Will My College Close? Massachusetts - Selecting Private Colleges

Are you looking for information about the financial health of your private college? Are you concerned private colleges you are considering might be in danger of closing, might be in financial trouble, or maybe just struggling to provide a quality education? Hi, my name is Gary Stocker. For the past 5 years, I have been researching the financial health and viability of private colleges in the United States. In 2020, I created and released the College Viability App. During this video, I'll share with you how to quickly and easily compare the financial health of some Massachusetts private colleges you may be considering. I can also help you become more comfortable more informed, and more confident in your final college decision. The 6 colleges we're going to look at in this episode are all from Massachusetts. They're, of course, all private colleges. And that list includes Clark University, Fisher College, Lasell University, Simmons University, Stonehill College, and Suffolk University. All of the data that we're going to look at today is from the 2021 College Viability App. The data source for this is the National Center for Education Statistics, and it's IPEDS, I-P-E-D-S, database. You can see the 6 colleges that we have selected here, and I have sorted them initially by enrollment. And this is 6 years' worth of data, so we're comparing the data from the years 2014 to 2019. If you've seen these videos before, you'll know It's too long of a lag time, the colleges need to do better, the government needs to do better, but the, still the 6 years that we look at provides a trend. Sometimes a good trend, sometimes not so good of a trend. So let's start with these 6 colleges and the 6-year full-time enrollment, that's FTE or full-time equivalent enrollment change. So from 2014 to 2019, Suffolk University has lost about 900 students. And you can see the numbers all the way through for each of these colleges. We'll go over each individually in a moment. We're also going to look at the 6-year change from 2014 to 2019 in tuition and fees. This is what colleges actually collect from students. And again, we can see that some of the colleges collect more money. For example, Simmons has gone up $66 million. Some are not doing so well in collecting tuition because they're not having enough students or they're not charging enough for tuition, as is the case with Suffolk University with over $24 million in decreased tuition revenue. We're going to look at the 6-year graduation rate in more detail. And then the big comparison that we look at is we look at the change in expenses over 6 years as opposed to the change in revenues. This is effectively all expenses. This is effectively the basic revenues that a college operates from to see what patterns exist. And again, I'll go through each of the individual colleges individually. And then finally, we'll look at the endowment. And the number we look at here is what was the 2018-2019 total endowment at the end of a fiscal year. And I'll explain what that looks like when we get to that field. As we get started looking at these 6 Massachusetts private colleges, I want to start just by letting you compare the enrollment for the 6. And you can see on the screen that they're all more or less in the same size category. Suffolk University with about 7,000 to 8,000 students. Simmons in the 4,000 to 5,000 range, a little bit larger than the others, but they're all small to medium-sized colleges. What we can look at next though is the change over the 6 years, and we can see some have not done so well. Clark University and Suffolk right off the top. But the better indicator is to look at this percent change, and let me just click on the sort here. We can see that over the 6 years, Simmons has had 20% enrollment growth. Compared to the other colleges who have not been nearly as successful. Pretty flat enrollment for both Stonehill and La Salle University, and both Clark and Suffolk, and to a slightly lesser extent Fisher College, have had some enrollment declines. Not a good trend. Let's go back and look at the 6-year changes. And again, I've got these colleges sorted alphabetically. We'll just go through them college by college. And we can see Clark University, the enrollment is down. We've talked about that before. About 560 students, certainly not the trend any college wants. Interestingly, their 6-year tuition and fee change is up about $3.5 million. Now let's remember, this is over 6 years, and so that's about $500,000, half a million dollars per year. I'll come back to the graduation rate on another screen. But the big thing I want you to focus on is this change, relative change, in total expenses and total revenues over the 6 years. We can see that the expenses for Clark University have gone up a little over $14 million. The revenue has plummeted over $46 million. These core revenues go beyond just tuition. There are other sources of revenue. The take-home fact that you want from this is a $46 million decrease over 6 years is not the number that you want. Let's quickly take a look at the graduation rates. For Clark University, and again I'm going to look at the last year, 2018-2019, strong number. You know, at 79%, that means out of every 100 students who started at Clark in 2014, 79 of them graduated from Clark with an undergraduate degree in 6 years or less. And then let's look at the endowment for Clark University. And again, we're going to look at a number that's strong, not quite half a billion dollars in endowment. So Clark University has assets for sure. They're just not having the kind of operational success they probably want to have year in and year out. They're probably facing the same challenge that almost every other private college faces: enrolling students while maintaining a decent tuition rate for those students. Let's go back and take a look at Fisher College. The enrollment is down about 100 students. A little over, over the course of the 6 years. Not a positive trend, not catastrophic. Their tuition and fee revenue has gone down not quite $1 million. Not the trend that you want, not catastrophic in and of itself. The expenses have gone up $1.5 million. The revenue has gone down not quite $1 million. Not a good trend, but not a catastrophic trend. This is interesting. Let's go look at their endowment before we look at their graduation rates. The endowment for Fisher College was only reported in one year, in the fiscal year 2013-2014. So this is one of those cases when you look at the data and you realize something is missing. If you're considering Fisher College, ask them, why is their endowment— why are their endowment assets not being reported for the last 5 years? We'll look at their graduation rates. And this is for Fisher College. Here's a concerning number. When we looked a minute ago at Clark University, 79 out of every 100 undergraduate students who started at that college graduated. Less than half that number at Fisher College. And here's the point that I always make. Colleges' 6-year graduation rate represents their ability to put in place systems and processes to graduate students in a reasonable timeframe. Comparing these two, Clark University does a much, much better job than we see at Fisher College. Let's next look at LaSalle University. And again, as I glance at the numbers for LaSalle, it's a typically average place for the private colleges and the research that I do and have seen on these colleges. Their enrollment has effectively been flat over 6 years. Not a good thing, not necessarily a bad thing. It's down just a little bit. They have been able to grow tuition a little bit. Over $3 million over 6 years. So something to, to, that is positive. Look at the graduation rate separately. Their expenses have gone up $10 million. Their revenue has gone up a little over $3 million. It's going to be a concerning number, but as you will see with other private colleges, not as bad as others. But again, the challenge to balance expenses with revenues is an indicator of a college's capacity to provide not just an education, but a good education. If revenues can't keep up with expenses, that's an issue. Let's look at graduation rates for LaSalle. We can see that 59% of their students, of their undergraduate students, graduate within 6 years. 70% is kind of the number I like to look for. You'll certainly see colleges, as you see in this example, below that. But again, it's an indication of an organization's, of a college's capacity to graduate students. And we'll look at the endowment for La Salle. And at $43 million, again, if you've seen these videos before on other private colleges, the threshold I use, the threshold that many others use in higher education, is about $50 million. La Salle is a little bit below that. Endowments indicate a capacity to survive downturns, whether it's pandemic-induced or just general economic downturns, enrollment downturns. The larger the endowment, the more long-term stability you can make in comparison from one college to another. Let's take a look at Simmons University. So as we look at this set of 6 Massachusetts private colleges, clearly in my estimation, Simmons University is the strongest of the 6. You can see their enrollment growth over the 6 years, stronger than any of their competitors. They've done a good job managing tuition. And that means offering less of a discount for students. Not necessarily good for students, but certainly better for the college and its financial position. When we look at expenses, again, the same general pattern we see almost everywhere. $75 million, an increase in expenses. $48 million, an increase in revenue. A sign of a college moving forward. They just have to be concerned about being able to better manage these expenses with revenues as they move forward. Let's look at graduation rates for Simmons at 81%, strong, to be commended. And maybe one of the reasons one can logically expect that one of the reasons for their enrollment growth is they show the capacity to graduate students where some of their competitors do not. And then we'll look at their endowment, and the endowment for Simmons University at almost $200 million Even as you look at this whole set, this is a strong set of endowments across these colleges, these 6 colleges in Massachusetts. The only exception is Lasell. We'll look at the last 2 colleges in our set together, both Stonehill College and Suffolk University. And again, we can make the case just looking at enrollment that they're going in opposite directions. Suffolk clearly has challenges with enrollment over the last 6 years. That's a pattern, that's a trend. Stonehill College, I'm going to make the case this is flat enrollment. Growing 80 students over the course of 6 years is not bad, it's not necessarily the growth that these— the leadership in that college probably wants. Tuition revenue is up just a little bit at Stonehill and plummeting at Suffolk. We can probably make a little bit of a connection with the decreasing enrollment and the decrease in the tuition and fee revenue that the college collects. Let's look at the expenses, up $9 million and change for Stonehill, the revenue down about $1.5 million. Same trend we see everywhere. It's just a comparison. Which of these 6 colleges, if they were on your selection list, compares favorably from your perspective? You take into account the academics, the environment, the location, the tuition rates, the room and board, the amenities, and then we decide, then we look at the finances and say Do they have the resources needed to provide the education we want or I want? And we look at the case for Suffolk and expenses up $11 million, revenue down almost $23 million, just not a good pattern. Let's look at graduation rates for these two. And really on the other opposite end of the spectrum, the highest rate of all, Stonehill at 82%. The lowest, one of the lowest rates of all at 58% for Suffolk. Anytime you start dropping below 60%, you have to have concerns that by comparison, the capacity to graduate students with a college in the 50s and a 6-year graduation rate doesn't have the systems and processes like those in the 70s and 80s and 90s. And lastly, we'll look at the endowment for these two And we'll see that in 2018-19, both are strong, both in the vicinity of a quarter of a billion dollars. They have the capacity to survive downturns. But as we saw, if you're just looking at these two, Stonehill compares somewhat more favorably on a year-in and year-out basis than Suffolk's when we look at enrollment, which is the source of all revenue, and when we look at tuition and fees, when we look at the expense and revenue management, that's how we use this data. We use this data to make comparisons. There are no absolutes. Each of these 6 colleges may provide a strong education. The decision that you make is which one in your mind, based on the data that you see here, is the one that's financially most capable to continue to provide the education that you want for yourself, your children, your relative, or your community. These state-by-state comparisons in small groups of private colleges throughout the country. The focus is initially on the Midwest and Northeast, where the biggest challenges exist for private colleges. If you want to make sure you stay updated on these private college financial health and viability comparisons, make sure you click on the subscribe button down below. If you want to be alerted when those changes are posted, go ahead and click on the little bell button down below as well. If you have a specific college, or set of 2 or 3 or 4 colleges that you'd like me to compare for you, go ahead and put that in the comments section down below, and I'll put that on the list of video projects that I'll shoot in the coming days, weeks, and months. This is all about comparisons. You've done your comparisons on the subjective components of the college search. This is more about the capacity of the college to provide you support, your student support, as they make a decision about their higher education institution. These are valuable resources that are available to you not only through these video series, but you can get your own access to the College Viability App on the link posted in the comments and description sections below.