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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 Stocker (00:00.842)
It is Monday, October fifth, twenty twenty-six. Hi everybody, Gary Stalker in front of the Blue Yeti Microphone yet again with another podcast episode of this week in college viability news and commentary. And of course, this is the podcast, this is the show that talks about the financial health and viability of public and private colleges with data and with details and with perspectives offered nowhere else ever.
And this week, where are we going? Well, we're going to start with the University of Utah. They are announcing a modernization effort. Get the tap shoes on. They may lay off hundreds of staff, hundreds of staff, after input from two, not one, but two national consulting agencies. I'll have more on that. If you're a North Carolina high school senior, the state is offering you a free credit card. Excuse me, the state is offering you sarcasm.
The state is offering you a free, and not free, the state is offering you a higher education slot. This is the direct admissions program that we've talked about so many times. And endowments are financial pillars, not piggy banks. I made a mistake. I used the piggy bank analogy with endowments many times over the last couple of years, and it turns out I wasn't the first one. I'm gonna give credit where credit is due, and we'll talk about endowments as piggy banks.
And then finally we're gonna wrap up with a rather extensive discussion of one bad merger doth not, one bad merger does not a trend make. And of course, products available, the college liability inspection report and the my college decision lens to help students and families make the best informed college decision based on financial health, value, investments, and outcomes. Nobody else does it the way we do with the way we do it, and it's available
Free for the time being. It's available free at My College Viability. One long word, mycollegeViability.com. And we start off where we always start off, layoffs and cutbacks. And they're starting up again. Bowie State University to lay off 20 faculty members. The Journal of Black Higher Ed had the story on October second. In the spring, this past spring, Bowie State cut 79 positions.
Gary Stocker (02:22.444)
In an effort to alleviate the high the HBCU's $18 million deficit. This was for fiscal 2027. Now the university plans to cut 20 more faculty positions before the start of fiscal 2028. This is according to a report from the Baltimore Banner. A spokesperson for Bowie State said that they are doing this to reorganize several academic departments. The affected faculty have been given a one-year notice and will continue to teach.
Throughout the current academic year. Now there's more to the story, as the late great Paul Harvey would say. During the fall semester of last year, 2025, billionaire philanthropist Mackenzie Scott donated 50, that's five zero million dollars to Bowie State. The gift was unrestricted, enabling the college's administrators to direct the funds at their discretion.
Mackenzie Scott had also given the college twenty five million dollars in twenty twenty twenty twenty and it was also unrestricted.
Gary Stocker (03:31.897)
But in fiscal year 2026, where we are right now, Bowie State faced a $13.6 million shortfall, which grew to $18 million as they look ahead to fiscal 2027. And according to a recent letter to the campus from President Amita, Amita Bro, the college's structural deficit and significant financial pressures are expend are expected to extend into fiscal year 2028. So let me get out.
My fingers and toes, my counting fingers and toes. Fifty million plus twenty-five million is seventy-five million dollars in unrestricted funds. Call it cash. They're synonymous. Now Bowie State, any college, can do anything they want with unrestricted gifts from anyone. Doesn't matter whether it's McKinney McKenzie Scott or anybody else. But but but of course, that's a lot of money.
And it really begs the question that I have not seen addressed: where did all of that money go? I'll be looking forward to follow-up stories on this one in the coming weeks. Page two: the University of Utah announces a modernization effort. You just gotta love these guys. A modernization effort and may lay off hundreds of staff after input from two, not one, but two national consulting agencies. The subheading reads.
This modernization could lay off between 285 and 855. Do the math on that. I don't have fing enough fingers and toes. Between 285 and 855 staff positions, doesn't say faculty, after the contract with McKinsey and Huron, two consulting organizations, were hired to help prepare the university for the future. Luca Gorg Luca de Gregorio.
Had the story on October 3rd in the Daily Utah Chronicle. So that's about 15% of their 5,700 staff members, no reference to faculty here. And what that will look like for the staff affected remains to be seen. And again, the modernization is about effectiveness and efficiency. Why are they waiting until now? I know why, because they're running out of money and the expenses are going up. And the U, the University of Utah.
Gary Stocker (05:55.927)
It's coming from the s the reported story, says it is undergoing this process from a position of strength.
Gary Stocker (06:05.772)
A position of strength to get ahead of some of the financial pressures they see on the horizon. I'll talk about that in a second. These pressures include decreases in federal funding and budget reallocations from the state of Utah legislature. So, all right, this appears, appears to be a story released way too early. That's a big spread. That's 500 some months. Is that right? 500 is the gap from 285.
to five to eight fifty five, not quite six hundred. Not quite six hundred students.
That's big number, and that's why I think this was released way too early. They're trying to get ahead of the game. I can understand that. It's reasonable to think they're just trying to get ahead of the game, trying to get ahead of where higher education is headed, decreasing revenue and increasing expenses. And it's it's possible that both their revenue and expense forecasts are dire. They don't share that in the story. And it's easy for consulting firms, not just one, but two.
To be the bad guy to cut positions. And again, this is just faculty, is what it appears to be right now. It's a big number though. And and and I haven't talked about this for a while, but I'm guessing I will in the coming weeks and months. As this story moves forward, expect the typical faculty and student protests. They're gonna happen. I haven't seen the stories yet, but this just this just came out. I just hope that the president has a lot of s office space for the protesters to sit in.
Again, my apologies, sarcasm alert, I missed I missed that. I missed that. Because of course, students tend to want to populate the president's office when they protate, when they protest. So onward that we go, page three. Alverno college in Wisconsin. Shores up rebound after major recruitment restructuring.
Gary Stocker (08:05.43)
I need to create a song called Spin Spin Spin. Logan Hansen had the story for the Milwaukee Business Journal on October second. Here's what Mr. Hansen, I presume, Logan Hansen reported. Just over two years ago, Alverno College was in a precarious position. I can confirm that. In June of 2024, the private women's college on Milwaukee's South Side announced it was eliminating twenty programs, cutting twenty five full-time faculty and twelve full-time staff positions, and discontinuing a track and field athletic program.
The story goes on. Today Alverno leadership says it is in much has a much rosier outlook for the college's future after making key hirings and adjusting its recruitment and retention strategy. All right. So, first of all, you've heard me talk about a lot about regurgitation reporting. This is not. Repeat, this is not regurgitation reporting. Mr. Hansen or Logan Hansen did some good research and he put it in the article.
But I want to help out because you know me, I'm a data nerd. The at Alvarno College, the data from 2021 through 2025. The unrestricted net assets are down from 32 million, are down $32 million from $52 million to 30 million. That's down 42%. The total adjusted net income losses from 2021 through 2025 were a total of $25 million.
Enrollment is down 500 plus students. Student and fee revenue is down from 30 million to 20 million. That's a 33% drop. And Alverno is investing next to nothing in capital expenses and in maintenance. And finally, while most college endowments have grown substantially, Alverno's has decreased. Most have gone up like 55% over the last five or six years. Theirs has decreased about $3 million. Now
Here's Alverno's announced fixes, and nice they had that in the story. They're making key hirings, I'm quoting here, making key hirings and adjusting its recruitment and retention strategy. Key hirings, recruitment and retention. And re This is silly. Retention is the only variable that maybe can be managed mostly by the college. Key hirings are problematic for a lot of reasons. You just can't pin your hopes on a hiring.
Gary Stocker (10:34.38)
You never know. And adjusting recruitment strategies, as I've said so many times before, adjusting recruitment strategies in a declining market is equally problematic. Let's go to North Carolina. And if you're a high school senior there, you're going to college. Well, all right, not necessarily the case. David Bass had the story in the Carolina Journal on September 22nd. And here's what David Bass wrote.
Every North Carolina public school senior, I didn't miss that nuance, public school senior on track to graduate this year, has been offered admission to at least one in state higher education institution. The offers went to one hundred and five thousand and change students through the North Carolina College Connect, a program now in its third year that admits seniors based on their academic record at the start of twelfth grade. So I guess
I guess things can go to hell in 12th grade. Students do not need to submit an application, an essay, a test score, or recommendation letter to qualify. Let's make this friction-free and probably quality-free. 64% of those seniors, 67,000, were admitted to at least 30, were admitted to at least 30, I presume different four-year colleges, along with their local community college. Students with the strongest records.
We'll see as many as forty-one schools, colleges on their letters. The other thirty-seven thousand students, more than one in three, were admitted to their local community college. I'm guessing their grades and academic performance not so hot. Now I I've I've talked about this direct admit a lot in the last many weeks. And I I've been thinking about direct admissions a lot. And and I've got a new theory.
Is is this some kind of higher education draft process, kind of equivalent to a military draft? Everybody gets the draft number, everybody gets a letter of admissions. And I understand that the student has no obligation to accept the admissions offer, unlike the military, when they had drafts. And and and I know it is an element of desperation. These directed myth programs are element of desperation for private colleges for sure.
Gary Stocker (13:01.28)
Not as much for publics, although the folks in North Carolina are making me think about that a little bit. But are are are we moving toward a scenario where going to college is almost mandated by public officials? It's something to think about. I I don't even believe it as I say it, but I I've been thinking this through and I wanted to get that out there for consideration. So is is this part of a last college standing approach?
I I sense that many colleges are are are doing desperate things, including direct admissions and tuition discounts and tuition resets, just to find a way to stay alive in the hopes, I'm guessing, of others of other colleges closing before them.
Colleges beg students to attend with direct admissions and in many cases low to non existent tuition pricing.
And they're hoping that they can get enough students to survive in a plunging market. Now, I'm I know I'm stretching the logic of direct admissions a little bit, but it's exploding in our faces as we speak. It's it's really hitting us right now, and we're gonna see more and more and more of these announcements. And I I have to wonder why. I think I know why, because that's what I spend a lot of my time thinking on. LinkedIn post.
Emily Weisgrau had a post on October 1st on LinkedIn. I'll put the link in the show notes. And she writes, yesterday, the Chronicle of Higher Education, they have an email newsletter, featured a story from its archives. From its archives. This was about 10 or 11 years ago. And it was entitled, the article that she posted in her LinkedIn post last week was entitled, Endowments Are Financial Pillars, not Piggy Banks.
Gary Stocker (14:59.978)
It was written 11 years ago by David Oxtaby, who was then the president of Pomona College at that time. First, my apologies to Mr. Oxtaby. I have been using the Piggy Bank analogy in the context of endowments. And it is clear now that he used it first. I have put a note in my system that from this point forward to give him credit when I use that reference, not piggy banks.
in the future, because he he came up with the first. So Mr. Oxtaby, if you don't want me to use your name, that's fine. Drop me a note and I'll be glad to not do that. But you did it first. You deserve credit because that's what's happening. And we've seen stories in the Wall Street Journal. We've seen them, I in Forbes even, where colleges are not just using their unrestricted endowment funds, which is effectively cash. When they run out of unrestricted endowment funds, too many are using the restricted
Endowment funds, also known as dedicated. You know, the John Smith Technology Scholarship is a restricted endowment fund. Say it's for fifty thousand dollars. And and colleges are using that endowment as a piggy bank. And let's remember that the essence of the reason for endowments is to ensure that a college can live into perpetuity, can exist into forever.
And and what's happening is this relatively, relatively recent overuse, and some would argue even abuse of unrestricted and restricted endowments is moving its way into public awareness. We're I'm seeing it more and more. And so here's my speculation if a college overuses or abuses its endowment, and there are many stories to that effect.
We talk about them on the College Financial Health Show with Matt Hendrix on Tuesdays. You can count on that becoming an increasingly negative indicator in the media and for the public. You just can't take restricted endowment funds from someone who 75 years ago gave $10,000, whatever it was, for a nursing scholarship, and needing to use that today to keep the lights on, to meet payroll.
Gary Stocker (17:20.724)
Is not what that donor wanted some 75 years ago. They wanted that amount of money to be there into perpetuity for using for use as a specific scholarship or whatever purpose, a building, a program, whatever the case may be. Now colleges will quickly say, well, it's a loan, we're gonna pay it back. Not for a second. Not for a second. Do I believe that? Because again, this the financial health of so many colleges is so.
So poor that they're not going to be able to afford how to do that. So, David Oxtaby, thanks for the reference. I'll give you credit from this day forward.
So let's talk about terminology. And Malik Corey had a story on October 3rd, I think it was LinkedIn. I don't see that in my notes. And he used some vocabulary terms used throughout higher education. And I want to talk about a couple of those because he says some good things, and I'll add my comments as appropriate, about some of the things referenced in traditional and typical higher education communications. And the first one is communications.
And he states that sometimes a failure of communication really means we disagree.
Gary Stocker (18:37.43)
And what he's suggesting is that higher education uses these words to avoid saying what they actually mean. He goes on to write that sometimes a demand for transparency, a demand for transparency means we want access to a decision that is not ours to make.
We want to call a pitch out in the in the MLB playoffs that are going on right now, but it's not our call to make, it's the manager's call. And protecting the community is another phrase he used. Sometimes protecting the community means protecting the people already and only inside the institution. It doesn't extend outside of that. And he goes on to conclude that it's not a faculty problem. Presidents do it, boards do it, accreditors do it, administrators do it.
The deeper issue he writes is that higher education has never fully reconciled what it believes itself to be, what it believes itself to be with how it actually operates. And he's right. He's right. And I share this as a reminder that the perception of higher education as some kind of untouchable public deity of some sort has long since gone away. Long since departed.
It's not anymore. And that's why we're picking apart what they try and call themselves. This is an industry scrambling at all levels. At all levels to either survive or find other ways to thrive. And as I talked about at the top of the show, Ed Yak College and Audubine University, I believe, they started a merger in 2023. And it is in it is falling apart. And I'll post the link in in the show notes.
And Ben Englesby had the story at Higher Education Dive last week on the twenty ninth of September. And you can read the stories on your own, read the details, ugly details on your own. And and here here is its bigger picture. This was a merger puffed up and and promoted when it happened. That's looks like it's not going to survive.
Gary Stocker (20:44.396)
And so any college that starts to look at a merger, and that can be faculty, staff, community, board members, any college that starts to look at a merger will have opponents cite this probably failed merger. But bear with me as I step through this. And yes, this is this is likely to become a ready-made cautionary tale for anyone who wants to argue against multi-college combinations. And remember, this is a mom and pop.
Two colleges, not enough in my mind. It's not that it's not working, it's poorly designed. The merger was poorly designed. And one failed model does not invalidate the strategy of mergers, especially large scale mergers. Again, like I just said, this is a mom and pop merger. No scale, no efficiencies. And they had the issue of confusing cooperation with governance. Governance is a set of rules defined in advance.
Yeah, it looks like they didn't choose to do that if with outer bind and antibi and anti act.
And and and they built the assumptions, the financial assumptions, around optimistic growth assumptions. Even in 2023, the presence of a declining market was obvious to anybody who looked. And you gotta scale, your scale projections must be conservative. And they did not do that here. And the scale, the benefits of scale, has to precede some of the promised benefits. Scale takes time to implement, scale takes time to show up.
And this college, these two colleges weren't willing to wait. And financial transparency has to exist inside the organization too. Antioch had reportedly had difficulty separating this its coalition spending from its own because the coalition, believe it or not, didn't have a separate operating budget.
Gary Stocker (22:40.642)
So this one's not gonna work, or if it comes back comes back into play, good for them. But still mom and pop is not enough. And in critics of future college mergers and multi college systems, you've heard me talk about 10 or more colleges need to come together in a holding company kind of model. Future college mergers opponents will inevitably point to Antioch and Honor Biden and say, Hey, see, these arrangements don't work.
They'll be drawing the wrong conclusion. The Antioch Otterbine failure, if that's what happens, does happens, doesn't prove that consolidation is a bad strategy. It demonstrates how difficult, this is a good point, how difficult consolidation is when governance and financial responsibility, authority, and downside risk aren't unmistakably resolved before institutions are joined together.
We will see lots of mergers and I know folks talk about it lot now, and maybe there's a lot happening behind the scenes. I'm reasonably intimate with this kind of stuff and I don't see it. I still see a lot of mom and pop discussions taking place up there. So in in my mind, I've talked about this before.
Gary Stocker (23:57.325)
The future of higher education mergers is something like 10 or more colleges coming together in a holding company model. I just referenced that. Yes, faculty and community leaders will typically be against a business model like this for now. You just gotta expect it. That's probably part of what's happening at Antioch and Audubon. And I'm familiar with other merger discussions taking place that those kind of conversations are already.
Being thrown out there. They don't like it. But here's what happens. Here's what happens. Here's when it happens. It happens when the economics and finances are so problematic that resistance, no matter how vocal, no matter how persistent, becomes an insignificant factor to the business model, to the financial piece. It is when the obvious financials, current and projected,
Current and projected demonstrate that anything less than aggressive scaling, that means no mom and pop mergers, anything less than aggressive scaling will result in a college's failure to th to thrive for sure, and even survive is a realistic scenario. There's an old there's an old sales rep. I sold medical equipment for 10 years. There's an old sales rep saying some will, some won't, so what?
Next. And I would offer that that applies to colleges that will be given the opportunity to opportunity to scale their academic and non-academic operations. Those that are first movers, those that are first movers will get a chance to design the new business model for their college.
Those who are laggards, those who say no initially, will find themselves on the outside looking in. And I will remind you yet again there are too many colleges, way too many colleges, and not enough students.
Gary Stocker (26:04.824)
There will be consolidation. There will be closures. There will be mergers. And these changes in my mind, the changes to higher education will come rapidly. Very rapidly. The tough part, the tough part is knowing when that tipping point, when that tipping point will actually happen. Sooner rather than later. But it's a tough call to make. And as always, thanks for making time to listen to the podcast. I'll be back next Monday with another podcast episode.
For now I'm Gary Stalker at College Viability. Thanks as always and take care.