Holiday Greetings 2021

Time for another semi-annual update on the financial condition of some U.S. colleges and universities. Standard disclaimer: this is my opinion, based on publicly-available information.

In the interest of holding myself accountable, let’s begin with some of the schools that I’ve profiled here before.* The number to the right of a school’s name refers to the percentage increase in expenses per FTE undergraduate from fiscal years (FY) 2011 through 2020. The higher the number, the worse the situation.

Bethune Cookman University: 57.

Bethune-Cookman has been in deficit every year since FY 2014. Its undergraduate FTE enrollment fell by more than one-fifth between FYs 2011 and 2020. For details on the school’s financial mismanagement, resignations, firings, and other misdeeds, see the news articles embedded in the blog post linked at the asterisk below. A July update on Bethune Cookman’s debt restructuring is here.

Burlington College: closed.

College of New Rochelle: closed.

College of St. Joseph: closed.

College of Saint Rose: 39.

Saint Rose’s undergraduate FTE enrollment declined by 17% between FYs 2011 and 2020. It had deficits in FYs 2014 to 2017, 2019, and 2020. Its struggles are detailed in its student newspaper.

Guilford College: 62.

The good news is that Guilford successfully completed a $6 million fundraising campaign after ditching its interim president’s plan to eliminate academic programs and fire faculty members to cut costs. The bad news is that its undergraduate FTE enrollment decreased by 53% between FYs 2011 and 2020. Guilford also had a deficit of $5.6 million and a net operating margin (net revenue divided by total operating expenses) of -10.6% in FY 2020.

Iowa Wesleyan University: 33.

Iowa Wesleyan’s articulation agreement to provide an online bachelor’s degree in business to students at a community college hundreds of miles away in another state doesn’t seem to have created a financial windfall. For FY 2020, IWU posted a net operating margin of -16.86%. The school has been running annual deficits since FY 2013. Its reported undergraduate FTE enrollment had climbed to 617 in 2019-2020, up from the low 400s in FYs 2014 and 2015, but still lower than in 2011. Interesting fact: IWU’s current president is the former president of Burlington College.

Macmurray College: closed.

Mills College: closed.

Judson College: closed.

Viterbo University: 58.

Viterbo reported an undergraduate FTE enrollment of 1,492 in FY 2020, a 23% decrease from FY 2011, so although it hasn’t been running deficits, expenses per student have skyrocketed. Last month it announced the creation of an eSports program in an attempt to attract more students. The College of St. Joseph tried the same thing.

Warren Wilson College: 47.

Warren Wilson’s undergraduate FTE enrollment climbed to 712 in FY 2020, but that’s still 24% lower than it was in FY 2011. The college has been running deficits annually since FY 2016.

Wilberforce University: 45.

Wilberforce’s accreditor removed it from probation most recently in November. Its undergraduate FTE enrollment dropped by 25% between FYs 2011 and 2020, to 487 — but undergraduate FTE was only 315 in FY 2018. Wilberforce’s FY 2020 IRS 990 form shows that it collected $8.6 million contributions and grants, covering more than half of its expenses, but it earned only $5.7 million in program service revenue (tuition). This means academic operations don’t generate nearly enough revenue to keep the budget balanced.

Finally, here is an institution that I haven’t discussed before:

College of Idaho: 69

Idaho’s undergraduate FTE enrollment climbed to 1,086 in FY 2020, after languishing in the 900s for the four previous years. But this figure represents zero enrollment growth since FY 2011, while total expenses have increased by about two-thirds. Idaho ran deficits ever year since FY 2011 except in FYs 2014 and 2016, when it booked $9 million and $40 million in contributions, respectively. This is another school where sales revenue is less than operating costs.

As I pointed out in May of 2020, a business model that focuses on selling an experience instead of an education, and that is dependent on dorm and meal plan revenue from full-time, campus-residing undergraduates, is inherently fragile. The model works great until it doesn’t. As the historical data show, for many small, private, not-for-profit colleges and universities, it hasn’t been working for a long time .

* I predicted the end of Burlington in August 2014 and of Mills in July 2017. I profiled Saint Rose, and included an update on Burlington, in December 2015. Macmurray and New Rochelle were mentioned in August 2017. I discussed Bethune-Cookman, St. Joseph, Guilford, Viterbo, Warren Wilson, and Wilberforce in December 2018. Information about Judson, along with updates on Saint Rose and Guilford, appeared on this blog in February 2021.