Welcome to Beyond the (College) Brochure live show!

where we provide you information and guidance about college financials and decisions. My name is Mary McGrath, and I'm a current senior at Lindenwood University, and my co-host is Gary Stocker, who is also the founder of College Viability. Today we'll actually be doing our first live stream, both through LinkedIn Live and on YouTube, so thank you to all those joining us today. And Dr. Stocker, welcome to the podcast.

Mary, always good to chat with you. Do we get to watch a football game tomorrow afternoon?

Yes, we do. Tomorrow night, actually. It's a night game, so those are always fun.

Yeah, I look forward to it. What kind of questions do you have for me today?

Yeah, so to start us off, obviously we know that reading and understanding a college's financial aid offering can be confusing for anyone, especially students and families kind of in that college decision process. So what would you say are some of the financial games that colleges play with their financial aid offers?

Yeah, and really what I want to do— and thanks for the question, it's a good one— is I'm going to hold it up in front of my camera here. Yeah, there you go. An actual hard copy of an old-fashioned newspaper. Matter of fact, this one's so old, Mary, it's turning yellow. This one is from the Wall Street Journal. You've heard of that, right? Mm-hmm. And it was from June 14th, 2018. Here's the headline from the Wall Street Journal back in 2018: Financial Games Colleges Play. So let me just read a couple parts of the story really to answer your question. And there was the author, Kevin Carey, who's a well-known author in higher education circles. and he referenced a study that 11,000 award letters were sent out in 2016. It's been a while ago, but I'll make a point here in a second. By more than 900 colleges, it found, Mary, that most of them use obscure terminology, omit vital information, or present financial calculations that appear, Mary, deliberately deceptive. Many letters are confusing in their own unique ways, making it difficult for students to compare colleges. And a couple of other items that go with that, and from the story, every college out there can create its own financial aid award letter. There's no required standardization at all. So you have students and their families, especially first-generation, who don't know what to look at. Now, I'm going to give you a source in a minute. You've got a question, I think, later on about some good websites. But there was one college, and I'm not going to name the college, it was a university, and they sent a low-income student, again, this is out of the Wall Street Journal from June 14th, 2018. They sent an award letter to a student totaling, with totaling grants of about $26,000. That's all that was in the letter. They didn't tell the student, Mary, that was a $33,000 price tag. Do the math, $33,000 minus $26,000. That student showed up at this university back in whenever that was, owing $7,000 and didn't know it. Now that's just an example of the games that colleges play. And there's something else, there's one other thing that I had out of this Wall Street article and it kind of references college debt. And I know that wasn't part of your question. And the Wall Street Journal article concludes with, selecting a college is one of the most important and complicated financial decisions most people ever make. Right now, the Wall Street Journal says students don't even have enough information to to understand what they're choosing. That's a shame, the Wall Street Journal says, and it goes a long way, Mary, toward explaining why so many students leave college with a debt they can't afford to pay. And here's some of the details. Colleges will say grants, which should be free money, right, and loans are the same thing, and they're not. If I give you a loan of $10, you owe me $10. If I give you a grant of $10, I'm saying, Mary, take the $10 and do with it whatever you want. That's not— I don't think that's ethical. They leave out the total cost. We had that in the example from the Wall Street Journal article, and they consider loans as no cost. And again, I just mentioned that, but I want to reinforce that again. If you buy a car and the car dealer is uncomfortable with you not giving them any money because you had a loan for the full value of the car. And then lastly, I guess, the non-standard letters, which is what we talked about. And the organization that helps fix this is TuitionFit, T-U-I-T-I-O-N-F-I-T dot org, tuitionfit.org. They have a system in place, go there and check it out, that will let you compare financial aid offers from colleges and they help you standardize what's going on. It's not a good system. I don't know that there's any near-term change for it, Mary, and I, I feel for those thousands, if not millions, of families who have to fight their way through that.

And when a college or university does find themselves in financial trouble, a lot of students and families worry about necessary resources kind of going away as a result of that, whether it be through budget cuts or anything like that. So do students still have access to these resources such as labs or libraries or technology?

Well, sure, they have access to them for sure. You have to wonder though if there are financial challenges what the quality of those labs and libraries and technologies are. It's the same thing when it's time to get a new car, right? We can make do with a 10-year-old car that we have, but it doesn't have the maps, it doesn't have all the technology associated with it, the automatic steering, whatever the case may be. And is it state-of-the-art stuff? Probably not. And so, and I think you and I have talked about this before, it's not just that some colleges, Mary, have closed and many more will. There are many, many, many, many, many more, both private and public, that won't close, but you really wonder if they have the financial resources to provide the type of quality education that I know you're getting at Lindenwood University and thousands of other colleges that can do that.

And when a school does find themselves in financial trouble, how might they decide what specific academic programs to cut or maintain or even expand if they are able to do that?

Yeah, it's probably not fair for me to say to have a dartboard that they throw darts at, and whatever it lands on, that's the programs we're going to cut. I'm being facetious, of course. And many don't have the data or don't have easy access to the data, believe it or not, of the programs and majors inside of those programs, the numbers of students either in them or completing with them. And one of the things that you and I put together, we talk about, is the College Viability Program Completion App. We've done that work for you. I can tell you for any public and private college in in the country, how many journalism students completed that program in 2000. I got for 4 years, 2020 to 2023. Colleges in many cases don't have that. That's why I created that, so they can compare not just their data, but every other public and private college in the country. It's a sad commentary on the lack of usable management data that way, way, way too many colleges don't have, Mary.

And obviously you've been looking at college closures for quite a bit of time now. I would call yourself an expert, and I think you would call yourself an expert as well.

Yeah.

So with everything you've seen, would you say that college closures tend to be more common in a certain region of the country?

Yeah, and it's not just Gary Stocker talking. The common belief, and the numbers support, that the biggest risk and the biggest number of closures have been in the Midwest. Midwest and in the Northeast. And here's why. There are more colleges per capita in both of those regions. You look at the number of colleges, for example, in the state you and I are in, in Missouri. There's, I think, 23 private colleges in Missouri. Pennsylvania, if you have two of the worst, it's Pennsylvania and New York who have, I think New York has 100, something like that. Pennsylvania has close to 80. And that's just way too many. So that's where the highest risks are. But there have been college closures really throughout the country, even in the South, which has a few number, a few numbers of closures. Birmingham Southern University closed earlier this spring. There will continue to be college closures across the country, but most will tend to focus, I think, Mary, in the Midwest, in the Southeast, Midwest, and the Northeast.

And what would you say are kind of the top indicators of a college in financial distress?

Yeah, it's a good question. I know you've asked this one on previous podcasts that we have done. Thanks for adding this this is for the first LinkedIn Live and YouTube Live that we're doing. I'll give you a couple. And again, we have much more in-depth data on the series of college viability apps that we have. But look at the enrollment and don't look at the enrollment for the last year. Don't look at the enrollment for the last 2 or 3 years. Look back 8 years, look back 10 years. And do you know the name of the app that actually tracks that, Mary?

I do.

Yeah, yeah, yeah. It's the College Viability App. We have one for students and families. We have one for faculty. Interestingly, we don't sell very many of those, and we have a high-end version for leaders. We sell quite a few of those. It's decreasing enrollment, it's an endowment below $50 million, and that's the Gary Stocker College Viability Minimum. If you haven't raised $50 million in endowment, you don't have the systems or processes or even the population willing to support your college. You can also, you can also look at something— I'll talk inside baseball for a second. Called unfunded institutional grants. Most of us know those as merit aid or some, in many cases scholarships. And colleges tend to discount tuition to get the Mary McGrath and other students of the world to come to their college. Just like car dealerships will discount their cars to get you to buy their car versus the competition. That's happening so much in colleges that there's, it's good for the students, don't get me wrong, But it's not, it's, it's not that good for the colleges because that deprives them of revenue they need to do the things we talked about before— keep the building safe, fix the roof, fix the leaks, keep the grounds looking good, all those kind of things. You can also look at, um, colleges that borrow against their endowment. So again, the endowment is those gifts. Um, I'm just keeping a general, generalized description here. Many colleges— and Matt Hendricks and I talked about this yesterday on our The College Financial Health Show, many colleges are borrowing those endowment funds effectively, Mary, just to keep the lights on. And that's not a good thing for lots of reasons. I'm not going to go in that today, but that's an indication of a college in distress. And there are many other indicators, but those are the most important ones, I think.

So obviously after college, the goal for most people, I would say, is to join the workforce, find a good high-paying job that ideally they like to do and like being in. So would you say that a college degree guarantees a higher income, or does it not really have an effect on that?

Well, you know, Mary, that's an awfully strong word, guarantees. And no, there's, there's no guarantee at all. Now, you and I both know, as most of the listeners or watchers, viewers of the show, of the live feed today, talk about, you know, finance, marketing, your two majors you're looking at, data majors. You know, a lot of healthcare majors, accounting, those high-demand, sometimes high-intellect skills, those will mostly guarantee income above the average. Of course, it's going to depend on the, on the individual. There are some finance majors out in the wood that will make hundreds of thousands of dollars over their careers more, and there are some finance majors out in the wood who won't get it done for whatever reason. But that's— so there's no guarantees. But there is one caution, and I'm sure my children did that, but they're long since gone. They're adults now. And you may have gone through this, and I see this continually. 17 and 18-year-old high school students say, "I want to be fill in the blank." And that's fine. They're entitled. But I would encourage them to be careful about just, "I want to be a whatever." And look at the data that's out there that shows the income associated with whatever the I want to be is. If you want to be a social worker, God bless you, go get them. But your compensation is not going to be the same as a finance major, an accounting major, a nurse, a physician, a dentist, a lawyer, all those kinds of things. So just, you know, at 17 or 18, it's probably not fair for us to say, pick a major. Because you probably just don't have all those brain cell connections yet to make those good balanced decisions. And I think families support the pick whatever you want to be. We love our children. We want them to be successful. But I think there's that financial component because college, 4 years, life, 40 years. You got to think about the consequences of the decisions you make for a major and the impact, both good and bad, it's going to have over the following 40 years. 40 years.

And is it possible for students and families to get a refund on the tuition they pay, especially if the school they're attending now is in financial distress and they kind of want to get their money back on that one?

Yeah, well, I'll give you a qualified answer. It depends. If you don't like your finance instructor and you go to the folks at Linnewood and say, I want a rebate or tuition refund on my finance class, they're going to giggle at you. They're going to say no. Buck up, learn what they're teaching you, and go for it. If the college closes, there are systems and processes in place that you can ask for refunds. I believe there's even some federal guidelines if the college can't afford it. There's federal policy, federal funds that will support that. So if you just don't like something in the college, it's unlikely you'll get a refund. If the college closes, you're almost certain to get a refund of your tuition paid for that term. And I think the following term as well.

And I know you kind of touched on this one earlier, but do you have any examples of podcasts or videos that students and families can access to help guide them in the whole college decision?

Yeah, if there's one I would encourage all the viewers to go to, it's the one— it's TuitionFit. Mark Salisbury founded that. That's tuitionfit.org. He's got all sorts of training on that. That's a big win right away. Because it tells you how to compare college financial aid offers and all the ugliness associated with that. And there's 3 others that you've been familiar with— excuse me— This Week in College Viability. Every Monday midday, the Honorable Gary Stocker— that's me— does news and commentary on all things higher education. It provides a perspective that most students, families, college leaders, faculty members don't have. You may agree with me, you may disagree with me, but it's a perspective on news analysis that I do every Monday. Um, the College Financial Health Show that I do with Matt Hendricks is a video show, and it's released every Tuesday afternoon. Um, and we look at the college finances both from the tool Matt created and from the College Viability App. And there's another one called Beyond the College Brochure with Mary McGrath, random person. Yeah, and the reason you want to listen to that is Mary finds questions that parents and students— because she's a student— should ask, could ask, might ask of college admissions rep, college representatives, and they don't. And so not only do we get the questions, but of course I've got the experience and the perspective to say, hey, here are some things to think about in that context. And then be thorough. I went out and before we jumped on the live stream, and I did a search on, on top videos podcasts for college decisions. And there was one who was from Feedspot, F-E-D-Spot, which had 60-some-odd ones to go to. I read through some of them, Mary. Go to that kind, do the search, find one that looks interesting to you and take a look at those. There are many out there that provide guidance. Very few, if any, offer the kind of topics you and I do in the context of the financial health and viability of colleges, but yet they all provide valuable information in some form or fashion, right?

And with that, it'll be a wrap for myself and for Gary Stocker. Thank you for joining us today on our first live stream of Beyond the College Brochure podcast, where we provide you guidance on college decisions, financials, and much more. If you have any questions or concerns about the financial health of colleges, please send them my way to marym@collegeviability.com, and we hope to see you next time. Thank you again for making time to join us.