Will my College Close? Comparing Colleges - Rockford, Knox, Eureka, Beloit, Manantha Baptist

Are you looking for information about the financial health of a college you are considering? Or are you concerned about your private college that it might be in financial trouble? Might close or maybe just struggle to provide a quality education. Today's health and viability comparison is from a list of colleges submitted by a viewer. The 5 private colleges we're going to look at today are Rockford University, Knox College, Eureka College, Beloit College, Maranatha Baptist University. Hi, my name is Gary Stocker. For the past 5 years, I have been researching the financial health and viability of private colleges throughout the United States. In 2020, I created and released the College Viability App that I'm going to use today to compare these 5 colleges. During the video, I'll show you how to easily and quickly compare the financial health of these 5 private colleges that you may be considering. I can help you become more comfortable, more informed, and more confident in your final college decision. By the way, the data I use is from the National Center for Education Statistics. It's a federal government agency, and the data is from the period 2014 through 2019. Here is the first look at the 5 colleges. You can see them listed alphabetically on the left-hand side. I'm gonna provide just a kind of a quick overview of what our analysis is of these 5 colleges. And we typically use a battery indicator system, a red, yellow, green indicator, where red suggests we have a lot of concern about a college's financial health and viability. Yellow is mostly some cautionary tales that we want our viewers to be aware of. And green, by comparison, is a private college that we are much more comfortable with their overall financial health and really have zero concerns about their long-term viability. Let's just look at the 5 that we have here. Beloit College, we're going to give a yellow battery indicator to, and I'll go in more detail during the rest of the video. And the big part of our concerns is this expense and revenue imbalance. You can see that over the 6 reported years, 2014 to 2019, Expenses have gone down a little bit, $1.5 million, but revenue has gone down almost $18 million. You'll hear me say time and time again, this is the scenario where colleges, in an effort to get their expenses and revenues matched up more, will cut faculty, employees, majors, or courses. That's the kind of question you want to ask with a yellow battery indicator and such a gap between expenses and revenues. I look at Eureka College and we have Eureka College as a red battery indicator. A couple things we're looking at on this main summary screen, their enrollment is down over 130 students over 6 years. You know, maybe enrollment goes down once or twice over a period of 6 years, but to continue a downward trend over 6 years is not a good pattern. We have some concerns about their revenue, kind of like Ballard University. Their revenue, their tuition and fees revenue, is down over the 6 years. It's like running a business. You know, the revenue can go down on occasion, but it can't consistently go down over a 6-year period. And again, we see some revenue and expense imbalance with Eureka College. Their expenses are up about $600,000, and their revenues are— take that back. Eureka College's expenses are down about $600,000, but their revenues are down about $5 million. And we'll look at graduation rates, which are low, and endowments, which are low for Eureka, here in a few minutes. Knox College we have as a yellow, our focal point for Knox College. Again, we see the enrollment is down over the course of the 6 years, and the 6 years' worth of tuition and fees revenue is down almost $4 million. Not a good pattern. You can see the graduation rate is down a little bit. We'll see the actual We'll see the actual numbers in a minute. And again, the same thing we've seen with others. The expenses are up, $5 million. The revenues are down a little over $14 million. Not a good pattern. Be concerned about programs, degrees, majors, and faculty cuts in a college with that kind of pattern. And then we'll look at their endowment, which isn't bad for Knox College, especially when compared to the other colleges in this set. Marantha University, we're going to give a yellow indicator to. This is kind of a hand-to-mouth organization. They seem to have done a decent job of matching their expenses with their revenues. The expenses are up $1.2 million, but the revenues are up $800,000. Unlike the first 3 that we looked at, we'll give them credit. Uh, the main reason for the yellow indicator for Marantha is their endowment is really, really small. I'll talk about that in a minute. And their 6-year graduation rates are nothing to write home about. And then finally, Rockford University, we're going to categorize as a red as well. Here's why. Their 6-year graduation rates, really low, really low, almost embarrassingly so. And their endowment is nothing. Their endowment is so small as to give them no buffer, kind of like Maranatha University, in the coming years. So we've looked at the 6 years' worth of changes with this tab right here. Let's look at some of the individual tabs to look at the annual numbers just to kind of reinforce what we see and to give you some things to think about as you consider these colleges. Let's start with enrollment. Again, you can see the summary number over here in the next to, next to far right column. All 5 have decreasing enrollment. It's common throughout higher education. It's a concern everywhere. You can compare the, the numbers here. You can see that they're all relatively small colleges with enrollment from 1,300 down to about 700, 600 for Eureka College. But even looking at that, Eureka with an enrollment of 530 has lost 136 students over 6 years. You have to be concerned that they have been unable to reverse that pattern. The enrollment directly affects a university's, a college's ability to collect revenue. And by comparison, we have our little green, yellow, red indicators over here. These 3, by comparison, even though they're all negative numbers, had less drop in enrollment. Let's take a look at tuition and fees. Tuition and fees, you can compare the numbers from the 2013-14 time period all the way out to 2018-19. Again, that's the most recent data available. It's always lagged from the federal government. That's the best we have to work with. And let's remember that the College Viability App lets us compare one college to another. It's not an absolute indicator. It doesn't suggest that a college is good or bad. It just compares some financial and operational aspects of these colleges. So we can see that, for example, Beloit is down from $23 million in revenue from tuition and fees down to $20 million and change. Eureka, from $9 and change to $7.5. You can see the pattern all the way through. And again, we have some comparisons. We can see that the percent drop was not as much for— actually went up for both Marantha and Rockford University. As a comparison, that's something to think about. Let's look at the endowment. The threshold that we use for the endowment is $50 million. An endowment of $50 million or less is a general threshold to say, hey, this college, this university doesn't have the systems and processes in place to capture gifts from friends, families, alumni, and others. You'll have heard stories about some of the big colleges, the Harvards and Yales, with, with multi-billion-dollar endowments. They have the systems and processes, as do some of these colleges. For example, Knox and Beloit have decent endowments, well above the $50 million threshold that we look at, and this is for 2018-2019. You have to have concerns about Rockford and Eureka and Marantha, which effectively has zero endowment. It doesn't provide us confidence that they have the financial resources to survive downturns like we have just gone through. But more importantly, it indicates kind of a chronic or historical inability to gather gifts from those resources that we mentioned before. So when we look at a red battery indicator, Eureka College, for example, is red, that $22 million in endowment is just, it's not even half of what we consider the minimum threshold. Consider that when you look at these colleges. Let's look at graduation rates for the last comparison here. Again, we have a threshold, and it's used by many, but not by all, and it's a 6-year graduation rate. The threshold we use is 70%. So for every 100 freshmen who start, for example, at Beloit College, who's done a good job with this, for every 100 who start at Beloit, 75 have graduated with a bachelor's in something within 6 years. Again, our threshold is 70%. You can see both Beloit and Knox are above that number, but you'd, again, you'd have to have concerns about Marantha, and Eureka and Rockford's ability, historical ability, to develop the systems and processes to get students to graduate. I'll remind viewers again, this is a comparison. Does that mean Beloit College is a better college than Rockford University? I'm not gonna say that. It does mean that Beloit College, for the systems, processes, and students they have in place, does a much better job of graduating students than Rockford University. There are also some tabs at the bottom of the College Viability app screen that you see right here that give us a chance to compare some different expense categories per student or per FTE. And FTE stands for full-time equivalent applied as a student. So when we look at that, let's take a look at each of these. And I'm going to click on Academic Support per FTE. And all we're looking for here, we're gonna look at the most recent year, 2019, is big gaps.

So we talk about academic support, you'd want that number to be higher rather than lower. So let's go ahead and sort these by largest to smallest. So we can see that Beloit College spends about $3,500 per student on academic support. Rockford University, about a third of that. Draw your own conclusions. It's a comparison of the expenses that colleges have chosen to invest in their students. Let's look at the next tab, retention rate. Students continuing to persevere toward a degree at a college. And again, we can look at the changes. Some have been more growth than others. Some have actually gone down with the red indicators here. But again, let's just focus on 2019. Let me sort this by the year. And we can see that Knox and Beloit and Marantha do a decent job, especially by comparison when we look at Rockford and Eureka. Does it mean a higher or lower quality of student? I'm not willing to answer that question. It certainly suggests that Knox College, for example, has much better systems and processes in place to keep students coming back than Eureka College in this set of 5 colleges. And if you wanna look even deeper into the data, I'm impressed with the full-time retention rates for both Knox and Beloit.

But look at their change over the last 6 years.

They have struggled.

Both have gone from a mid to top Brady's number down to around 80.

I don't view that as a serious concern, but it's always a pattern to watch. Let's take a look next at institutional support. We'll call this administrative support, how much is paid per student for non-teaching faculty. That's a gross generalization, but it works. And again, let's sort this by 2019's data, and we can see that Beloit College spends a little over $9,000 per student, Marantha a little over $3,200 per student. It suggests that Beloit is administratively heavy by comparison, maybe, but it gives you a comparison. This is a dramatic difference. Much less so when we look at Beloit, Rockford, and Eureka. Those aren't big differences in my mind, but it's just another factor to consider. It's something else you can ask if you're considering Beloit College. Why do you spend so much on institutional or administrative support compared to others in your area? Let's take a look at instruction expense, and I believe by definition this is the actual faculty salaries, direct teaching salaries per student. And again, we can see significant disparities. Knox College represents themselves well.

It's up at $14,000 and change per student, very similar to what Beloit has. And compare that to Eureka and Rockford with numbers about $7,000 and a little over $6,000 per student. Next, let's look at tuition and revenue. Are the revenues from tuition and fees. And again, they've already been sorted. For 2019, you can look at the other years on your own, the data suggests that Beloit brings in $16,000 and change per student. Marantha, $13,000 and change per student. Now this is where the absolute number of students enrolled is going to have an impact, but it's a comparison you can use. If there were $16,000 per student and $5,000 somewhere else, You'd really have to wonder what's going on. And lastly, let's look at student service expense, support services for students. And again, we can see some significant disparities. Knox College, you know, I view this as a good investment in student support services, so the higher the number, the better. But look at the disparity—$7,000 and change for Knox, right at $2,000 per student for Marantha. Use this whole set of data to compare one college to another as you make your college decisions. So let's wrap up this comparison of these 5 private colleges. I'm not doing predictions. I'm not doing guesses. I'm just providing some simple comparisons of data that colleges themselves have submitted to the federal government. And it's information that many times comes from their independently hired auditors. You'll see, as you did today, some comparisons bode well for some of these colleges. Some comparisons should raise concerns in most of us. You or your loved one have earned, and to some extent deserve, a quality college education. I want to give you the information to help you make the best possible decision about colleges you'll choose. In this day and age, with the financial health challenges and even viability challenges that many face, you need to include the financial health indicators as part of your decision processes. You've already looked at the majors and the campus and the faculty, and you've compared lots of other things. You submitted the applications, you've done the FAFSAs, you looked at financial aid. Let's add a comparison of a college's finances, of its financial health, to your comparison. It's just an important additional factor to use in today's world. The one thing we don't want is to choose a college where right in front of us the finances have suggested best case is a lower quality college education, worst case an inability to continue while your child or while you are at that college. And by the way, If you have some additional sets, some additional private colleges you would like me to evaluate and compare, go ahead and respond in the comment section down below, and I'll turn that around as quickly as I possibly can. I'll let you know when it's posted. And if you like what you've seen today, if you'd like to see more of these, go ahead and make sure you click on the like down below. If you have any additional comments or questions, place those as appropriate down below. For years, higher education experts across the country have predicted and are continuing to predict there will be college closures, mostly private colleges, in the coming months and years. I created the College Viability App to make it easy for you to compare the financial health of these private colleges. Colleges check on your private health through the FAFSA. It's only fair, and it's important, that you check on theirs with data like what you see from the College Viability App. We have more than 1,300 private colleges for you to compare to make sure you make the best possible college decision for yourself or your loved ones.