Cazenovia College in New York closed and sent its students to nine other private colleges, but analysis of enrollment, revenue, and endowment data shows eight of those nine schools are themselves financially at risk. Eight have endowments under $50 million, most have declining enrollment, and most are discounting tuition by thousands of dollars per student.
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Hi, this is Gary Stocker. In this update of the financial health and viability of private colleges, I want to talk about the recent closing of Casanova College in New York State. It's not just the closing, because a couple of days after that news came out, They released a list of 9 colleges in New York State that Casanova was sending its students to to continue their education. A certain— certainly a nice gesture, if not a required gesture. But here's the concern that I want to share with you. Of the 9 colleges that Casanova is sending its students to to continue their education, most are themselves financially at risk. In this episode, I'll go through those colleges and continue to ask the question: is anybody looking at the financial health and even the viability of private colleges? So we provide this guidance because we have some concerns. We have some concerns that the private colleges that Casanova is sending its students to are not as financially healthy as we might want them to be. And you can see the summary screen right here. In a second, I'll show you each of the individual items, but the fact of the matter is we have colleges who are themselves financially at risk looking to accept students from a college that's already announced its closure. So let's look at these by line item. So 8 of the 9 have had decreasing FTE enrollment. They haven't been able to draw more students. 6 of the 9 have had decreasing revenue, and this is from tuition fees. They're not collecting the revenue they need to grow. 6 of the 9 have had decreasing expenses. Now, this can be a good thing and a bad thing. It's good because you always want to keep your expenses under control, but an argument can be made that if you're decreasing expenses, at what cost to quality, to quality education, is your organization facing? And then we look at 8 of the 9 had a 2020 endowment of less than $50 million. Now, the $50 million threshold is one that I use and many other use as well, but it shows for 8 of these 9 an inability to have the systems and processes in place to raise funds from alumni, friends, and others associated with the college. And then of more concern are these last two. And the 4 of the 9 had 2020 4-year graduation rates of less than 50%. 50% is my threshold, others use the same kind of number. And when we look at the ones for 6 years, we can see that 8 of the 9 had 6-year graduation rates less than 70%. Now when we go back to that 4-year graduation, if you can't graduate more than 50% of the colleges, more than 50% of the students, you are kind of a coin toss college. So as we always do here at College Viability, let's actually look at the data. And we're using the 2022 parent version of the College Viability app, and we're looking at the screen that shows 6 years worth of changes from the years 2015 to 2020, the most recent IPEDS data available from the National Center for Education Statistics. We'll update that to the 2021 data sometime in early 2023. You can see this is a list of colleges including Casanova, and it's a summary screen of the 6 years of changes for each. And look at all of the colleges— let me sort this by enrollment change— and we can see of the 9 colleges, really 8 of them had insufficient growth, but 7 of the 9 had decreasing enrollment, just like Casanova. Here's the numbers for tuition and fees revenue. Now again, this is how much students actually paid, were billed, were invoiced for their tuition. And again, as I sort that from lowest to highest, we can see that there was very minimal change in those students who had— and I'm sorry, in those colleges that had tuition and fee growth. 1, 2, 3, 4, 5, 6 of the 9 had decreasing tuition and fee revenues from from that reporting period. You can see the expense changes. You know, the two that had some tuition revenue growth did show increase in expenses. Utica, you know, looking pretty good in terms of comparing it to the other colleges. They had a normal growth, they had tuition and fee growth, they matched that with expenses. But again, there's nothing typically wrong with that. And their endowment went up a little bit. If you look at the numbers over here on the enrollment change, if you've used the College Viability app before, you know you can look at the actual numbers. So let's click on full-time equivalent or FTE enrollment, and let's sort this by the, by the 6-year change like we just did. And we'll notice that when we look at the 6-year change for this data, we can see the losses, but also gives us a perspective. For example, Elmira at 700 students, Keuka at 1,300 students. You know, there's a range of enrollment here. When we look at Casanova at 600 students, it's one of the lowest. Wells College, I am stunned to see Wells College on the list of colleges that Casanova is sending its students to. They have had issues in the media. They clearly have enrollment issues. They're probably not going to make it either. What a trauma that would be for some students to go to Wells and it ultimately not surviving as well. And finally, I'm going to look at a different version of the College Viability App. It's one we do for college leaders, presidents, financial folks, those kind of people. So I'm gonna go just to one field on this College Viability Executive Analysis app for college presidents, financial folks, board members, those kind of things. And I wanna look at the 6-year change in what colleges are having to offer students to get them to enroll. You can call it a scholarship, you can call it merit aid, For the most part, it's a discount, just like you and I get when we buy cars or clothes or groceries, those kind of things. But let's look at Casanova, and over the last 6 reported years, on average, they've had to increase the amount of tuition discounting a little over $4,600 per student. We can see that most of these colleges have had to increase that tuition discount a substantial amount. When we look at those that haven't, and there's some details behind this I won't talk about today, but I can tell you even though Wells College has lower lower the amount of discount, their enrollment, as we saw just a moment ago, has continued to plummet. So what does this mean? We know that smaller, non-urban private colleges are increasingly at risk for financial health and viability issues. The big concern I have with what we're seeing at Casanova is they've announced their closing in, in May of 2023, yet they didn't do enough research on the colleges that they're sending their students to, most of which, in my estimation and based on the data, are at least as much of an at-risk, financially unhealthy college as is Casanova. There needs to be even more work than has been done in states like Massachusetts and Wisconsin and others to be able to give the public a better feel for which colleges are at risk. What we do at College Viability is provide comparisons for that risk. We'll never tell you that one college will close and one college is good, but you've seen the data in front of you from the app. It lets users compare easy attributes like enrollment and tuition revenue and graduation rates. It's the comparison that matters. We wish those at Casanova the very best. We ask that they look at the finances of the colleges they're considering and choose ones that are at least financially healthy compared to others.
