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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.
Speaker 1 (00:01.262)
It's September 1st already, 2025. Hi, everybody. Gary Stocker back with that September 1st episode of This Week in College Viability. And we're doing the best of today. I've pulled five clips from folks I've interviewed over the last couple of months. We're going to talk about three key metrics to look at when looking at the financial health of a college. That's in an interview I had with Paula Langto. And we're going to talk about why colleges don't
announced closures. Paula and I both are going to have some comments on that. The last three clips are with Ricardo Aziz, who talks about start your merger and acquisition discussions early. He talks about how higher education is in the consolidation era. And he says, hey, it's the one-on-one approach to negotiate mergers that's the one that works the best. So stay tuned for the Best of episode of This Week in College Viability.
When from the perspective of students and parents, Paul, there's just three things I encourage folks to look at that really quickly reveal the trends, patterns, and comparisons at a college. And those three things are enrollment. And again, the app that you mentioned, thanks for mentioning those. The College Viability app for students and families tracks the last eight years of enrollment trends. If that enrollment has gone down in each of the last eight years or over the last eight years,
Be concerned. Look at the four-year graduation rates. I am a minority when I say graduation rates matter because they're more than, believe it or not, you know this, more than half of American four-year public and private colleges do not even graduate half of their students in four years. That's an unspoken national catastrophe. You want to look for colleges that have the capacity, the historical capacity, to graduate at least, and that's being nice, at least 50 % of their students in four years. And even, sadly,
I track six-year graduation rates, and there are too many colleges that don't even graduate half their students after six years in college. And finally, something called an endowment, simplifying it as kind of a savings account. And if your college that you're looking at doesn't have an endowment, and I track this for you, for almost 3,000 private and public colleges in the country, if they don't have an endowment of at least $50 million, $50 million, be concerned.
Speaker 1 (02:19.64)
So the next clip with my interview from Palo Alto is why don't colleges make their closure announcements earlier?
Speaker 3 (02:29.678)
Well, I'm actually going to take this in two parts because the first one is I want to talk about why the institution may not be as transparent or give as much notice as students and families might like. And one of the reasons for that is that, you know, human nature, people tend to react without thinking about if it's in their best interest. And as a result of that, sometimes accrediting organizations say,
Don't announce until you have all of the teach-outs lined up, until you have all of the communications ready for the student, until you can explain to them what's gonna happen next. Because if you think about it, if an institution announced, we're gonna be closing, I don't know, in six months, for example. As a student, you're gonna say, what does this mean to me? Where can I go? What kind of help am I gonna get? And you want all those answers right now. Or you're in your dormitory packing up to get out.
And what we don't want is for someone to leave to their own, you know, to their own harm, because when they leave, then they don't find out about the teach outs. They don't get the opportunity to make sure they get all of their credits and transfers. They get these guarantees that the teach outs can provide. So we are actually required to have all of that lined up by our creditors before we announce so that students don't panic.
and actually do harm to themselves in terms of, you know, their next steps.
In the next clip Ricardo Aziz talks about start those merger and acquisition discussions early doesn't mean you have to commit to it but it's better to start sooner rather than later.
Speaker 2 (04:09.474)
And remember, exploration doesn't mean you have to merge, but you should, boards and executive teams should begin to look at mergers as a tactic that is not of last resort, but is a tactic that actually will be mandated by the marketplace, mandated by the economic realities of what we're facing sometime in the future. And we might as well start early. Start early because we might find that a deal. Partner, start early because we don't have to rush and make a deal that we didn't want to do.
start early because we have better negotiating positions, start early because in the end we may decide that's not for us, but that's okay. At least we studied it well and understood what's needed. Lots of boards, lots of executive teams absolutely refuse to do that. They wait to the last minute. Then they're scrambling trying to find a partner. They're not good candidates themselves, right? They don't have any assets, they don't have a name, et cetera, et cetera. And then nobody wants them and they close.
We are in the higher education consolidation era. Listen as Ricardo Aziz explains why.
I share regularly, I want you to comment on this, that higher education is in a consolidation era, both in the form of closures today and mergers in the coming months and years. Am I correct on that in your estimation?
Well, know, it's been predicted, Christensen and colleagues predicted a number of years ago that there would be a significant amount of closures across the United States in higher education because they saw what we're seeing today, right? They saw that actually there was, you know, tremendous excess capacity and of course a declining population. But, but so the answer is yes. I think those three forces that we talked about, excess capacity, declining demand and increasing costs are going to force consolidation.
Speaker 1 (05:54.798)
The final clip today is Dr. Ricardo Aziz talking about why the best approach to negotiating mergers is one-on-one. Here he is talking about that topic.
Speaker 2 (06:07.854)
So let's say it's the president who realizes we need to explore mergers. Even if we don't do them, we need to actually have a genuine evaluation of the potential that is out there. Your best bet is to begin to educate and discuss this in a one-on-one manner, in a personal way, with individuals that will help you create your positive, if you would, your team. That may be the board chair. That could be the board vice chair.
and so on. don't generally advise you to advise presidents to meet with more than one person at a time because the group dynamics immediately fall into place, right? This is such a sensitive issue that people tend to sort of try to look around and see what is the other guy going to say, what's the other guy going to say, and that's not going to be helpful here. So one at a time, start getting your team