This Week In College Viability (TWICV) for Jan 20, 2025

It's This Week in College Viability news and commentary for January 25th, 2025. Hi everybody, Gary Stocker back again this week. Hey, welcome to the cold winter and to TWiCV for January 20th, 2025. I wanna start off today's podcast with a story about two college professors I met, and I met them virtually. I had the chance to meet and talk with these two kindred souls just last week. And they, they released a book on Amazon in December, and I'm going to tell you the title but not much else. The title of the book is Bankrupt U. Bankrupt U is the title. The authors are two college professors, Bill Quain and Joe Kurabi. Now, as you might guess, I get folks from across the higher education spectrum reach out to me on a regular basis to get my perspective on college finances and closures and mergers and more. And I've had authors on the podcast before, and I'm going to have these two on the podcast as soon as we find a nice convenient date. They are two experienced senior, and I'll add entertaining professors who take on colleagues and college faculty in a way that you're going to want to hear about, you're going to want to read about. I'll save the details for later. And again, they'll be on the podcast as my special guests as soon as we can get a date lined up this week. I have news and commentary on layoffs and cutbacks at the University of New Orleans, Columbia College in Chicago, again St. Norbert College also back on the show again today. Frequent flyer Webster University— this one got me— Webster University touts financial turnaround. This is one year after their auditor said they had a going concern. $39 million in debt and only is down to $22 million for 2024, I believe. It's an absolutely ridiculous assertion that I shredded to bits on social media, and I'm going to share that post with you today on the podcast. And I guess the big national news last week was freshman enrollment didn't flop after all. This was from the National Clearinghouse, and it was all over the media last week. I'm going to talk about that. I'm going to share with you. I don't really think it's that big of a story, but we'll talk about that in a few minutes. More silliness at Guilford College, not just Webster University. They don't have a monopoly on silliness. And as always, much, much, much more on the show. Layoffs and cutbacks. The University of New Orleans to furlough hundreds of employees— furlough hundreds of employees— as it faces a $10 million budget gap. This is from Marie Fazio, who's a staff writer at NOLA.com. And it's 290 employees. And I'm looking at the Yahoo version of the story. And until June 30th of this year, nearly every staff member, including upper administrators like the president making more than $30,000 annually, will be required to take unpaid time off during each 2-week pay period. Lower-paid staff will be required to take a day and a half of unpaid pay— of unpaid time off per pay period, while the highest paid will take 3 days off every 2 weeks. And 290 of the 575 full-time employees will be required to take furloughs, layoffs, program and course cutbacks. It's just, it's just more of the same. It's continuing evidence, continuing evidence of the overall contraction of higher education. There's just no way around that. Doreen Rodriguez at Columbia Chronicle. I think we've had her on, her stories on the podcast before. Columbia College lays off 23 full-time faculty amid historic restructuring. Well, all right, she can write whatever headlines she wants. This is 23 more full-time faculty. The college laid off 23 full-time faculty on Tuesday, January 14th. The announcement came in an email. In an email from the interim president and from the senior vice president and provost— names aren't important for the story— 9 teaching-track faculty and 14 other faculty members with tenure appointments will be let go after the spring 2025 semester. The layoffs came mostly in programs that were consolidated or eliminated in the massive restructuring that took place last fall as Columbia attempts to reduce its $17 million deficit. Now keep in mind, Columbia is at $17 million They're not proclaiming a turnaround. Webster University was $39 million in 2023. It's down to $22 million in 2024, and they're claiming a turnaround at Webster. Just, just, just, just ridiculous. Now, you know, Columbia College has been on the podcast before, and I have noted their weaknesses. But the more I ponder this and the more I read some of their news stories, it's possible, it's possible that Columbia College might be doing just enough to survive. I'm certainly gonna watch this one closely. St. Norbert College, and a story from Brian Kernan on Fox 11 News on January 16th. Additional faculty layoffs are coming. They're not specifying how many. And the college is using, this is from Brian Kernan on Fox 11, the college is using what's known as retrenchment. All right, nice, another synonym for layoffs, where faculty positions can be terminated for financial reasons and/or program discontinuation. By the way, interesting, I might have missed this before. St. Norbert graduates about 70% of its students in 4 years. So again, another example of a college that at least graduates students, unlike probably most of the others we're gonna talk about today, still facing significant and maybe impossible financial trends, financial challenges. College dribble. I'm starting off with two today from the same place. And again, I don't mention the college. There's no value in that yet. We are not closing, says this college. We are changing. We are not closing. We are changing. We are going to be a model of higher education for the world as it is and as it will be during your student's life. Okay, we're not closing. We're changing. Great. Here's another one. The freshman retention rate can be attributed to the college's continued dedication to fostering a supportive learning environment and its personalized approach to education. How many times have I read that and heard that from colleges? Trite, trite, trite, trite, trite. And another one, same college, and I'm still not gonna reference it. Our exceptional growth and retention rate are indicative of our collective efforts to empower students to reach their fullest potential. Hey, I'll give you some selective use of data. I'll give you some real use of data because this college is picking and choosing what it wants to share. This private college graduates just over 30% of its students, just over 30% of its students for the past 8 years. This is from data they submitted. Their 8-year retention rate, they boasted in this story about a 92% year-to-year retention rate. Their 8-year retention rate is in the mid-60% range. It's just college— again, college name, use whatever data that you want. But that's why I'm here. I'm going to point out where it's silly. And this is yet another example of college spinning, spinning, spinning data to their benefit but not to anybody else's. So Webster University, again, a frequent flyer here on the program. Webster University touts financial turnaround. Now, this was in two publications. This is the essence of the story in Higher Education Dive and here in St. Louis in the Post-Dispatch. And the subheading reads, for one of the stories, I can't remember which, a year and a half ago, the private Missouri institution's sustainability was in doubt. Survivability was in doubt. But enrollment increases have led to steep improvements in its finances. All right, let's Let's, let's drill down onto this, and I'm just going to effectively read my social media post to this story. And I say, this is just plain silly. It's like me saying my 5-foot-9-inch body will become 6-foot-2 because I will eat extra oatmeal for breakfast tomorrow. The continuing issues with bondholders at Webster University and substantial budget cuts they're not suggestive of anything close to a turnaround. Nothing close to a turnaround. The university is pitching a story that is high with projected results, anticipated results, and low with actual performance data. Now, not one reporter in these two stories did the research that I do all the time. Not one reporter has noted that Webster's percent admitted And again, that's the number of all the students that, that Webster gets applications for are admitted. Webster's number went up from 59% to 96%, 37 points in one year, from the fall of 2023 to the fall of 2024. Now Webster has clearly decided to go all in on driving up tuition revenue by becoming much, much less selective. And they're welcome to do that. That's a business decision. They can do that. I'll tell you what's going to happen 4 years from now. The graduation rates for these students are going to be really low, but Webster will have been able to post that they collected some tuition revenue. They increased their enrollment by being much, much less selective. And a reporter might have also checked out the changes in Webster's admission yield. I did. The percent admitted of the top 25% high school applicants is down 18 points from 49% in 2023 to 31% in the fall of 2024. Draw your own conclusions from fewer higher-performing students selecting this university. And this is, as my post goes on, this is yet another example of what I call regurgitation reporting. Regurgitation reporting, media in whatever form or fashion takes a college's press release and treats it as news. Not cool. And again, I'll share, I'm getting away from the post here, I'll make my data available to reporters anywhere in the country as a courtesy, no fee, no charge. I'll send you the link. All you have to do is drop me a note to gary@collegeviability.com. And since I am doing all of the work for the media, I will add that this university, Webster University, averaged only 44% 4-year graduation rates for the past 8 reported years. There was an editorial in a North Dakota media outlet, and I'm not going to post it because it was behind a firewall, so I had to find it through different source. Rob Port, who's a reporter, I believe, for this, for this publication, says, sorry, North Dakota Governor Armstrong, but we need to talk about shutting down some of North Dakota's colleges. Now, the North Dakota governor is Kelly Armstrong. The story goes on to say the North Dakota University System is comprised of 11 campuses, 8 of which are mandated, 8 of which are mandated by the state constitution. Mr. Porte goes on to note our system is overbuilt and duplicative and something needs to change. He goes on to say the lack, the reasons for lack of accountability in some of these colleges are tied up in the local interest, in local interest politics, which makes sense, that dominate discussions about the size and the number, I guess, of our state's university system. We know these schools can create many jobs in their communities, and the students who attend generate a lot of commerce. Closing any given campus, we know this would be a blow to the local economy. But Mr. Port continues, that is not— that is, that is a good reason, but that is not a good reason to keep them open even as demand for higher education falls through the floor. And then from the intro, freshman enrollment didn't flop after all. You may or may not recall last fall's news story from the Clearinghouse, the Education Clearinghouse data center, that the enrollment, freshman enrollment was down, like something like 5 points, 5%. Every media outlet in the country had this new updated story last week. It was not down 5%. They're not willing to say how much yet. That is later, maybe later this week, they're gonna release an updated number. Which should be more accurate because we're going to have more actual college data and not a projection like they did last fall. I don't think the undercount is that big of a deal. It matters to the Clearinghouse, I'm sure. And here's why I don't think it's that big of a deal. The change— this, this didn't drop 5% change— doesn't impact the hundreds of colleges whose enrollment decreased at the college-by-college level. They already know it's down. They're already dealing with budget cuts and layoffs, program cutbacks, and more. We hear that every week on this podcast, in other places. Yet, yeah, the big picture for the higher education market is impacted a little bit. Maybe it didn't drop as much as projected. Maybe it went up a little bit. We'll find out soon enough. But the only way I look at this is that the proverbial cliff, enrollment cliff that we hear so much about, maybe it's become more of a steep slope in some form or fashion. But in places like St. Norbert or Olin College, Guilford College, La Salle University, and many, many, many more, the impact of the Clearinghouse data being too low is not, I doubt it's even on their radar. These colleges and many more are already in financial peril. A predictive methodology error only obscures the inevitable, that being much, much more consolidation in the form of closure— closures and mergers in the coming weeks and months. Let's go to Guilford College in North Carolina. and I don't believe I'm ready to classify them as frequent flyers yet, but they're getting close to being frequent flyers on the program. So the board chair, I believe, Gene Bordovich, is currently serving as Guilford's acting president. Now this is from an internal story, and the headline on this reads— this is from guilford.edu— the headline reads, "We are not closing, we are changing." One of the questions in this little FAQ that they had at the website would be to Ms. Bordewich, the acting Guilford president, formerly the board chair— draw your own conclusions— what would you tell prospective students and parents? This is about the financial health and viability and operability of the college. Ms. Bordewich says, I would tell them that if Guilford is the right place for their son or daughter, they should come here. Okay, that's fine. Students, you might wanna look at the data, the bad data that I have posted for Guilford before. She goes on to say, we are not closing, we are changing. You might have recognized this from earlier in the show. We are not closing, we are changing. We are going to become a model of higher education for the world as it is and as it will be during your student's life. She concludes with, I would tell them, I would tell them they will not find an environment like this at any other college or university. How many times, how many times have I heard that? Students, parents, faculty, staff, community leaders make— certainly make your own decisions, for sure, make your own decisions. But from my perspective, looking at the data, this college presents data— this college presents data that is financially unsustainable. So let's jump over to accreditation for a second. So I had some time last week, or I made some time, and I went out and grabbed a financial criteria for one of the accreditors. I'm not going to share which one. And I was pondering what some of these standards might look like. It was a cold and snowy day here in St. Louis. What else, what else would I be doing? So here's— let me read some of these, and I'm not going to cite the reference because that might give it away. Here's one from one of the 5 major accrediting agencies in the country: The institution has a well-developed process in place for budgeting and for monitoring its finances. What does that mean? They have a process in place. What if it's a bad process? What if it's a process that is completely out of whack? If they have it, does that mean they're okay? It also says another one is independent audited financial statements and financial indexes, college financial indexes, patterns for multiple years. Well, okay, here's my audited financial statements for the last 5 years, 7 years, whatever. Does anybody analyze them at these accrediting agencies? I'm sure they do, but the standard says they just have to have them. They have to have an endowment draw policy. We talk about this on the College Financial Health Show with Matt Hendricks and Gary Stocker every Tuesday morning. They have to have an endowment drawdown policy. All right, all colleges draw down— almost, if not all colleges draw down their endowment. But what if they have a policy at this college, and what if they have repeatedly violated their own policy? How is that addressed? Is that something that, that the accrediting agency can take a college to task for? A process for monitoring expenses. Okay, what happens if expenses— this is me— what happens if expenses are out of whack with revenues? They can show we're monitoring expenses, tracking payroll and keeping the lights on and gasoline and mowing the grass and all that kind of stuff. But what if it's out of whack with revenues? They have to have enrollment tracking and budget projections for multiple years. What if— this is my question— what if they are nothing more, these enrollment tracking and budget projections, what if they are nothing more than dartboard numbers Or somebody throws a dart at a dartboard and that becomes a value. And colleges must have retention and completion data. Don't, don't even get me started on graduation rates and completion data. I've talked about this before. These are all inputs. Do you have your I's dotted and your T's crossed? As these standards are written, there are no outputs that I see. Evaluated. Now, I'm— it's reasonable to speculate, that's what I'm doing here. It's reasonable to speculate that independent reviewers in these colleges use their own experience and intellect and knowledge to challenge colleges that are not doing well. That's a fair assumption. But the standards themselves, the standards themselves are just, just plain too heavy on the inputs and not on the outputs. And trust me, I will be talking about new finance tools for our creditors and public agencies a lot, a lot this year. And one final college I wanna talk about is, and the headline reads, latest layoffs deepen worries about the future of St. Francis College in New York. The story is from Gwen Hogan on January 15th from The City. Which is reporting to New Yorkers. I'm going to read from Ms. Hogan's story. St. Francis College, in the heart of downtown Brooklyn for 160 years, fired about or fired around 17 employees. I don't know what that means, fired around 17 employees, including academic advisors, registrar workers, and librarians last week. The layoffs, the layoffs, Ms. Hogan continues, represent about a quarter of the school's already dwindling staff are the latest blow on the leadership of President Tim Cesare, who is a former human resources professional and on the Board of Trustees. There's a pattern. We had— who had this gentleman— the story goes on to say Mr. Cesare had no experience in higher education before joining the school as chief operating officer in 2022, and he was also on the board. Interesting. And then he became interim president in March of 2023 and he became the story's official president, the college's official president in 2024 sometime. The college's remaining faculty, the story goes on, the college's remaining faculty have accused the president of inappropriate appointments and removals, financial mismanagement, grossly poor leadership, and abandonment of the mission and values of the college. That's according to a letter the school's leadership reviewed. By, by Miss Hogan. Let's go to the data as we wind down on this podcast for January 25th. The endowment at Saint Francis is down $30 million. The enrollment is flat, it's up a little bit, 43 students over 8 years. The 4-year graduation rate has been mid-30% over the past 8 years, not even 40%. Tuition and fee revenue down, decreased almost $8 million From the perspective of data science, Advanced Compass net income is down 116%, operating margin down 103%. They had a 20%— St. Francis College had a 20% draw against the endowment in 2018. That's a really big number. And the operating expenses, total operating expenses down 14%, total operating— excuse me, total operating revenue down 14%, total operating expenses up 83%. Yeah, you heard that right. Revenue down 14%, expenses up 83%. You know what I've got enough said. The data shows where St. Francis is, irrespective of the college president's statements or even the faculty remaining at that college. So as we wrap up today's podcast, I had to Jeff Doyle, who's a LinkedIn buddy, and we have talked on occasion. He had a nice little concise report about the 30 private non-for-profit college closures in 2024. There was one public one, and the 8 that have already announced for 2025. And this is from Jeff Doyle's Deep Thoughts HED, deepthoughtshed.com blog, I believe, or website. And I did some quick counting. There were some 17,000 students impacted. I didn't count the public college, which was 27,000-some-odd students by itself. It was Indiana University Purdue and now is the University of Indiana at Indianapolis, something like that. I didn't count those students. For those that summarily dismiss, summarily dismiss college closures as statistically insignificant, and then offer cursory regrets for those students and their families impacted. Let's, let's do some data projections. These are projections on my part. So 17,000 students, we've learned, 17,000 students impacted by these 30 closures really become about 9,000 who continue. About half continue. 8,000, 9,000 continue. So we've lost somewhere in the vicinity of 8,000 potential graduates. 8,000 we've lost, potential graduates, college graduates, and their potential impact on our country, on our society, on their families, and certainly on their future. And let's say, just for a number, for every, for every $10,000 in tuition paid for those 17,000 students while they went to college, that is $170 million in potentially totally wasted money those students have spent on a college that closed. And I understand that the leadership at every college— at every college, period, but really every college in financial peril— still has its fiduciary responsibility. There's no— there's no changing that. I would suggest that as part of that fiduciary duty part, an additional part of that fiduciary duty, they add, they add a duty to humanity. If your college is financially unhealthy in what is clearly a contracting market, the likelihood of a strong recovery at your college is problematic at best. Think of your students. Their current and future families, your faculty, your staff, and your communities. If the end, if the end is near, the end is near, do the right thing. Do the right thing for all involved. Hey, thanks. For College Viability, Gary Stocker again. With this week's podcast. I'll be back next Monday with more news and commentary. If you have questions, comments, concerns, challenges, send them to me at gary@collegeviability.com. We'll be back again next Monday. Until then, take care.