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Welcome to the podcast. We call it TWICV. It is our effort to provide a fast-paced, entertaining, and alternative voice to the propaganda and hype flowing out of colleges in America today.
This week in College Viability is a proud affilate of The EdUP Experience podcast network.
Gary D Stocker (00:01.76)
Welcome to a special episode of This Week in College Viability. Hi, everybody, Gary Stocker back. Doing something a little bit different today. We're talking with the CFO, the Chief Financial Officer of Albright College in Redding, Pennsylvania. Larry Bombach, thanks for making time to join us today.
Larry Bomback (00:18.712)
Thank you so much for having me, Gary. Appreciate it.
Gary D Stocker (00:21.356)
And Larry and I have chatted before and as those who follow me on a regular basis know, I talk a lot about colleges in trouble and colleges that are finding ways to get out of trouble. And that's kind of the focus of our discussion today. And Larry has graciously agreed to give me some time to chat with me and with you. And so Larry, let's jump right into it and let's look at both sides of Albright College financial situation. Share with the listeners the challenges and then what the college is doing about
those challenges.
Larry Bomback (00:52.726)
Absolutely. Look, I'm not going to sugarcoat it. I'm a CFO and I tell it like it is. If you Google Albright College, you will definitely see some bad press about the college. But if you look at the more recent information coming out of Albright in the press, you'll see that we're also in the middle of a pretty remarkable turnaround right now.
And I would say that the reason is because the folks at the institution now who are leading this organization really know the truth about turnarounds and how to do them successfully. Because the successful turnarounds, they all follow the same arc. First step is you really have to tear most of it down. The second is you got to stabilize the balance sheet. And your third is you have to rebuild stronger. So in other words, we tackle the expenses first. We look at equity.
second, and then we start looking at the top line revenue third. And right now I would say that Albright is done with phase one largely. Are there some additional expenses to cut? Yeah, probably a couple here and there, but nothing major like we did over the past year. We are really in the throes of what I would describe as phase two, stabilizing the balance sheet. And that has to deal with a lot of deleveraging.
and restructuring debt, selling some additional assets that we just don't need anymore, and really focusing on improving net assets. We are also simultaneously looking, obviously, at top line revenue now that we're starting to emerge from this second phase. And I'm pleased to report that we've had some really good revenue.
stories, over this past year. And I think they're going to continue, moving forward because at the end of the day, if your revenue is an exceeding your expenses, you're not going to be a viable entity. yeah, go ahead.
Gary D Stocker (02:53.292)
Yeah, yeah, yeah. So, that's fine, I'll edit this out. I don't want to cut you off, but one of the ways for me to know when you're done is just say my first name, then I'll know you're done with that statement.
Larry Bomback (03:06.786)
Got it. Okay. So let me continue a little bit because I haven't really talked about the full challenges and what we're doing to look at them. But I still do want to talk a little bit more about about turnarounds and how we're doing it at Albright because I think your listeners need to really hear it from the words and the mouth.
of someone who's in the throes of it currently. When we talk about that first phase, the expense-cutting phase, that phase one, that's painful. That's emotional. Jobs are lost. Programs are cut. They're curtailed. And a lot of promises that probably people in the past may have given to other folks at the institution, they can't all be kept. I like to think of phase one sort of like a bandage.
You can't see me on this podcast, but imagine someone with very hairy arms. I do have very hairy arms. you can, and I'm also O negative. So I have to give blood a lot because I'm O negative and because people need that blood. And you know, after, after, after the, the blood has been taken and the nurse puts the bandage on, I come home a couple hours later and the, and the blood is dried. I have two opportunities. I can either rip the bandage off really fast or I can take that big ouch all at once.
Or I could try to do like a slow peel and try to keep the pain a little bit less. And then, you know, hopefully I can have a slower, duller, longer pain situation. And the problem is when you've, the failed turnarounds, they do that second version. They kind of cut at the margins, you know, a little bit. And they try to go through that less painful,
Gary D Stocker (04:52.555)
Interesting.
Larry Bomback (05:01.688)
but much longer way of trying to deal with phase one and those expense cuts. what we've observed is that organizations that do that, that choice tends to breed stagnation. It tends to push your best people towards the exits because the best people are the ones who want to move fast and break things and get moving on solving the problems. And perhaps the part that's most overlooked is that
the longer you take to get out of that phase of expense cutting is the more time you're giving your critics to organize. So I always say, rip it off. There's also, you there's really also like, you can think of turnarounds in terms of a science and an art. I think, Gary, the work that you do around financial diagnostics for colleges really is the science and it's absolutely indispensable for seeing the problems clearly.
that face our sector. But what an organization does with that science is what I would describe as the art, right? That's how leaders, they sequence their decisions, they communicate the trade-offs, they communicate the change, and they mobilize their teams, their staff and their faculty and their boards to execute. And the biggest trap probably that boards would fall into when they can't
Gary D Stocker (06:05.995)
All
Larry Bomback (06:28.206)
when they can't successfully turn around is that they're relying on the same team that dug the organization into the hole as somehow the same team that's going to get the organization out of it. And I think the Albright Board did such a great job recognizing that they needed to bring in new leadership, both on the staff side and in the board itself. They recognized the depth of the hole.
And they acted decisively. They brought in a really great interim president. Her name is Deborah Townsley. She's led four prior turnarounds and Albright, it's stabilized now, but certainly not out of the woods is her fifth, is her fifth turnaround. And her first move was assembling that right senior team. She brought me on, she brought another wonderful VP of administration on named James Gaddy and, and, and
and a wonderful VP of enrollment, Justin Roy. And then she empowered that team to come in and make those necessary changes. That's really the art. know, Jim Collins from good to great always talks about getting the right people on the bus, getting the wrong people off the bus, making sure everyone's in the right seats. And Deborah, you know, knows that from all of her experience turning around schools. So let's, let's, so now that we kind of have that like preamble, I think we should talk about
Gary D Stocker (07:42.998)
Right.
Larry Bomback (07:54.415)
what the challenges were that Albright was in, that they were in such a deep hole. So if you've Googled Albright and you've seen some of the news, Albright in 23 and 24, fiscal year 23 and 24, lost almost $50 million. And that's a staggering amount of money for a small private school.
Gary D Stocker (07:59.083)
Okay.
Gary D Stocker (08:14.965)
Yeah.
Larry Bomback (08:22.824)
And so how did that happen? People keep asking, like, how did that happen? How did that happen? And the fact is that Albright lost a quarter of its full-time undergrads after COVID. And it never right-sized to that new reality. I'm never going to second-guess the previous administration. Nobody knew what was going on when COVID happened in the beginning. And if I had to venture a guess, I probably would say that these folks thought that COVID was going to be a short-term blip.
and that we would get back to where we were pre-COVID and there wasn't much right sizing that was necessary. The other weird thing about the right sizing is that in terms of getting some of that government largesse that was available during COVID times, schools were disincentivized to right size because
Gary D Stocker (09:12.778)
Yeah,
Larry Bomback (09:14.478)
because you were given money in the form of PPP and the ERTC, the Employer Retention Tax Credit, to retain your employees when you actually didn't have enough work for them all to do. And I think when we look back at COVID 20, 30 years from now, we're gonna see that that lack of sort of foresight in terms of
Why are we trying to keep so many people employed right now when there isn't enough work for them to do? While noble, it's obviously a noble thing for the government to want to say that, it probably had an accelerating effect on what's now happening in higher ed because there weren't the mass layoffs that should have normally accompanied a catastrophic situation like that.
Gary D Stocker (09:46.22)
Hmm.
Larry Bomback (10:11.67)
I know that's like, whoa, that's like a really crazy thing to sort of say, I, and it's easy to say that now in hindsight, but COVID was a very strange time for all industries, but particularly those that went from being fully in person to fully remote, like schools, like arts organizations. And they were disincentivized to keep
They were disincentivized to lose staff. were told, you will get a lot of money if you keep your staff. But that money, of course, disappeared after COVID. So that's a, you and I think Albright was not immune to that issue. So when we came in about a year ago, this new leadership team, we had to actually overcorrect, I would say, for the years of delay.
Gary D Stocker (10:49.993)
haha
Larry Bomback (11:09.378)
And I'd rather overcorrect during phase one, to sort of rip it off, then again, try to do that slower burn and undercorrect and then maybe have to do another big rip off later. So we intentionally overcorrected, but that's allowed us to help stabilize this college and really allowed us to look at the balance sheet more holistically to figure out ways to effectively de-leverage it.
We at Albright, now that we're starting to focus more on the top line and on revenue growth, like any business that's in a very competitive market and higher ed, especially small privates is potentially as competitive as it gets. It's all about differentiation. And for us, that differentiation is around price point.
We like to say that we offer a private school education at a public school price. And that's a big part of our value proposition. And we also have good data to back up our claim that we have a clear path to outcomes. Our school is ranked number 31 among all national liberal arts colleges, and there's 1,500 of those, and we're number 31 in terms of social mobility. So that means when you come to Albright,
You're not getting socked with a ton of debt. And when you leave, you're getting a good job. And at the end of the day, that's why someone wants to go to college because there's still a lot of data out there that says a college degree is worth it. Yeah, so.
Gary D Stocker (12:48.908)
Yeah. So, one of the things that you and I talked about previously, and I've seen in some of the news reporting is your projections for recovery are really based on internal budget documents. And as you and I both know, audited financial statements are really the preferred source to document organizational improvement or lack of improvement. How do you equate your internal budget documents and what they're showing you with what that next audited financial statement will look like for Albright College?
Larry Bomback (13:19.586)
For sure. So we're in the throes of the fiscal year 25 audit that is definitely going to show the results of this turnaround very clearly. I think I'll have a draft in the next couple of weeks. I need to have it by the end of November at the latest because that's a requirement for our accreditation. But field work is largely complete, so I think we'll have it in the next couple of weeks, a good draft. when we talk about the
When we talk about the internals versus the audit, I'm very clear with everyone that I speak to is that I actually do keep two sets of books. I keep two sets of books and I like to look at them in terms of these two lenses because I think you need the entire story. The audit story is the first set of books and I would describe that as the total change in net assets. It's the all-in P &L.
It really includes all the operating results of an organization plus the many, many non-operating items that happen, whether it's your investment gains or losses and your asset sales or asset purchases, which are going to show up on your cash flow statement and on your balance sheet. that total change in net assets is very important look.
For us, that roughly $50 million that I talked about in terms of a loss, that was that total all-in loss that you see on those audited financial statements. I'm really excited to say that in the fiscal year 25 audit that we'll get back in a couple of weeks, we are going to show a large positive total change in that assets for the first time in about five years. And this is driven, to be fair,
in large part by approximately $14 million of asset sales that we used to stabilize and get us through phase two. Those asset sales were sales of buildings and of land that we were no longer utilizing or that they were just super far away from the campus. One of the things we sold was a property in Costa Rica that we were trying to run as an Airbnb for some reason.
Gary D Stocker (15:44.638)
my.
Larry Bomback (15:45.811)
and wasn't making any money. So we were very happy to sell it and not have this loss leader anymore. that's what I mean by getting rid of assets that we don't utilize. The other set of books, which I think is actually the more important one, is that true operating performance. What you might call the run rate, P &L.
And that really is the, are you bringing in more revenue, more recurring revenue than you are spending on a recurring basis every year. In the corporate world, you know, the term EBITDA, earnings before interest taxes, depreciation and amortization, that's usually a good proxy for what in the corporate world they refer to as operating performance. And we're going to be a
attacking that operating gap in two steps. At the end of fiscal year 25, we had closed our gap to really only around $3 to $4 million. And before it had been well over $10 million. So we've done a really good job closing that EBITDA gap. But obviously, we still have some room to go there. As I said, we have about $3 to $4 million to close.
in order to get enough cash in the door to cover our non-cash expenses. And that's step one from an operating performance standpoint. Step two though is we have to fully fund depreciation because ultimately that's the goal. I think as you've noted so much in your analysis, Gary, organizations really can get themselves into trouble when they have big deferred maintenance issues because we're not only competing now in terms of the programs that we have.
Gary D Stocker (17:28.0)
Yep.
Gary D Stocker (17:35.297)
Yeah.
Larry Bomback (17:42.265)
but that student experience and when they come on campus is their dorm modern, is the landscaping beautiful, are there nice amenities around the campus. It's a competitive market to bring students in and first impressions matter tremendously when folks are going on tour. So that's gonna happen. That being able to fully fund appreciation is gonna have to be something that that's gonna be step two. Our goal.
This year, fiscal year 26, is to close that EBITDA gap to get that right to zero. And then by 2030, the intention based on our projections is that we'll have fully funded depreciation and still be spinning off additional revenue to go to retained earnings.
Gary D Stocker (18:33.836)
So, Larry, let's step back and look at the big picture. Look at the big Pennsylvania higher education, the big Pennsylvania college market. And by my count, there are 87 private four-year nonprofit colleges and 37 public four-year colleges, give or take. So 120 some odd public and private colleges. Albright and many others, not just Albright, each have only a small fraction, of that total enrollment in Pennsylvania. How, speak to the broader picture. How can your college
and those like yours hope to compete in a market, something I talk about all the time, in a market with too many colleges and not enough students willing to pay even heavily discounted tuition to go to those colleges.
Larry Bomback (19:15.746)
Yeah, I agree with you entirely. I think we do have too many colleges and to a certain extent there's there's there is a little bit of a survival of the fittest situation going on here and I'm in this country and I'm not sure it's it's any more acute than it is in Pennsylvania to your point, which has so many colleges. I think it's also why we have a lot of smart people in the state. But it is a but it is a wonderful but it really is a wonderful academic
Gary D Stocker (19:39.062)
haha
Larry Bomback (19:44.961)
state from that perspective because there are so many institutions of higher education. That said, we've seen a lot of them fail or be merged or be acquired by another institution over the past couple of years and there's probably going to be a lot more shaking out of the sector going forward. But I don't think at all that Albright's going to be part of that and I'll tell you why. So look, we don't believe in headcount nostalgia.
where you kind of talk to folks who went to Albright years ago and they're like, we used to have 2000 students at this place. And the fact of the matter is, is we actually don't need 2000 students to be a viable college anymore. And that's because we've actually gotten the cost structure down to a very manageable place. We're competing on the right fit and we're competing on the outcomes. We're not competing on headcount nostalgia. you know, to what does that mean in terms of real numbers? That the targets that we're going to, get to that,
Gary D Stocker (20:18.726)
Hahaha
Larry Bomback (20:43.086)
To get to that EBITDA closure that was describing to you, that sustainable EBITDA basis, we need to get to 1,250 full-time undergrads. We're a little less than 100 away from that right now based on this fall incoming class. So we're not that far away from closing that gap. And to get to depreciation being comfortably covered, we need to be at about 1,400 full-time undergrads.
Gary D Stocker (20:46.284)
All right.
Larry Bomback (21:11.406)
So that once we get above 1400, we're not only fully funding depreciation, but we are also then spinning off that necessary accretive net income that ultimately improves our equity in a very meaningful way. that's really the first part of that, I answer your question. It's like, we don't have unrealistic goals. Getting to 1250 from a little over 1150 right now is not,
is not a crazy goal, especially when this year we had 484 new full-time undergrads versus 375 a year ago. That's the evidence of the execution of our strategies here. And that was only on a half year of recruitment because when we got here about a year ago, there was so much uncertainty about whether the college
was even going to survive, we didn't do significant recruitment at all in the fall. We didn't even have a director of admissions in the fall. So we didn't start the recruitment drive until the spring. And the fact that we were able to get over 100 more first years and transfers, an incoming class that's 100 more than it was a year ago is
is quite exceptional on only half a year of recruitment and missing the really great months to do your recruiting in the fall. And I'm happy to talk about maybe later in this podcast about what we did in the spring to get to those numbers. I think it's important for folks to hear how we did that, because it's a model that other schools can and should emulate and maybe we could talk about a little bit later.
Gary D Stocker (22:44.64)
Right, right.
Gary D Stocker (23:06.214)
Yeah, and I do have that on my list of questions. And before I get that, we'll make that two questions And I'm going to talk dirty for a second. I want to talk CFO kind of talk, inside baseball kind of talk. And there's something called a CAPEX, capital expense to depreciation ratio. It's a standard measure to see if an organization, college or whatever, is investing enough in its infrastructure. And I know in some of the work that I've done that at Albright, I know this predates you,
Larry Bomback (23:07.564)
Yeah.
Gary D Stocker (23:35.66)
at Albright that the number that should be 1.0 or higher, that's standard acceptance, has been below that threshold for eight of the nine years. I guess my question, Larry, is how do you make up for that seven, eight, nine year deficit spending on infrastructure while recovering a college from a tough, tough, tough financial position?
Larry Bomback (23:42.082)
Yes.
Larry Bomback (23:58.383)
Yeah. So one thing I do have to say about that particular ratio, and I don't really want to get into the wonky accounting of this, as it relates to all... I will, but there's... As it relates to Albright, it's actually not as bad as it looks. It is bad. Let me be clear in that. I told you I'm a straight shooter. But it's not as bad as it looks, and that's because we actually lease two of our dorms, but these aren't traditional leases. These are capital leases rather than operating leases.
Gary D Stocker (24:07.116)
Come on Larry
Gary D Stocker (24:19.308)
This is not...
Larry Bomback (24:27.598)
That means we have an equity stake in these dorms and we receive distributions from that equity stake in the dorms and those are returned to the endowment in lieu of a private equity asset allocation. So I told you like that may be two in the week, it's for a general listener, but that accounting gobbledygook addresses some of that issue, but it does not address the whole issue because you are a high.
Gary D Stocker (24:51.649)
But it is a good point that others could model after,
Larry Bomback (24:55.384)
Correct. mean, certainly folks can model after that, and I'm happy to speak to folks about that. It's actually not a great model if you're in a state that taxes nonprofits for holding real estate. Sorry, it's only a good practice if you are in a state where you get taxed for real estate. And in fact, in the case of Albright, Albright is in a state where
Gary D Stocker (25:10.678)
OK.
Larry Bomback (25:25.3)
nonprofits are tax exempt from real estate taxes. So we actually do want to get out of this lease eventually so that we can lose the real estate tax burden that being an owner of this effectively for-profit enterprise creates for us. We want to be able to own it outright as a nonprofit and not as an investor in an LLC. So as I said, this is like maybe way too much accounting gobbledygook.
Gary D Stocker (25:55.244)
Haha
Larry Bomback (25:55.311)
But to your point, that in and of itself does not address your issue 100%. As I mentioned earlier, I'm fully aware that we are not going to bring in enough net income probably until about 2030 to fully fund our depreciation. And to get to 1,400 full-time undergrads is still a few years away.
But I do want to be clear, our depreciation today is significantly lower than it was a year ago because we sold a lot of this real estate that I was telling you about that we weren't using. So our depreciation will come down. That's good thing as it relates to this ratio. But in addition, we don't build anything anymore that we can't finance. And this was an issue for the school in the past, as it was for a lot of schools, what they call the edifice complex, right? Where you build it and they will come.
Gary D Stocker (26:42.443)
I wanna know.
Gary D Stocker (26:47.564)
Yeah
Larry Bomback (26:49.068)
and they will come. And we don't do that anymore. And I can give you a great example of it, because we're in the middle of one of these right now. So we have half the funding available to build a really great outdoor track and field with a turf and restrooms and bleachers and lights and all this sort of stuff. And the athletic director and some of the donors who've come forward with half of this funding are really itching to get this thing up and running.
ASAP. And that's because of past promises that they were told that this thing would be available right now. And we've told everybody this is not happening until we have the rest funded. So we're sitting on those commitments. And we're not going to move forward with this, even though this new track could bring in another 80 to 100 new students who want to participate in an outdoor track and field, which is something we don't have yet. And that could be
But because the thing is, when we get those 80 to 100 new students, we want that to be fully accretive on an operating basis. We don't want those students to be reimbursing capex for several years. So we're not moving projects forward without that life cycle funding identified. if that means that we just do the track first, just so we can get a program up and running, because we have enough money to just do the track.
Gary D Stocker (28:00.075)
Nice.
Larry Bomback (28:10.936)
but we won't do the field, like we won't do the turf field, we won't do the bathrooms, we won't do the bleachers, we won't do the lights, and we can do that more incrementally. And the argument that I hear from some folks when I tell them that is they're like, no, but you're losing all the economies of scale if you do everything at the same time. And I said, look, that's sometime in the future that I don't know, and I'd rather pay today's rates with today's dollars, so it's probably a wash.
Gary D Stocker (28:33.206)
This
Right, right, right. And I want to get back to sports in minute. Matter of fact, that would be my last question. But I promised getting back to the growth and the operating revenue growth that comes from students, students who pay tuition. And a couple of stats. Again, I'm a data nerd. If this were a video podcast, you could look closely at my forehead, Larry. You would say video and data nerd across my forehead. So at Albright since 2020, since the pandemic, retention is down 10 points. I'm going to qualify that. And admission yield at Albright was down eight.
Larry Bomback (28:50.37)
Totally.
Larry Bomback (28:56.311)
You
Gary D Stocker (29:05.417)
Now, in both cases, that's not unique to Albright, especially the admissions yield is down in almost every college in the country. But that does provide a baseline from which your college and many others needs to grow from. How are you going to do that? Again, back in the context, Larry, of that question we had before, there's way too many colleges and not enough students willing to pay any kind of tuition to go there.
Larry Bomback (29:27.758)
Yeah, so this really gets at the new enrollment strategy that we introduced in the spring of this year. And that, I'm very pleased to say, brought us to a 13 % yield. So not a spectacular number, of course. We want to be 8%. So 5 percentage points, I think, is meaningful. And that's going to continue to creep up. And here's how we flipped the enrollment model.
on its head this past year and how we're going to continue to do it going forward. So in the past Albright did the big cast the net strategy where you just advertise and recruit to as many possible people as you can and you hope that in that funnel enough trickles down so that the math works. You get your 400 or 500 students because you have 10,000 or 12,000 applications and you just hope that it works.
And I think for a long time, in the 80s and 90s in particular, that strategy worked for Albright. And it's a strategy certainly that works for any school that has a very low acceptance rate and a high yield. You can do that cast and net strategy. It's much cheaper to do. And you can have the math work that way. But in a situation like Albright where we had a higher acceptance rate and a lower yield,
We really need to look at what I would describe as a target market strategy, where we find using our data, who are the students most likely to not just apply to Albright, but actually come to Albright, and most importantly, stay at Albright. And so we looked through all of our data to find that ideal student. The student who applies decides to come and then
decide and actually graduates. Those three are really key. found what that profile looked like demographically, psychographically, socioeconomically, and we spent a lot of money buying data for folks who met that exact criteria. And in today's world, everyone's data is out there. And if you've got specific criteria that you want, you can pay money to get those qualified leads.
Larry Bomback (31:53.795)
And that's what we wanted. And that's who we marketed to and who we advertised to and who we aggressively recruited. We're target market students. So what that meant for us is that our application, our total application numbers actually went down a lot, but that was all by design because our acceptance rate went down as we had a more competitive pool and our yield went way up. So that's the strategy. And I hope anyone listening to this.
Gary D Stocker (32:19.072)
Right.
Larry Bomback (32:23.47)
who has that headcount nostalgia, listens to this really carefully because this is how you do it. You need to get out of the cast the net strategy. You need to basically flip the model on its head. And instead of focusing on the top of the funnel and trying to get lots and lots and lots of names in the top of the funnel, focus on the bottom of the funnel. Those who are most likely to come to your college and then recruit the hell out of those people so that they actually land into your bucket.
Gary D Stocker (32:26.988)
Ha
Gary D Stocker (32:51.052)
Yeah.
Larry Bomback (32:52.014)
So that's on the yield side. Now on the retention side, this is the thing that keeps me up at night. I believe if there's anything that's going to really put a damper in all the optimism that I've been talking about on this podcast, it's retention. This is our biggest risk hands down as an institution. We're in the low 60s right now, which is below the peer average for us. We want to get
Gary D Stocker (32:56.33)
Hahaha
Larry Bomback (33:19.438)
back to the high 60s and ideally into the low 70s. Obviously we want to be much higher than that, but we recognize the reality of the situation. So at least in the short term, our focus is to get us back into the high 60s and then in the medium term to get into the low 70s. So the way we're attacking this now is we actually purchased an AI platform called Edsites. It's a relatively new AI platform that effectively acts as a
as one of these AI agent chat bots that students can contact anytime they want, 24 hours a day, just to talk, just like many of them are doing right now with ChatGPT or with any of the programs where you can simply have a conversation and ask questions of that data model. But the EdSites AI is obviously a closed system that
has a ton of information about Albright. And we populate that information so students can ask questions all the time. And what happens with this is that there are, if a student communicates to the EdSites app that let's say they may be feeling a little overwhelmed because they can't get past this particular issue in their class that they're taking and they're concerned about.
their grades and being able to do all the homework, that student's assigned student success coach gets an alert when one of those kind of triggers happens. It's not like we're reading their emails, just to be clear. We're not doing anything like that. But so there's no privacy intrusion there. But if the AI says, hmm, this student sounds like they're struggling, that student's success coach gets an early intervention ping. So the student success coach can proactively reach out to that student.
you know, find those risk signals earlier and then try to address those before they become much, much, much bigger problems. And obviously this goes beyond just academics, but also in terms of mental health, because it's not just academics why students decide to leave. Mental health is the other big thing. And again, it's all the actual conversations themselves are completely confidential, but the triggers that would
Gary D Stocker (35:28.118)
Right.
Larry Bomback (35:43.095)
that ping a student success coach say, hey, you should probably start having a conversation with so and so to learn about X, Y, or Z. And that's what we're hoping to address retention. Because as you know, it costs hell of a lot more to recruit a new student than to retain one. So we'd much rather retain our students and take a little bit of that pressure off admissions.
Gary D Stocker (35:58.507)
Yes and no.
Gary D Stocker (36:05.068)
Well, let's wrap up with the last question. And my favorite topic in all topics is sports. And you and I spoke about this before. And one of the things you shared previously, I mean, even a bit ago, a minute ago about the track field, Albright's going to invest in sports as one of its mechanisms to grow enrollment. And there are certainly opportunities with that. But as you mentioned before, there are challenges as well. Can you address both of those, Larry?
Larry Bomback (36:35.2)
yeah, certainly. So when you speak to Albright alums, doesn't matter what decade they came from. The ones who are the most successful, the ones who have turned into the greatest champions of Albright, the greatest donors of Albright, they were, like athletics was a part of their college experience. That seems to be a through line just throughout the history of Albright. So sports is really important at the school. And this is strange, right? Cause this is a D3 school. This isn't like, know, Duke.
or Stanford or University of Michigan, where of course sports is gonna be there forever. This is a small liberal arts D3 college, and yet sports is so important to the alums and it's so important to the students who come here. I think part of it is maybe because of the location of Albright in Reading, Pennsylvania. This isn't a big city with tons of entertainment options within walking distance of.
of the school. does not look like a traditional college town, let's say. So sports take up a lot of that time. And the way we deal with sports at Albright, especially when we're introducing something new or bringing a sport back, is we actually announce the sport two years ahead of time. So then any needed facilities are going to be funded by philanthropy or by our savings, if we've been able to generate those savings. If we can't do it,
Well, all we did was announce it and we say, unfortunately, we weren't able to do it. One year out, assuming the facility is in place that we need, one year out, we hire that coach and we give that coach their break-even recruitment number target before we even launch the program. So their whole job during that fall is to find those students. And if that coach can field the break-even team, awesome. The sport is in place and then we're all good.
If they can't, again, we just don't do the sport. So far, we have introduced, just this year, we introduced men's wrestling. We hired the wrestling coach. He only needed nine students to break even. He brought in over 20. So he really knocked it out of the park. Next year, we'll introduce women's wrestling and women's flag football. So those coaches are identified. They're already out recruiting folks.
Larry Bomback (39:01.134)
to field those teams so that those teams can start in academic year 26, 27. And then we also introduced this year a new sport called stunt, which is sort of described as cheerleading on steroids. They don't cheerlead at the games. mean, these are stunt competitions, like stuff you might see at America's Got Talent. It's pretty wild stuff, but it's becoming a more popular sport at the high school level.
Gary D Stocker (39:23.948)
You
Larry Bomback (39:29.228)
And one thing I really love about our athletic director is he's always got his ear to the ground. What are these new emerging sports nationally and locally that kids in high school are starting to play and get really excited about? And let's see if there's a there there for us. And that's how these sports get surfaced. None of us had heard about stunt except for the athletic coach. And there's so few schools that have stunt. And now we're one of those few schools that has a team.
particular sport gets more and more more popular at the high school level, we're going to have an established team ready to go. So, you know, that's how we look at it. Hockey is a great example, too. So we want to introduce hockey next year. Obviously, we need a facility. That's important. Assuming we can get the facility, hockey has had just this gigantic renaissance in this part of Pennsylvania that we're in. I don't really know what's
Gary D Stocker (40:15.018)
Right.
Larry Bomback (40:25.262)
What's the trigger for it? I think there's been a lot of investment by the Philadelphia Flyers and the owners of that organization to get more kids into hockey at a young age. There's a lot of scholarships and stuff like that. But hockey is just super, super popular in this part of Pennsylvania. So we really want to launch a hockey team because we want to capitalize on that. if somebody's coming, because when we get to that bottom of the funnel, as I was talking about earlier, differentiation is what's going to get you into our school.
our differentiation. let's say somebody wants to major in cyber criminology and they want to play hockey. Well, Albright has those two a year from now, hopefully, and there's not going to be a lot of schools that have cyber criminology and hockey. So what could have been 87 schools in Pennsylvania might get down to two. And that's why differentiation is so important and why sports
is a big part of that differentiation because it's harder to differentiate on the majors side, much harder to differentiate on the academic side. Sports, we can absolutely differentiate on because we've, and that's why it's a big part of what we have going.
Gary D Stocker (41:33.504)
Well, Larry, you have been more than gracious with your time. I am grateful. And again, Larry Bombach has been my special guest today. He's the interim CFO at Albright College in Reading, Pennsylvania. Larry, I wish you and your organization the very best. And again, thanks for making time to join me.
Larry Bomback (41:48.896)
Thank you so much. Appreciate it, Gary.