The Fora: A Higher Education Community

apl, is your alma mater associated with a denomination, something which can (and presumably does?) financially underwrite the school?

Quote from: kaysixteen on February 16, 2024, 10:57:40 PMapl, is your alma mater associated with a denomination, something which can (and presumably does?) financially underwrite the school?

It's a denominationally-affiliated school.  But our denomination is structured as an association of independent local churches, not a top-down hierarchy.  That means that we've never have central institutions with a lot of money to fund things like colleges.  Alma Mater might get some money from the denomination, but it has never been a whole lot.  Most denominational-level funds go toward overseas and home missions.

Notre Dame of Ohio,
https://signalcleveland.org/notre-dame-college-says-no-update-yet-on-its-future/

Concordia, Michigan/Wisconsin
https://www.wemu.org/wemu-news/2024-02-14/ann-arbors-concordia-university-facing-financial-crisis

and Allegheny College
https://www.bloomberg.com/news/articles/2024-02-15/longtime-pennsylvania-liberal-arts-college-cut-to-brink-of-junk

I can't get behind the pay wall to the full story, but what gives with Allegheny? They are higher ranked than my college by a significant amount (They'd probably be called an aspirant of ours) and have similar endowment for somewhat more students (so i can see why that might be a positive that's actually a negative since they probably aren't drawing enough current income from the endowment). Also, their academic staff of 193 might be a bit too rich.  Even so, I wouldn't consider all of that to be death territory.  Do they have some huge debt load?

Quote from: Ruralguy on February 17, 2024, 12:49:22 PMI can't get behind the pay wall to the full story, but what gives with Allegheny? They are higher ranked than my college by a significant amount (They'd probably be called an aspirant of ours) and have similar endowment for somewhat more students (so i can see why that might be a positive that's actually a negative since they probably aren't drawing enough current income from the endowment). Also, their academic staff of 193 might be a bit too rich.  Even so, I wouldn't consider all of that to be death territory.  Do they have some huge debt load?

According to the article, "Moody's Investors Service downgraded the college's issuer rating one notch to Baa3, citing "weak financial operations" and a declining pool of applicants. The college's revenue fell to about $80 million for the 2023 fiscal year — a roughly 7% drop from four years ago — according to its annual reports. The school has more than $50 million of outstanding debt and is wrestling with operating deficits."

I bet its the debt load that really killed them. My school has had some of these other issues, but though our initial run of budgets often gets us to a deficit, we never actually operate at a deficit (make the cuts). Also, our debts have never been as high as 20% of endowment. Also, with debt high and no promising source of new revenue (more students), it doesn't look good. Still, I would think they have time. But things can get bad fast if they are unwilling to adjust staffing realistically (say, mostly through attrition, depending on age of faculty)  and enrollment falls through the floor.

Quote from: selecter on February 17, 2024, 11:29:57 AMNotre Dame of Ohio,
https://signalcleveland.org/notre-dame-college-says-no-update-yet-on-its-future/

Concordia, Michigan/Wisconsin
https://www.wemu.org/wemu-news/2024-02-14/ann-arbors-concordia-university-facing-financial-crisis

and Allegheny College
https://www.bloomberg.com/news/articles/2024-02-15/longtime-pennsylvania-liberal-arts-college-cut-to-brink-of-junk

And yet, Forbes gives Allegheny an A rating

Allegheny College   3.96   A

Source: https://www.forbes.com/sites/emmawhitford/2023/04/26/forbes-2023-college-financial-grades-the-strongest-and-weakest-colleges/?sh=38e64d821097

Allegheny's annual report for 2023 shows that their operating budget was $79 million. Their net tuition was $21 million ($70 million tuition minus $49 million in aid). "Auxiliary" provided another $19 million and endowment payont $5 million. That is far from enough. They balanced the budget by taking  $29 million from the endowment.

That looks like dire financial straits to me. Could they cut aid from $49 million to $20 million and still enroll the same number and quality of students?

Quote from: spork on February 16, 2024, 06:01:43 PMSt. Augustine's University is no longer making payroll.

The Forbes index is garbage.

Quote from: TreadingLife on February 17, 2024, 05:15:41 PM

Quote from: selecter on February 17, 2024, 11:29:57 AMNotre Dame of Ohio,
https://signalcleveland.org/notre-dame-college-says-no-update-yet-on-its-future/

Concordia, Michigan/Wisconsin
https://www.wemu.org/wemu-news/2024-02-14/ann-arbors-concordia-university-facing-financial-crisis

and Allegheny College
https://www.bloomberg.com/news/articles/2024-02-15/longtime-pennsylvania-liberal-arts-college-cut-to-brink-of-junk

And yet, Forbes gives Allegheny an A rating

Allegheny College    3.96    A

Source: https://www.forbes.com/sites/emmawhitford/2023/04/26/forbes-2023-college-financial-grades-the-strongest-and-weakest-colleges/?sh=38e64d821097

Yes, the Forbes ratings are garbage. They have nine financial criteria most of which are redundant [measuring the same thing], together weighted arbitrarily. One or two are about changing one flavor of assets to another, relevant for tomorrow but not next year. Must have been written by an MBA.

What 'ya gotta know is whether ordinary income [tuition, state support, income from endowment] has been greater than or equal to ordinary expenses over the last couple of years [wages and salaries, maintenance, debt service]. Do consider size of endowment separately, for that is what administrations like to dissipate before they have to find new jobs.

This tells us nothing about the future, but aggregate enrollment declines have been occurring over a ten year period so if they haven't adjusted or closed down by now, it's all over.

Right. Size of endowment only matters to the extent 4-5% of it can pay some arbitrary, but reasonable, percentage (whatever it is--some say 30%, but that seems high) of expenses on an annual basis. But you can trick yourself into thinking you are covered under declining enrollment if the endowment is growing. But that's an unsustainable situation if you really care about the mission of the college.

The Forbes ratings are truly garbage. They nuke The University of Selecter, for instance, but our Moody's has been going steadily up, and our debt steadily down, with (very small) operating surpluses several years running. Forbes lags badly, and as is stated, is just based on too much of the wrong stuff. Kinda like colleges were mattress marts. The best stuff that shows where a school really is (to my eye) are on highered data stories, highered dive, and not in 990s, which can be made to lie in the hands of the unscrupulous.

Selector,

Can you explain what you mean by "highered data stories" showing where a school really is? Surely you aren't suggesting that anecdotes are more reliable than data?

Ha! No, definitely not suggesting anecdotes are more reliable than data. One great example is his work on "draw rate," a measure of a colleges enrollment market power, w/ten year trends. It's just fantastic data on the enrollment side. It doesn't have debt and deferred maintenance and fiscal ratios, but what it does have is pretty fantastic.
https://www.highereddatastories.com/search?q=draw+rate

And, Draw Rate is one of many metrics you'll find there.

Additional discussion of draw rate, and retention rate, based on Jon Boeckenstedt's work at Higher Ed Data Stories and the Inside Higher Ed articles listed earlier in this thread:

https://activelearningps.com/2015/04/03/is-your-employer-in-trouble/.

https://activelearningps.com/2015/09/06/is-your-employer-in-trouble-part2/.

Quote from: spork on February 16, 2024, 06:01:43 PMSt. Augustine's University is no longer making payroll.

The Forbes index is garbage.

SACSCOC rejected St. Augustine's appeal, it is now unaccredited. There is also a multimillion dollar tax lien against it. St. Augustine's will supposedly seek a court injunction against revocation of its accreditation, but in the world of reality, it needs to close.