill those seats, there are none, if any, programmatic changes that will substantially, that will materially impact a college's finances, a college's financial health, a college's viability. It is just basic economics, supply and demand. We also talked about high schools, and this was not in his book. I brought this up on my own, and I asked Dr. Rosenberg the impact of high school education in the United States on the low and, I think, catastrophic college graduation rates. And he reaffirmed, yes, there are way, way, way too many high school students whose high schools do not prepare them for a college education. And that poor preparation in high schools certainly, Dr. Rosenberg confirmed and reaffirmed, impacts the miserable college graduation rates we see in way, way, way too many colleges. Now, caveat, there are many colleges, both public and private, that do a fine job of graduating more than 50% of their students over 4 years, although that 50% is a pretty low threshold. But there are too many, way too many, way too many that don't even come close to that 50% graduation rate for undergraduate students after 4 years. I've asked before and I'll ask again, why, why are they still in existence? They're paid to graduate students. They're not paid to hold courses. And then finally, I proffered to Dr. Rosenberg that we see a lot of information in the media about the high-end colleges, the Ivy colleges, the Harvards, the Yales, the MITs, and the big publics, the Ohio States, the University of Michigan, Texas, USCs. I'm sorry, that's private. Uh, UCLAs. And, but we don't see much in the middle. And, and Dr. Rosenberg offered that he thinks that colleges in the middle will lead the change. They're not worried about where the next dollar will come from, and they have an incentive to change. So I thought that was an interesting observation, that it won't be the biggies on the high end or those watching their last dollar circle the financial drain. It will be those many hundreds, hundreds of colleges in the middle that will lead the change in higher education. I, for one, am anxious to see that happen. Onward we go to a quick story on nearly half of companies say they plan to eliminate bachelor's degree requirements in 2024. We've seen this story before. This one comes from Carolyn Christ at Higher Education Dive on December 13th. And employers are doing this. They want a more diverse workforce and they want to increase the number of job candidate numbers. And this is from a survey done reported by Higher Education Dive and Carolyn Crist. It's just another component pressing against that supply and demand issue that we just talked about. Page 3, the economics of small U.S. colleges are faltering. This is a story I mentioned earlier from Bloomberg, and its reporters are Nick Cuorello, Danielle Moran, and Marie Pitino. This was on December 13th. I had a handful of more folks send me this. Now I'll include the link in the show notes, but it is behind a firewall. And I want to review, there's a lot of data that I'm probably going to do either a blog or a separate podcast on some of the other parts of the story. But the Bloomberg reporting is thorough, really good. And they use their abundant resources to confirm yet again the plight of private colleges, private colleges in the United States. There was one item that I think they missed, but I can see their thought process. They didn't really focus on that abysmal 4 to 6 year undergraduate graduation rate. I can see why they didn't do that because they were trying to predict viability and not quality. But that's one miss, but that's a minor detail in terms of the context of this article.

And while some of the colleges—

and there were hundreds of colleges that fit into the poor— I think it was 4 parameters that Blue Brain reported that shows some various levels of financial distress. And while some colleges responded, many, many did not. And some of the colleges were quite logical and data-driven, real small number, and I'll go over those here in a second. Most, sadly, most of the colleges that responded— give them credit for responding— but most still relied on what I've talked about before. They're trying to do management by PR. They proclaim some combination of enrollment trends and new programs and new initiatives and new strategic plans that will save them. And we go back to Economics 101. Shh, don't tell anybody I said this. There are too many seats and not enough students to fill them. No programmatic changes are going to materially impact these colleges.

And then quite a few tried to challenge Bloomberg's use of IPEDS data.

They tried citing its 2021 time period or the 5 chosen IPEDS data points didn't really apply to them.

But here is what always, always applies.

The trends, the patterns. 5 to 10 years of data— we use 8 in the College Viability App.

There's a trend.

If your enrollment has gone down for 8 consecutive years, if your tuition and fee revenue is down, if your endowment is awful, if your admissions yield is not good, ain't gonna change this year or next. It's the pattern that matters. It's not single data points. So let's, let's have some fun with some of the, uh, Some of the few respondents to the Bloomberg inquiries. And I'm gonna go to Albion College in Michigan and another example of management by PR. They stated just like Aquinas College, also in Michigan, they both cited just standard stuff. More applications, changing things, adding programs, cutting back, standard stuff. Arcadia College in Pennsylvania said they had the highest enrollment since 2020.

Lord, I hope so.

Let me check my records here. Oh yeah, there was a pandemic, I believe, sometime in that 2020 timeframe.

Talk about reporting selective data. Chowan University, C-H-O-W-A-N, in North Carolina, their response in essence was they created a life skills university. Okay, they tried to explain what that was. I have no idea what a life skills university is.

I can tell you it doesn't change the economic laws of supply and demand.

Earlham College in Indiana had a good response, but they're sitting on a $400 million endowment. They made a good point that 25% of their students are international, and they have done a historically decent job recruiting those students. And they did use the usual garbage—

excuse me, the usual content of new programs, new sports teams. Those just add cost. I've talked about that before.

But you could tell they tried to give an informed response. Elmira College in New York, they're just adding stuff, not going to work. Uh, Goucher, G-O-U-C-H-E-R, in Maryland challenged the Bloomberg reporting with a decent response. If you get the article, I'll let you read that on your own, but they give them credit.

Goucher did a good job responding.

Uh, Graceland Limone, now I've done some work on them, on their finances before, I think in a YouTube video, and I'll read, I'll read Their quote from Graceland Lamoni College, I think it's college, in Iowa, in quotes, "We have been aggressively planning and implementing sweeping changes to position us for growth." We have been aggressively planning and implementing sweeping changes to position us for growth.

Good luck to the folks at Graceland Lamoni. It's not gonna happen. Grandview University, also in Iowa, challenged the iPad's data and did not do that very well.

Hilbert College in New York, pretty good response. Uh, to me it looks like they have been one of the few who get it.

And I did a quick check of their 4- and 6-year graduation rates, and it's up about 16 points. It's still a smidge below 50%. The 6-year rate is around 55%, so they've got some room to go. But overall, a pretty good response. And then finally, Keystone College in Pennsylvania, typical management IPR. So like I always do, I go to the data, and if you're interested in looking at the data on your own, I'm going to have this in the show notes, and I may want to make a note here. Sign up for my email list, and that link will be in the show notes, and I'm going to send you a free copy. I'll do this on December 31st. I'm going to send a free copy of the 2023 faculty and staff version of the app to anybody on my email list as of December 31st. Now there are already hundreds on there, but if you want to see what the College Viability App looks like for 2023, join the email list. You get a mailing about once a week is what I do right now. Uh, and I'll be working on the 2024 version as soon as IPEDS finishes up their data pops for 2022. But let's go to the data from IPEDS. Again, that's from the National Center for Education Statistics. Uh, the data ranges, the year range is 2014 to 2021. And of the 39 colleges who had the gumption to respond, give them credit, only 5 of the 39 had increased FTE enrollment growth. 14 of the 39 had a 2021 4-year undergraduate graduation rate less than 50%. They're coin toss colleges. 14, same number, 39 had an endowment less than $50 million. And remember, $50 million is our college viability minimum threshold. Only 2 of the 39 had an increased admission yield. There's something going on with that data point. I'm going to continue to watch that and think that through. Only 7 of the 39 had increased tuition and fee revenue growth, and 3 of those is less than $1 million over 8 years.

Not a lot.

And 30, 30 of the 39 had increased their unfunded institutional grants from 2014 to 2021. And again, don't tell anybody this— unfunded institutional grants is the inside baseball name for most scholarships, merit aid, and the likes. It's money colleges forego on their own decision to get your student to enroll. 30 of the 39 have increased that amount. Good for the students, no question, nothing wrong with it. But because of the market pressures That puts a lot of financial pressure on many of these colleges and is leading more and more to say we can't make it. And then finally on page 3, Bacone College was scheduled to be auctioned off, I think this week sometime. Uh, 2News in Oklahoma City said they've called off the auction. No reason was given. Page 4, the 2024 College Viability App will be out early in the year.

I wanna talk about what it will do for the different types of listeners.

For college leaders, there will be a version of the app that includes about 30 reports that will let you compare every private and every public college across those 30 reports. And you can do it in seconds, and you can do it in any combination of reports that you want. And you'll be able to print off those reports, you'll be able to download those reports, and share those with others in your organization and outside your organization. You need that to be able to know whether you can keep the lights on or not. For college faculty and staff, so many times I read and I hear and I talk with others, college faculty and staff don't have any reasonable clue to what the financial status is, what the viability is of their college. I've created a modified version of the College Viability App for just faculty and staff. It'll be about 9 reports of common indicators like graduation rates, enrollment, tuition fee revenue, endowment, and the likes. There's a third version for students and their families. Again, smaller version. It will look at graduation rates. It will look at endowment. It will look at enrollment growth or enrollment, period. And maybe a couple other reports just to let students be able to compare, students and their families, be able to compare which colleges are doing well and which are not doing so much. And then there's one— there's not a separate version, but for community stakeholders, really, any of the three basic College Viability App reports will work for their needs. And again, like I said before, I'm going to create a free link to the, to the 2023 faculty and staff version to those who are on my email list or join my email list by December 31st. And that I'll include a link to that email list signup in the show notes. So I'm not going to post on the next two Mondays for obvious reasons, but I will probably have a couple of short podcasts in the next two weeks. 2024 may not be much fun in higher education. That would be my bet.

And I will continue to be here to provide an informing and I hope entertaining perspective and will continue to work hard to earn your support as the unofficial, the unofficial college fiduciary looking out for your best interests.

For faculty and staff, students and their families. Until we come again in 2024, this is Gary Stocker with This Week in College Liability.