Will my college close? Iowa Private Colleges Side by Side financial health comparison

Today's College Financial Health and Viability episode looks at 5 private colleges in Iowa. They are Buena Vista University, Central University, Coe College, Clarke University, Grandview University. As a quick summary, none of the 5 looks financially strong compared to many others, and none of the 5 have been able to successfully manage expenses and revenues for the last 6 reported years. I use a red, yellow, green battery symbol to offer viewers an easier comparison of colleges, and of these 5 private colleges in Iowa, One, you'll see, has a red battery indicator, and four has a yellow battery indicator. I'll explain as I go along. Let's take a look at the first screen of data on these five colleges. And again, we're looking at five private colleges from Iowa. You can see the five listed on the left-hand side. And some, some patterns quickly emerge here. And we can see that each of the five, over the six reported years, and that's the last six years available from the National Center for Education Statistics, The data is a little old, but nonetheless, it clearly provides trends, both good trends and bad trend data for all of the colleges that we look at. And we can see right off the top that each of the 5, over the last 6 reported years, shows a decrease in full-time enrollment, from over 600 to Buena Vista, to not really much of a decrease at all at Coe College. But again, let's keep in mind this is over 6 years. No business wants its prime source of revenue, in this case students, to decrease over such a long period of time. We'll look at the individual schools here in a minute and each of the individual years. We can see again another pattern that each of the 5 schools we're looking at had a decrease in tuition and fees changed. So from 2019 to 2014, Buena Vista had about a $4 million decrease in tuition fees. Not a good pattern, not a good trend, and you really see that across all 5 colleges. Although Coe was essentially flat over the reporting period, it still showed no increase, and that's going to be concerning. I'm going to look at the graduation rate in a little bit more detail later on. The big indicator that I look at on this summary screen is comparing the 6-year change in expenses with the 6-year change in core revenues. And again, for each of the 5, we're going to see that expenses either didn't go down as much as revenue went down, or in some cases expenses went up, as is the case with CoCollege, and revenues went down. And as we look at each of the individual colleges in a couple of minutes, you'll see these patterns are consistent, and not just with these 5 colleges. This is a consistent pattern I see with almost all small to medium-sized private colleges across the country, especially in the high-risk areas of the Midwest and the Northeast. So let's look at enrollment, and we can see that these are relatively small, maybe medium-sized colleges. Clark University has dropped from over 1,100 down to 1,000, but they're all relatively small colleges, although not among the smallest. And again, we can, we can see that 6-year change, and as we compare the 5, We can see the biggest percent change was in Buena Vista and Central. While it went down, the smallest changes were at both Coe College and Grandview College. Let's go on and look at the endowment. I want to look at the endowment for the last reported year, and this is 2018-2019. And we can see there are differences for each of the 5. If you've watched these videos before, you know that I use a threshold of $50 million, 5-0 million, as an indicator of an acceptable endowment. Many others use a similar kind of number. Anything below $50 million suggests, one, that the organization doesn't have the resources to safely survive tough fiscal times, like pandemics, and two, they may not have the systems, processes, or even graduates that can provide the financial support needed both to grow the organization, to improve the organization, and to help it survive in tough times. And as we look at that, none of these 5 have exceptional endowments. Buena Vista at $137 million, way above average, way above our threshold. If you've watched these videos before, you'll notice it's not even close to being one of the stronger ones. And $80 million Central College, almost $100 million Coe College, not bad numbers by any stretch, but not the strongest that you would want, especially when you look at that imbalance that we saw earlier with expenses and revenues. And then two areas of concern, or two colleges of concern, would be both Clark University and Grand View University, well below that $50 million threshold. There are legitimate concerns that these smaller colleges with difficulty managing expenses and revenues and such a low endowment is at greater risk than others. And you can see that by comparison, you know, there are some differences here. Grandview University has raised their endowment from a piddly $20 million to $25 million, so it shows a green indicator compared to the others, but their absolute number is not a good number. And then lastly, before we go through each of the individual colleges, let's look at graduation rates. And again, there is a threshold number, and the graduation rate we study is over a 6-year period. So this would have been from 2014 to 2019. And again, the threshold that I use and many others use is 70%. An indicator of a 70% 6-year graduation rate. For example, we'll use Central College here because it's the closest. Over the course of, in the example you see on the screen, Co— excuse me, Central College graduated 67 out of every 100 undergraduate students who started in 2014. Now, some of those students may have moved on and graduated elsewhere, some may have graduated in 8 years, but the comparison that we use is over a 6-year period. None of these 5 colleges in the 2019 time period were over 70%. You can see that Central College had that number earlier, both Clark and Coe Universities, college and university, were right around that 70% earlier, but in both those cases, the graduation rate has declined. Not a good indicator of an organization's ability to put systems and processes in place to help students graduate in a reasonable time period. And remember, we're looking at a 6-year period here, not a 4-year time period. Every additional year a student needs to go to a college to graduate, both expenses associated with college go-up and the opportunity cost of lost income from having completed that degree and moved on to earning a professional income. That has also been eliminated for any year beyond 4. So let's look at the battery indicator, the strength, if you will, of each of these 5 colleges compared to each other and to others in their region. For Buena Vista University, I'm going to give them a yellow battery indicator. Yellow, of course, means there are reasons to be concerned, and I'll share those with you briefly. They have the strongest endowment of the 5 colleges, so that gives them some strength. But that's really balanced out in the negative when we go back and look at the 6-year summary screen. And having lost almost 700 students over the last 6 reported years, Their tuition and fees have gone down $4 million over that period. They have bumped up their graduation rate. I will take one last look at that here in a second. But again, a bad imbalance. While they tried to limit expenses, and they were down $2.2 million over the 6 years, the revenues went down almost 7 times more than the expenses did. And when we look at graduation rates, for Buena Vista at 60%, at best. That's modest. There are many competitors with a substantially higher graduation rate. That can mean lower overall costs. But again, 6 out of 10 undergraduates who started at Buena Vista in 2014 had graduated 6 years later. There's still, you know, there's still 60%, but there's still 40%, or 4 out of every 10 who started did not graduate from Buena Vista with an undergraduate degree in a 6-year period. For Central College, I'm also going to give a yellow battery indicator. There are a number of concerns. Again, their enrollment has dropped almost 250 students over the last 6 reported years. They've been unable to increase tuition and fee. They have been unable to increase the amount of tuition and fees they collect. Their expenses actually went up while their enrollment went down over the 6 years. While the revenue went down, core revenues, not just tuition, over $12 million over that reporting period. We look at the endowment for Central College at $79 million, almost $80 million, and it's probably above that now. It's not a bad number by any stretch. It's an okay number. And that's one of the reasons I stayed with yellow instead of red. And then lastly, when we look at graduation rates for Central College, you know, they were essentially flat over the course of the 6-year period. They had some increases a year or two ago, but again, at 67%, just below the threshold. There are many who do worse, but there are also many who do better. So a yellow battery indicator for Central College. For Clark University, I'm going to go with a red indicator for lots of reasons. Again, this is the same pattern that we see elsewhere, decreasing enrollment. Their tuition and fees have been down a little bit, not as much as we've seen previously. The graduation rate has gone down. There's some lagging indicators with that. You have to wonder what's going on that a graduation rate decreases over a 6-year period. And again, like we've seen other places, the expenses went down a little bit. They tried to manage their expenses, but the enrollment went down about 3 times as much as the expenses went down. And then looking at the graduation rates for Clark University, again, all these colleges with the possible exception of Grand View just barely below the threshold. Like I've said before, certainly many do worse, but there are also many who do much better. And keep in mind the cost associated with every additional year that a college needs to keep a student to get them to graduate. Co-college, also a yellow indicator. And again, the same patterns that we've seen elsewhere—decreasing enrollment, although not as much as others, pretty much flat on tuition and fees, I don't think that's a good thing because you'd like any revenue source to grow, especially over a period of 6 years. We'll look at the graduation rate in a minute. And again, they've increased expenses with essentially a flat enrollment, but the revenues have gone down almost $4 million over our reported period. Their endowment at CO is again above our threshold, not exceptionally so. And then when we look at graduation rates, like we've seen with, with their competitors not good, not bad. It all comes to a point where I'm going to give Coe that yellow battery indicator. There are concerns. And finally, Grandview University is a red battery indicator. There are lots of issues. The same enrollment pattern that we've seen with others, the same issue with decreasing tuition. We're going to see they have the lowest 6-year graduation rate of their competitors. And again, enrollment down but expenses up over a 6-year period. Not as big a deal if it's over a 1 or 2-year period, but over 6 years, there's going to be some concerns. And a substantial decrease in core revenues over that same reporting period. Their endowment is weak at $25 million. They have been able to grow the enrollment about 5 million over the last 6 years, but still not a good number. That $50 million threshold is still another $25 million away. And the graduation rate's the worst. Of all 5 of these colleges in the Iowa private colleges that we're comparing today. So a red battery indicator for Grandview University. As more private colleges start to succumb to financial pressures, you want to be able to compare one against the other in terms of their financial health and viability. I don't do predictions here, I don't do guesses, I just provide simple comparisons of data that colleges themselves have provided to the federal government and information from the auditors that colleges have hired to prepare their financial statements. It's all publicly available information. You deserve a quality college education. I want to give you information to help you make the best possible decision that includes not just the majors and the programs and the athletics and the dorms and the tuition and the faculty, but that financial health indicator. Keep in mind, colleges collect financial information on their students and families through the FAFSA. This is just kind of the reverse of that—information about the colleges for you to use in deciding which one is not just the best fit, but the best opportunity to get a a complete, high-quality education based on the financial health of the colleges you're considering. By the way, if you like this video, I would encourage you to click the like button down below. If you'd like to get notified every time I do an updated video presentation of a set of private colleges, click on the alert button or the alarm button, and you'll be notified when those are posted. And if there's a set of private colleges you are considering and you haven't seen it in the videos I have posted previously, drop me a comment down below, list the names of those colleges, 3, 4, 5, and I will add that to the list of comparisons and analysis I do in the coming weeks and months. The app that you saw today on this video is a college viability app that I created, and it's available to you. It's available for you to easily do your own customized comparisons of the colleges you are considering. I'll make sure there's a link to that app in the comments section and discussion section down below. It's available on an annual subscription for $47. I would encourage you to check it out, and I would encourage you to check it out. Now that you know how to compare the financial health and even viability of private colleges, you can feel more comfortable with whatever your final decision might be. If you'd like, invite me to a meeting. At your high school, for the parents of juniors or seniors as appropriate, and I'll provide a virtual review of private colleges in your region just for your group. You can contact me through the link at the website at collegeviability.com or at gary@collegeviability.com. Mm-hmm.