This Week In College Viability (TWICV) for December 23, 2024

It is Christmas Eve, 2024. Welcome and welcome back to This Week in College Viability for December 23rd, 2024. Let's start off the last podcast of the year with a note about higher education media. And I've talked about this in the past. And I've come to believe that College Viability, this podcast, is really, in addition to providing apps, it's an alternative media source for higher education news. It's obvious that we can really no longer trust colleges themselves to share actual timely information about their finances and their graduation rates and program completions and much, much more. And national higher education media almost always, not always, but almost always provides just a cookbook of ideas on how to make incremental change or incremental changes in the college model. And some certainly are important contributions. Many though are marginal contributions at best. And I would offer they are not nearly, not nearly aggressive enough about ensuring timely and appropriate information about college finances, graduation rates, and much, much more. And I guess I belatedly realized this. I might have sensed this earlier in the year, but I belatedly realized this when I noted it was a traditional media story from somewhere that warned against the bias that traditional media— define that any way you want— the bias that traditional media provided. And the reporter in this story went on to suggest that the only successful future, immediate sources will be alternative media, who the author suggests to take a more objective, data-based approach to reporting, or data approach to reporting. And that's really what I think I do. That's really what I believe I do for higher education with this podcast, This Week in College Viability. And there are two quotes, and Brian Rosenberg again, who gets the best title of the century, maybe, for his book. Brian Rosenberg, who was a president at Macalester College in Minnesota, published a book about this time last year, and it was entitled Whatever It Is, Whatever It Is, I'm Against It. And of course, he was referencing faculty, and this came out from the 2023 Harvard Education Press. And there's two quotes that I want to use from Dr. Rosenberg's book. The first one is, And again, this is quoting from Dr. Brian Rosenberg. Yet this industry, higher education, this industry that ostensibly fosters growth and transformation in its students just cannot seem to change or transform itself in ways beyond the incremental. And Dr. Rosenberg goes on to say in the last quote, if my arguments, this is Dr. Rosenberg, if my arguments seem at times to be deliberately or even overly provocative. It is because I believe that at this point a gentle nudge will have about as much impact on the thinking of many in higher education. And to use another metaphor, Dr. Rosenberg says, "A fly on the hide of an elephant." And that's from Brian Rosenberg, author of Whatever It Is, I'm Against It. Amen. Dr. Rosenberg, I'm in. For this week, I have stories on these. The College of St. Rose closed earlier this year, sold off all of its assets, and is still short of what they needed to pay off creditors. And for bankers and bondholders listening to this, that should be a warning to both of you. Couldn't even come up with the cash selling off all its assets to pay off its debts. Don't judge a college by its history— this is me talking— judge it by its financial position. And I have a story about a Forbes writer who just can't, who just can't be to the point that there is a pending, maybe even catastrophic, set of college consolidations about to occur. Another story about a Middle States Commissioner, the Middle States Commission on Higher Education, one of their commissioners says we don't have too many colleges. Okay, I will add that delusion is a difficult mindset to cure, more on that in a moment. And something that just continues to point me, to poke me a little bit, I think the story is most OU, Oklahoma University freshmen are not Oklahomans. I will add to that as we get to that story. But first, of course, layoffs and cutbacks and the story from St. Rose. They got $35 million for their assets. $35 million. They needed something like $61 million to pay off its debts— banks, bondholders, other debtors. Beware, be wary. Columbia College in Chicago, a regular participant, frequent flyer I like to call them. Columbia College in Chicago to discontinue several degree programs, lay off faculty members. This is just a continuing story from Columbia College in Chicago and it comes from CBS News, Adam Harrington, Vince Flores, and John Odenthal on CBS News Chicago. And they announced plans, this Chicago College, excuse me, Columbia College Chicago, announced plans to consolidate or discontinue several of its degree programs and lay off more than two dozen faculty members. This is on top of the layoffs and cutbacks they have done recently. But here's kind of what, what caught my attention. So here's what they're not going to offer starting in the fall of 2025: Environmental Studies, American Sign Language, Cultural Studies, Art History. And they will also cut seven programs: Creative Writing, cinema and television producing, fine arts, photography, and a couple others. Now, I look at this story and believe it or not, even though it's probably a day late and a dollar short, believe it or not, I like what Columbia College is doing. They are shrinking not to grow. That's not gonna happen. They are shrinking to survive, shrinking to survive. And I believe their playbook is one that many other colleges should follow in the coming months and even coming years. I really liked how they are taking specialized disciplines, as I said above, and consolidating them into more general degrees or majors. So, so good for them. But of course, there is a follow-up story, and once a college changes any part of its business model, there are almost certain to be protests. In the Chicago Tribune on December 18th, Rebecca Johnson had a story. Headline reads, "We want stability: Columbia College Chicago students and faculty consider options." amid program cuts and impending layoffs. And the stories there— and of course, I'll have the link in the show notes— this shows the logical and, I would offer, somewhat avoidable human impact on choosing a financially unhealthy college. And we talk about them all the time, not only on this show but in the College Financial Health Show I do every Tuesday with Matt Hendricks. And, and I've got a new app, and I think I might have talked about this last week. It's about ready for release, probably later this month or the next month at the latest. And it is the 2025 public and private majors completions. And what I want students and families to do, and even colleges and faculties, to look at this app, buy this app because it can be for sale, buy this app to see which colleges offer or have large numbers or larger numbers completions in 67 different, mostly common majors. And I've talked about this before, if a college has a journalism major and 5 students graduate and another one where 50 students graduate, you got to know which one's at higher risk of being cut back or closed altogether. And again, college dribble continues to get in, continues to get comments on social media. And this is, uh, college dribble from a college just coming off the Higher Learning Commission probation. And again, I don't name names, I don't name colleges here. This is the best possible outcome for this college. Again, just coming off probation, the best possible outcome for the college as well as for our students, faculty, and staff, said the president of this college. They continue to offer our students excellent education, an excellent education, while contributing to growth. I'm going to give you the geography. While contributing to the growth of the Milwaukee area and beyond. We are grateful to faculty, staff, and trustees who help demonstrate our strength, really our strength to the Higher Learning Commission. And it looks like college drivel is going to be a regular feature on the podcast, so it might be the same kind of stuff, but it's just so silly, really our strength when they're just coming off probation I've got more about that later on in the podcast. Speaking of college dribble, massive college closures remains a misunderstood myth. This comes from Derek Newton writing for Forbes on December 16th, and I'm gonna get a little aggressive here. First of all, it would be nice if Mr. Newton would write a different article on occasion. He regularly posts essentially the same article trying to make the historical case that colleges aren't closing as fast as perceived. All right, well, it's easy to write an article if you create a suggestive title like he did and then write in support of it. Common tactic, nothing wrong with that. But the issue is not historical, Mr. Newton. The issue is current and future data. And it's not necessarily college closures, it is the incredibly weak financial health of scores, if not hundreds, of mostly private colleges, some publics. And for those of you that follow, for those of you that follow Tuesday's The College Financial Health Show with Matt Hendricks and Gary Stocker, we use Matt's AI-generated compilation of 8 years' worth of financial statement and IRS Form 990 data and compare colleges to their statistical and sometimes geographical peer groups. The visualization app Dr. Hendricks created places colleges on 25th, 50th, and 75th percentiles. It is a fascinating visualization. And there's one more for those colleges and for those looking at colleges in trouble. Dr. Matt Hendricks has added a visualization line with a median value of 9 recently closed private colleges. You don't want to be anywhere near that line, and yet week after week, colleges, still open colleges, track along the same patterns in many, many cases as those colleges that have already closed. And we've reviewed 52 private colleges since we started the show just this past August. And there have been a handful, certainly a handful, with clearly strong financial positions. There have been many, many more whose actual financial data is scary bad. And I don't and won't— I don't and won't predict college closures. Just, just look at the data. Look at the data I provide in the College Viability app. Look at the data Matt Hendricks provides in his visualizations. The colleges themselves are showing you which can survive and which cannot. And this is one of the main reasons I do this. This is one of the main reasons I engage in so much media. Traditional higher education media too often reinforces what has been. I am your alternative, your alternative higher education media source. It is the financial and operational data that matters, for better or for worse. Page 2: enrollment up at the University of Arkansas Little Rock for the first time in 15 years, so reads the headline in Arkansas Money and Politics on a story posted on December 20th by that publication, by that website. I should have put this whole story in College Dribble, but I'm going to take it on as a poorly prepared spin story. So here's the first quote: The University of Arkansas at Little Rock saw its enrollment increase in the fall of 2024, the first bump in the number of students at the school in 15 years. Yet nowhere Nowhere in the story does it tell us what that number is, what that enrollment increase is. I'll give you data. The story didn't. From 2015 to 2022, the last reported data for Arkansas Little Rock, full-time enrollment was down from a little over 7,000 to about 4,600 and change. Down, decreased, lower by 34% over 8 years. Over the last 8 reported years. And so the chancellor at the University of Arkansas Little Rock, Christina S. Drail, had this quote in the story: We are thrilled— now listen to this critically— we are thrilled to see a significant increase in enrollment for 2025, which reflects the dedication of our faculty, staff, and students in making UA Little Rock a dynamic, welcoming place to learn, said Chancellor Christina S. Drail. Now I don't know what she means by enrollment for 2025. I'm gonna add some more here in a second, but there is no even close to finalized enrollment numbers for 2025. Is that a typo? Is that with intent? I don't know, but that, that seems off. She goes on— Chancellor Drell goes on— our strategic focus on expanding access— I'm, I'm making that a bold red on my notes here— on expanding access, and read that as giving away revenue Expanding access is giving away revenue. And enhancing the educational experience has helped us welcome more students to campus— they won't count them or tell us— to build the career path to their future. And you know I'm going to talk about graduation rates in a minute. The story goes on. UA Little Rock reports a surge in undergraduate interest— soft as it can be— undergraduate interest for the fall 2025 semester. So they're mixing things up here. I don't know what's going on. With applications up 37% and admissions rising 50% and change compared to the fall of 2024. All right, I've talked about this before. Let's do it again. These are both one-sided indicators. You've heard me tease that college applications, adding college applications are like ordering another ingredient, another ingredient on your pizza. Check a box and the pepperoni— excuse me, application— check a box and the application is added to yet another college. And acceptances, excuse me, acceptances are only from the college side. That does not reflect a student placing a deposit for that college. Just, uh, and this is yet another example, yet another example of how poor the higher education reporting is in this country. They take this drivel— yeah, I'm dragging that in there— they take this drivel and try and pass it off as news or service to readers. I don't know what they're trying to do. Do they, do they, do they think we're stupid? I can't answer that. I don't know. More likely, they are betting that there are a few people like me out there willing to point out this example of what I'm calling regurgitating reporting. It's an alliteration, otherwise it had another word that was meaner. Regurgitation reporting, where a media outlet takes a college's press release and treats it as real news. And I promised this a minute ago, regular listeners know what's coming next. At the University of Arkansas, Little Rock, the 4-year graduation rate averages around 20% over the last reported 8 years? Could we maybe— sarcasm alert, sarcasm alert— could we find a reporter who might like to make that a story? And it's unlikely, again, it's unlikely that colleges like University of Arkansas Little Rock will announce during their May 2025 graduation, hey, we graduated 2 out of every 10 students who started here. Double, double, double, double geesh. And I'm not, I'm not going to let this one go just yet. Bear with me. The story goes on to say a key factor driving interest in UA Little Rock's robust— is robust scholarship offerings such as the Trojan Guarantee. Got to be careful with those names, which provides a zero-cost bachelor's degree for qualifying incoming freshmen. The continued— this is a Decker, I don't have a quote on this— the continued momentum in our enrollment numbers is exciting. I'm Decker said, I don't have a name on that, is a testament to the hard work of our team, blah blah blah blah blah. Ladies and gentlemen, I, I've got to fix that. That's not right. I propose, since they have a zero-cost bachelor's degree for qualifying incoming freshmen, I propose a zero-cost New Year's Eve party at select restaurants in Little Rock, Arkansas, to memorialize the concept of giving away the store like they are so proud of at the University of Arkansas Little Rock. And there will be hundreds of people at each of these restaurants having a great time, making new friends, and who knows what else. And the restaurants won't make a penny. Double jeez again. Uncertain changes is the next headline. Uncertain changes loom at accreditation conference. This was the Middle States Commission on Higher Education earlier this month. The story is on December 16th from Josh Moody at Inside Higher Education. A couple quotes that I just want to point out. From this commission. Jonathan Perry— I hope I had that right, sir— Jonathan Perry, or Perry, who's the president of Manor College— I need to check on their finances— Manor College, and a Middle States commissioner. They all fielded questions about whether Pennsylvania, which faces grim demographics, has too many colleges and whether some should close. And 4 already closed this year. It has the most, as those— most of any state in the, in the, in the country. And here is what Dr. Pearl, excuse me, Dr. Perry says, Jonathan Perry. My perspective is that the issue isn't too many institutions. I'll say that again. President of Manor College says, my perspective here is that the issue isn't too many institutions. It's what is preventing students from being able to access or achieve college. Again, I'm not quite sure I know what that means. And he did note cost concerns is one factor. I'll tell you, sir, Mr. President, Mr. Dr. Perry— I presume a doctor— it's the market. They don't like what they're getting. They don't want to invest time or resources in what you're providing. It's the market, sir. And asked if accreditors were doing enough to detect financial issues early, Perry Perry, all right. Perry suggested that, and I quote, "The relationships that our institutions have with our accreditors are ones of synergy and strong communication, and what we've seen in the press are the outliers." They really have to have folks read this over before they release it. He says troubled colleges are marked by a precipitous drop-off in enrollment and a lack of effective communication from administrators. A precipitous drop-off, sir? The IPEDS data, the College Viability App, and others— it's not precipitous, it's chronic. Many colleges over the last 8 reported years, 2015 to 2022— the 2023 data will be out in the 2025 College Viability Apps in early 2025. It's not precipitous, it's chronic. Look at the data, sir. And then another college president, MacLeod Walls, from Washington and Jefferson College, said accreditors appear to be paying more attention than ever. But she noted that sometimes accreditors can't keep up with events. While colleges, she says, while colleges regularly provide financial data All right, I'll give her regularly, even though that's sometimes posted about 2 years later. It can be hard for creditors to account for unexpected fiscal issues that arise suddenly and deal severe or fatal blows to institutions. She goes on to say, very often financial stress that leads to closures happens very quickly. I don't buy that for a second. She continues, it's cumulative. It can happen both very quickly and be cumulative. It's cumulative and it takes people by surprise. Not if it's cumulative, ma'am. But one bad financial move by an institution that's already suffering can lead very quickly to having to make really tough decisions. I think she's talking about closures. And again, McLean Walls, who's the president at Washington and Jefferson College. Ma'am, no, no, no. The warnings are in the data. I look at it, if not every day, almost every day. Matt Hendricks and I review the financial health and viability of at least 3 private colleges each week. Too many accredited colleges have negative net income. Negative net operating margins means they're not making money. Decreasing net tuition revenue means students are paying less and less and are borrowing too much from their endowment. And they clearly have revenue and expense imbalance and much, much more that I'm not going to take time to talk about here. If I have the data— a guy sitting in a bedroom slash office slash recording studio in St. Louis, Missouri— if I have that data Why don't accrediting agencies like Middle States and the others— and if they have it, if they have it, why are they not using it to give students and their families and the public in general a heads up, a heads up on colleges with an unsustainable financial future? Page 3. Most OU, Oklahoma University, freshmen are not Oklahomans. This is a story in the Center for Independent Journalism on December 8th, December 18th, at CityNewsOKC. Ray Carter was a reporter. Now, his quote in this story reads, 3 out of every 4 students generating enrollment growth over the last decade at Oklahoma University are non-residents or non-resident students who did not graduate from an Oklahoma K-12 school. All right, that's, that's all I want to focus on. Here's the point. This is yet another anecdotal observation that students are choosing, in this case, big-name colleges, in this case a public one, over privates, over smaller privates, over privates in general. I don't know exactly because nobody's reported that yet, and it's still a soft observation by deduction until someone publishes data to suggest or to demonstrate that it's real, that the move is already underway. Students moving away from privates in general, especially the small ones, especially the ones where the vibe is bad on financial health and looking at larger public colleges. Page 4: Catholic University in Washington, D.C. faces a $30 million structural deficit amid higher education headwinds. The story from the National Catholic Reporter on December 19th. So let's go to the data, and I'm going to start off— Catholic University has some positive news. Graduation rates are really good, really good at 4 and 6 years. You can look in the College Viability app to see what they are. The endowment is strong. At— in 2022, it was about $360 million and change. And the draw on that endowment— they're essentially leaving their endowment alone at Catholic University because it's actually below the 50th percentile. This comes from Matt Hendricks' apps. It's below the 50th percentile the past 3 years. That's a good thing. They're not dipping into the piggy bank to keep the lights on. Yet at Catholic University, the net income margins have gone negative those same past 3 years. FTE enrollment is down about 1,100 students, 21%, from 2015 to 2022. For that same period, tuition fee revenue has plummeted $30 million, and total discounts and allowances are up $22 million. Those two go hand in hand. Total discounts and allowances, merit aid scholarships are up 26%. And most concerning from my perspective, I would assume from financial professionals elsewhere, unrestricted net assets have gone below zero compared to 2016. That's, that's never good. And you've heard me say this before, and here's the point I want to make: why the wait? There's some good news for sure, but why the wait? To react to negative business patterns that have not happened overnight. And contrary to what the president of George Washington University— no, it's not right— the president I talked about before had observed, it's, it's, it's, it's right there in front of us for year after year after year for many of these colleges. And in the case of Catholic University, it's there for at least 3 years. At least 3 years. Keystone College has been in trouble all year long, has had its accreditation, has been put on probation, and now that probation is being appealed by the college. And this is a story: Keystone College challenges appeal to withdraw accreditation. This is from Ricky Turner at Yahoo News. And Keystone College's president, John Pulo, released a statement saying, all right, I'm gonna read it. As I have previously stated, we strongly disagree with— we strongly disagree with and are extremely disappointed by the commission's— this is the Middle States Commission's— adverse action, but we are grateful for the opportunity to pursue our appeal. And they're entitled— we were, we, we were all well aware that the process of rebuilding Keystone and changing our trajectory will not be easy. But he says, Dr. Pullover says, it remains a process worthy of every pursuit. We feel the adverse action taken by Middle States Commission on Higher Education significantly undervalues the progress that college has made over the last year to strengthen our financial situation, rectify our weakness, and move forward. He goes on to say Keystone will remain accredited And I think I read somewhere else that appeal process will be resolved probably in the first half of 2025. So finally, an accrediting agency steps up. I've had this story on the podcast before. An accrediting agency steps up with almost incontrovertible information that a college cannot reasonably be expected to survive. Good for Middle States in this case. Have passed on other opportunities. I hope that starts to change more in 2025. And I don't have an argument with Keystone's appeal. They're entitled. That's the rules. Play by the rules. I do, I do have an argument that they are so callous, so callous, without regard to their students, their faculty and staff, and communities, to believe their science, to believe that their survival is anything more than a short-term exercise in academic futility. There are other colleges out there. There are many other colleges that can successfully serve the students from Keystone. It's not like English 101 or even Biology 450, whatever they're called, are any different at Keystone than they are at other colleges. Just stunning to think college leaders don't know when to step away from a situation that is harming so many with these delays. And I want to wrap up the story with, with really, I guess, just some appreciation. Appreciation for the thousands who have listened to This Week in College Viability. I'm grateful. I am sadly Certain that 2025 will be a higher education rerun of 2024. Will the higher education bubble burst, finally burst in big numbers? Will we see a rapid series of private college closures? I think that's a risk. And mergers, public college layoffs and program cutbacks for faculty and staff. And will the slowly arriving, really slowly arriving demographic cliff create even more chaos than many have predicted. I'm gonna be here. I'm gonna be here to help sort it out from my perspective as your alternative higher education media source. Again, thanks all. For College Viability, best of the holiday season. I'm Gary Stalker. Until next year.