This Week in College Viability (TWICV) for October 16, 2023

It's October 16th, 2023. It's the This Week in College Viability podcast. Hi, I'm Gary Stocker with College Viability. On our list of colleges to cover today is the long list of Christian Brothers University and Vermont State University, Keuka College in New York, I believe, Lesley University, Chatham University in Pittsburgh, And we can't have a This Week in College Viability without mentioning the sad state of higher education in Wisconsin. And we'll wrap things up with Defiance College in Ohio and Columbia College in Missouri and all the closures it has across the country. The first headline is Christian Brothers University took out $4 million from their budget to address deficit. This is from Natalie Schwartz in Higher Education Dive. Higher Ed Dive, Natalie has regular stories posted there. And Christian Brothers has declared a financial exigency. Now that's a big deal, and it says we aren't going to make it without really saying we aren't going to make it. But the university nonetheless went along and said, and I quote, under university policy, entire departments or academic programs may be eliminated during times of financial exigency. Let's go to the data, as we always do. The endowment is at $40 million, and that was a 2021 endowment. Of course, our minimum threshold is $50 million. In 2021, the good folks at Christian Brothers University admitted 97% of the students who applied. They fall into the admissions policy of 'have breath, will admit.' That's up 47 points in 8 years. And, and It's typically reflected in 4-year graduation rates, although theirs has increased a little bit from 2021.

I have to question that the 8-year trend on that.

Their unfunded institutional grants is up $12 million, and of course that means they're giving away the store to get students to enroll in addition to admitting almost everybody who applies. And their funded grants, although are decent at $4.4 million, many colleges are smaller than that and their graduate enrollment is up 100-some-odd students. So the deficit is projected to be up to $7 million by the end of 2024. This is from the university. And here's what really gets me. Christian Brothers plans, the story reports, to establish a retrenchment committee. Now, retrenchment is an interesting choice of words. It's going to establish a retrenchment committee to recommend cuts to the university's president. Christian Brothers officials said the university is not closing. We are taking these extraordinary actions to ensure that CBU, Christian Brothers University, continues as a flourishing and prosperous 4-year establishment for the foreseeable future, the university said in an FAQ. Okay, and I'm not getting any older. Vermont State is the next story. The Vermont State president recommends cutting 10 degree programs and up to 33 faculty positions. And this is reported by Peter DiIorio in the Vermont Digger.

And the Vermont Digger has some good stories on occasion.

And Vermont University in the story is reported to end 10 degree programs including agriculture, music, and school psychology, and lose around 20 to 30 faculty positions. Interim President Mike Smith said in a draft report issued in early October. The university, Vermont State University, was formed this past summer through the merger of three public institutions, and we've seen this in other states, and they're going through some trauma and expected to be so.

The three public institutions that merged into Vermont State are Castleton University, Northern Vermont University, and Vermont Technical College.

And the merger was intended to put the three on a pathway to financial stability, and it may, but the results so far are not good, and we'll have to watch to see what happens. Now, this is where it also gets interesting. Mike Smith's term ends November 1st, a couple weeks from now, at which point he will be succeeded by the recently hired interim president David Berg, who is expected to run the university for roughly 18 months. So it looks to me like we have some musical, musical presidential chairs taking place at Vermont State University. And last month, to wrap this story up, in response to complaints from faculty and staff that Vermont State University employs too many administrators, Smith vowed to examine the institution's administrative positions and their effect on the budget. Now, we can't look at the 3 combined data pieces, but I do want you to know that one of the fields— for the fields that report in the public version of the College Viability App compares how much colleges spend per student for admissions— excuse me, for academics, for instruction, for institutional expenses, which is what they're talking about here, and for instruction expenses. So you can actually compare based on per student.

So it's a nice standard comparison who is spending more or less on each of those 4 categories. Next is Keuka College. K-E-U-K-A.

You can send your letters to me about how to pronounce that. Keuka College's financial health is strong. And Keuka College, or Keuka College, is in New York. And this was early October from Lucas Day from the Finger Lakes Daily News. Now the spin in this story from Keuka College is so bad that I had to race to get a bottle of ibuprofen after reading it. Now I've got the data in front of me, and the college is claiming a budget surplus. Well, all right, they can claim that, but they're the only ones who get to see their budget. That's not typically a public document.

I went to the 2022 audited financial statements for Keuka College. I see a $700,000 surplus in 2022 but a $2 million deficit in 2021. But I've got a screenshot of the College Viability app in front of me. Kuka College, their FTE enrollment from the years 2014 through 2021 was down a little over 500 students. Their tuition fee revenue was down about $4.5 million. Their graduate enrollment was down a few dozen at 32. They had in 2014, a little over 1,700 students, and in 2021, they reported their full-time equivalent fall enrollment at a little over 1,200 students. And finally, the graduation rates for Keuka College in 2021 were 45% after 4 years and only 50% after 6 years.

Folks, Keuka College is not even a coin toss college They can't even graduate half of their students in 4 years.

Actually, they can't even graduate half their students in 6 years. It's not a good situation. I— and they're doing an apples-to-oranges comparison. These folks are doing an apples-to-oranges comparison. An internal budget is not the same as an audited financial statement. The Finger Lakes— in, in the story, the Finger Lakes Daily News reports something along the lines of $17 million in USDA loans. Now, USDA stands for the United States Department of Agriculture. If you follow higher education at all, and I do, the USDA loans typically are a loan of last resort because places like Keuka College can't go to a legitimate bank and ask for a loan because they don't have the collateral to be able to do that. And so the USDA provides loans through a legitimate government program, but Time and time again, we see USDA loans being a loan of last resort. Read that any way that you want. And then the good folks at Keuka College announced in spring of this year, they unveiled a 3-year, $6 million capital campaign. In the entire history of Keuka College, they have something in the vicinity of a $14 million endowment. And they think in 3 years they can raise $6 million. What are they thinking? They don't have the systems and processes in place to do that. And that's why I'm here.

Colleges can spin the financial stuff any way they want, but someone please tell the good folks at Keuka College and elsewhere that they can't pull the wool over everybody's eyes. Lies.

You can fool some of the people some of the time, but with the College Viability App, you can't fool all of us.

And this is a triple geesh.

Next, let's go to the Boston Globe and our friend Hillary Burns, who writes a lot of good stuff for what's going on in the Boston area. And Lesley University is laying off faculty members, cutting programs amid a budget crunch. What else is new? And the quote from Hillary Burns from the university is, under financial pressure Leslie University is laying off faculty members and eliminating academic programs as part of a restructuring launched earlier this year to reduce expenses. And the numbers being bandied about are about 15% of the faculty. Some of them send me a mid-20s kind of number. And this is one of those cases where I went and looked at the institutional expenses. And the institutional expenses at Leslie College— excuse me, Leslie University— were $4,300 per student in 2014. They skyrocketed to $6,800. That's almost 50%, 40% per student in 2021. Whoa, financial geesh on this. What are they spending all that money on in terms of institutional expenses per students? And let's go on, you know, the president of Lesley, President Janet Steinmayer, or Steinmayer maybe, says some struggling campuses have merged with other institutions. But Steinmayer said Lesley is not considering a merger at this time. Now here's what's going to happen, because it's happened before and it's going to happen again. Lesley College either has already waited too long or they will continue to wait until it's too late. And when the last dollars are circling the financial drain, President Steinmayer and the board chair will do what other college presidents have done when their colleges were about to close. They'll start dialing for dollars with other colleges, and the other colleges will tell them, no, we're not interested in any kind of consolidation. You bring nothing we want to the table. It happens. It has happened time after time after time. It is predictable. Yet these college leaders are so entrenched and entranced with their parochial focus, they continue to ignore reality until it's, until it's too late.

Why wait?

The pattern of financial and enrollment challenges at Lesley has been underway since 2015. Why in 2023 are they now just now starting? And if you would please, it's, it's time to identify the last person who will turn out the lights at Lesley College. Their enrollment down is over 500. Their percent admitted has gone up from 71% to 87%. They're a borderline breathe-and-be-admitted colleges. And we see this percent admitted, it's not everywhere, to be fair. But this is an example of a college that is accepting students, I can make an argument, accepting students dressed to drive tuition revenue. And as a consequence, we see always— not always, regularly but not always— that their 4- and 6-year graduation rates suffer. They come to a number that's below 50% after 6 years. Just pathetic. And although Lesley has maintained an even retention rate over the last 8 reported years, they still lose about 25 out of every 100 students. Chatham University.

Let's go to Pittsburgh.

Reduces staff, streamlines operations to address budget deficit. What else is new? This is from Ryan Ditto, or Detto maybe, from the Tribune-Live. One of his, his storyline is one of Pittsburgh's small private universities is facing layoffs and cuts, joining a dubious trend hitting institutions of higher education across the country. This I have said so many times. The university said it is working to reduce its budgetary deficit and review academic programs as possible areas to cut costs. Again, why does it take so long?

And you can't cut your way to success.

You cut faculty, you cut programs, you cut degrees, you cut majors, people are going to quit coming because they have nothing to go for. You can only get out of this by significantly and materially, significantly growing your net revenue. It's in this market, that's the only way to get done. And the only way to do that is through consolidation, to make your smaller college bigger by working with others. And I'm not going to go into the details on this one. It's the same pattern that we've seen elsewhere. But I will quickly note that their full-time enrollment is up about 400 students over the last 8 reported years, but their unfunded institutional grants, if this data is correct, are up 174%. That's up $13 million over the last 8 reported IPEDS years. And we've seen it before, the good folks, the good folks at Chatham University are giving away the store to get students to enroll. Geesh, geesh, lights. Please. And Wisconsin, please. Will the last person, the last college person in Wisconsin turn off the lights there? University of Wisconsin-Green Bay is laying off 9. Oshkosh 200. Cardinal Stritch closed earlier this year. Lights, please, in Wisconsin. And then the next one is, I promised a listener I would take a, I would take a look at Defiance College, and this is in Ohio. And the headline from the story this person sent me was, "Defiance College on probationary status in one of 18 criteria required by HLC." Now I'm guessing Todd Helberg from the Crescent News in Defiance, Ohio, and this is from mid-July, so a couple months old, was trying to spin this a little bit. It's only one out of 18, not a big deal. But it is a big deal. And let's look at the data for Defiance College. Their fall enrollment is down 250 students over the last 8 years. Their admissions yield is down 12 points, from 22 down to a pathetically low 10%. That's not selective, that's just not popular. Their tuition and fees are down almost $6 million. Their graduate enrollment down 40, not a big deal. Their endowment is couch money, not much more than couch money, at $16 million. And part of the story reads, it talks about the HLC, the Higher Learning Commission, which is putting Defiance College in this probationary status. Now accrediting agencies like HLC, and there are 6 across the country, are really not much more than T-crossing and I-dotting organizations. They cross the T's and dot the I's. And agencies like these are notorious for giving colleges a pass untimely assessment and consequences for poor financial health. I think the folks at Defiance have until the end of 2024 or something like that. And I've seen time and time again colleges with accreditation from HLC and the other organizations— and the reason they do that is that gives them access to the Title IV funds for government loans and other things— but these colleges with accreditation The ones in trouble say, "We're fine, we're fine, we're fine, we're fine," until they quickly have to change and say, "Hey, we're closed." So don't buy the PR hype from colleges in trouble like Defiance College in Ohio. Make sure to at least also consider financially healthier colleges that you can identify using our college viability app.

And finally, Columbia College, just down the road here from me here in St. Louis, closing campuses. This is from Josh Moody and Inside Higher Education. Columbia College is cutting somewhere in the vicinity of 120 jobs and closing 17 of their 45 locations.

They did have a big growth spurt 10, 15, 20 years ago, something like that.

Here's the quote from Josh Moody's story. President David Russell said in a Wednesday news release announcing the cuts, Get the Advil for me. We believe these important steps, he said, David Russell, the president of Columbia College. We believe these important steps will ensure a strong future for Columbia College. And I guess he was serious about the next part, with minimal impact or disruption to our students' academic pursuits. Double geesh. At least FTE enrollment is down 8,000 students. Their 4- and 6-year graduation rates, undergrad graduation rates, are 19% and 27%.

Out of every 100 students who start at Columbia College, 4 years later only 19 graduate.

After 6 years, only 27% graduate.

I have to come up with a different word than geesh. Their tuition and fees are down $31 million.

If you're considering Columbia College, great, consider them, but look elsewhere.

As well.

And folks, I'll wrap this up. Awareness is spreading about the risky finances and viability of colleges, mostly private. We've talked about the risk at public colleges in previous podcasts, and I'll talk about those again in the future. But the list of readers and listeners sending me leads on college troubles is growing every month. This is real. If you're looking at colleges either for initial enrollment or to transfer to or to start up with, please, please compare the financial health and viability of the colleges you're considering. And we have both public and private versions of the College Viability App, and you can purchase those to make your own customized comparisons. And I'll give you the links in the show notes. And hey, this has been the October 16th 2023 episode of This Week in College Viability.

I'm Gary Stocker. We'll talk next time.