Gary Stocker explains why families need college viability experts who analyze financial data to identify schools at risk of closure or merger. When a college shuts down, students lose a year's salary, roughly $40-$50K, plus face course transfers and weaker job preparation. Mergers create unpredictable changes to tuition, programs, and campus life.
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Welcome back to another issue of This Week in College Viability. My name is Gary Stocker. Today I'm going to talk about really a, a person in your college search world that you may not be familiar with, and it is a college viability expert. What is a college viability expert? Well, there are precious few out there, and I would like to think I am one of them, but it's really someone who has access to data and the ability to interpret data and compare the relative financial health of colleges, both private and public. Although, to be honest, it's more private colleges that are in trouble than publics. But the college viability expert is one that can help you save money and time with that initial list of colleges that you are considering. You don't want to go through all the work of looking at majors and tuition and campus visits and submitting applications and essays only to find out that the college you want is financially challenged, financially unhealthy, or maybe even at risk of closure or having to merge with another college that you know nothing about. Why do you need— why do families, why do students and their families need a college viability expert? I think the first reason is this is somebody who has access to comparative data. Someone who can compare the finances, the enrollment trends, the graduation rates, and much, much more against a whole series of colleges you may be considering. It's a person who knows finances, who's not afraid of looking at financial statements, comparing financial statements, and being able to develop that big picture comparison to share with you something along the lines of, if I were in your shoes, These are the colleges that are more financially healthy than others. The proper college viability expert can also, believe it or not, save you money. Let's envision a scenario where you have chosen a college, or you choose a college that doesn't make it, that has to close— not likely, but, but a reasonable scenario— or has to merge. There's a cost associated with that, and there's two basic forms of the costs. Some are the college courses you would have to take over. I understand there are transfer credits, and many of them do a good job with that, but nonetheless, there are some college courses that you just have to take over. But believe it or not, that's a relatively small amount in the overall scheme of things. The bigger cost is one kind of like an opportunity cost. It's lost income. If you are planning on a 4-year college career and because of closures or things be out of your— beyond your control, even if you transfer of your own volition, you lose a year of income. So say that first job would be an income of between $40,000 and $50,000. I can readily make the case that that's a lost income to you while you're continuing college for whatever reason. I think the other part is to consider the experience. And I still recall my college days, even though it was a long, long time ago. It was a fabulous experience. And while it is very reasonable to assume there will be an increasing number of colleges close, mostly private, mostly small, mostly rural, it won't be an astronomical number, but there will still be a large, large number of these colleges who don't have to close but they don't have the financial resources to provide you or your family member or loved one with the college experience hoped for and needed to get proper, to get a proper career start. And then lastly, let's talk about the merger questions. And as I follow this literature on a regular basis, there will be colleges who close because they just can't find a solution. There will be colleges who close because they can't find a merger partner or partners because they've waited too long. But even with the assumption that a college finds a partner or more than one partner to merge with, consolidate with, whatever term you want to use, you don't know what you're getting into. You looked at College One, you know what the tuition was, you know what the courses were, you know the faculty, you know the location. If there's a merger, it's not fair to say it'll be catastrophic, but there will be a lot of changes associated with that merger that you hadn't planned on, simply because I can make the argument you haven't considered or chose not to consider using someone in the category of college viability expert to say, hey, this college is not at risk of closure or merger, by comparison, or this college looks to be struggling, and maybe you need to think about other colleges as well. So a college viability export is certainly a brand new field in colleges. It's dictated by the market because there will be more closures. There will be more mergers. It may be tomorrow, it may be next week, next month, next year, but it will happen. This is Gary Stocker, and this has been another episode of This Week in College Viability.
