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Monthly Update



August 5, 2024

Rising college closures prompt greater scrutiny

As the school year approaches, high school seniors from the class of 2025 are gearing up to start the college application process. While students and families typically focus on their own finances and factors like academic programs and campus life, they often overlook the financial health of the institutions themselves. 

 

In 2022, 23 nonprofit colleges and 25 for-profit institutions closed their doors. In 2023, at least 30 colleges shuttered. In 2024, the rate of closures was one a week. These numbers reveal a troubling trend, not to mention that before 2022, the highest number of nonprofit college closures in a single year had been 13.

 

According to Jon Marcus of The Hechinger Report, "Colleges are almost certain to keep closing. As many as one in 10 four-year colleges and universities are in financial peril, the consulting firm EY Parthenon estimates."

 

Factors that have led to this unrelenting "perfect storm" include:


  • A shrinking number of high school graduates.
  • Failing rates of college enrollment.
  • Rising costs of college.
  • Shifting perspectives on the value of a four-year degree

 

Marcus predicts these headwinds will push colleges straight off a demographic cliff. 

 

Gary Stocker, a former administrator at Westminster College in Fulton, Missouri, chalks the challenges up to a simple supply and demand issue and told the The Hechinger Report that, “the only thing that’s going to fix this is enough closings or consolidations at which supply and demand reach equilibrium.” 

 

To help students and families make informed decisions during the college application process, Stocker developed the College Viability App which provides data that lets consumers compare the financial health and viability of private colleges, a factor that generally not considered during the search process. He also publishes a companion blog that provides deep dives into college finances, mergers and trends.

 

As the higher education landscape continues to face challenges, the college selection process will require placing greater diligence on an institution’s financial health.


Consumers cannot rely solely on colleges to provide a complete financial picture, especially as many institutions are desperate to recruit students to bolster their revenues. By utilizing tools like the College Viability App and staying informed through resources such as Stocker's blog, students and families can make more informed choices and ensure their educational investments are secure.


Resources:


About Aligned


Aligned is the only state-wide non-profit, nonpartisan business group working in Kansas and Missouri on educational issues impacting the full development of our children, from supporting high-quality early learning to solid secondary programs that provide rigorous academic programs and real-world learning opportunities.


Our vision is that our public education systems in Kansas and Missouri have the resources and flexibility to prepare students to pursue the future of their choice.


We are currently focused on education policies that will strengthen early childhood education, teacher recruitment and retention, and school finance reform.


Learn more about our work.

Missouri News

Foundation puts some four-year institutions on watch list


According the Missouri Department Higher Education and Workforce Development (DHEWD) there are 13 public four-year universities, 14 public two-year colleges, 24 independent colleges, 11 specialized/technical colleges, 17 theological institutions and more than 150 proprietary and private career schools.


The Scholarship Foundation of St. Louis published a "financial solvency alert" that show which colleges are facing a substantial risk of shutting down, this guidance is particularly relevant to for first-time freshmen who have submitted the FAFSA and require financial aid for the 2024-25 academic year.


Below are the institutions that SFSL indicates are in the greatest danger of closure due to recent financial scores and disclosures:


  • Fontbonne University*
  • Harris-Stowe State College
  • Rockhurst University
  • Webster University


The institutions below are on the SFSL watch list:


  • Columbia College
  • Culver-Stockton College
  • Evangel University
  • Maryville University of St. Louis
  • Missouri Baptist University
  • Missouri Valley College
  • Southwest Baptist University
  • Williams Woods University


*Fontbonne University announced its closure earlier this year.


Enrollment trends are a key factor in predicting college viability. DHEWD includes detailed enrollment data in its annual report. See the 2023 annual report here.


Five-year enrollment data suggests that current trends have hit private independent institutions the hardest.


Missouri higher education headcount enrollment between 2018-2022:


  • Public universities decreased by 6.27%
  • Public community and technical colleges decreased by 14.09%
  • Independent (not-for-profit) four-year universities decreased by 15.53%


Schools with the largest drop in enrollment over that period include:


  • Columbia College (-49.95%)
  • Hannibal-La Grange College (-43.47%)
  • Park University (-33.44%)
  • Webster University (-46,53%)
  • William Woods University (-32.86%)


Dudley McCarter, an attorney and member of the Missouri Coordinating Board for Higher Education recently told the St. Louis Post-Dispatch, "There has always been a perception, and I think it is reality, that Missouri has more universities than it needs. The next three or four years is going to be a real shakeout.


State Board receives update on child care subsidy system


The State Board of Education convened this morning for its monthly meeting and received an update on the child care subsidy system. For months, child care providers have struggled to keep doors open amidst a payment backlog that stemmed from the rocky implementation of a new system.


Dr. Pam Thomas told the board that the Office of Childhood is heading in the right direction. They have hired a vendor and assigned two teams to help clear the backlog and address issues with attendance data entry. The goal is to clear these issues within the next month. She estimates 45 working days to effectively clear the backlog and manage current cases.


"We sincerely apologize. We are working around the clock with as many resources as we have. We understand this program is vital not only to the providers and the families, but to employers," said Thomas.

In other news



Kansas News

Enrollment trends stabilize for most post-secondary institutions


According to the Kansas Board of Regents, there are 7 public four-year universities, 25 independent colleges, and 26 community and technical colleges.


According to the SFSL, Benedictine College is in the greatest danger of closure in Kansas due to recent financial scores and disclosures.


In 2023, the Kansas Reflector reported that public higher education enrollment in Kansas had increased by 2% to serve 168,000 for the fall 2023/24 school year. However, Emporia State University saw a decrease of 12.5%.


The Kansas Board of Regents reported that over ten years (2013-2023), public higher education enrollment has decreased by 9.5 %. 


Public four-year institutions with the most significant drop in enrollment from 2013-2023 include:


  • Emporia State University (-22.8%)
  • Kansas State University (-20.0%
  • Pittsburg State University (-22.5%)


Private independent institutions with the largest drop in enrollment from 2015-2022 include:


  • Baker University (-24.11%)
  • Barclay College (-40.91%)
  • Donnelly College (-21.50%)


Ken Hush, president of Emporia State University, told the Reflector that enrollment only paints half a picture, "The rest of the story is what it costs to operate the university. Enrollment numbers hold little significance unless they are compared to expenses. This means enrollment isn't necessarily equal to success."


Incoming freshmen face new graduation requirements


Starting with the class of 2028, Kansas high school students will face new graduation requirements to prepare them for life after graduation. The changes include reducing English Language Arts credits from four to three and a half, with an additional half credit focusing on communication skills through courses like speech, debate, and journalism.


Students must also complete a STEM elective, three science units with a lab component, and three mathematics units.


The Kansas State Department of Education emphasizes employability skills and technological proficiency. Additionally, students must take at least two post-secondary assessments, such as the ACT or SAT, or engage in community service or extracurricular activities. Despite these changes, the total credit requirement remains at 21.


Task force to study whether students should be left to their own devices


The Kansas State Board of Education has formed a task force to address concerns about using cell phones and other devices in classrooms following the widespread adoption of technology during the COVID-19 pandemic.


Some districts, like Wichita, have decided to reduce technology use in elementary schools, citing budget constraints and research linking excessive screen time to adverse effects on children's development. While some educators welcome the shift, others worry about effective instruction without digital tools. The board aims to balance technology use and student well-being, considering feedback from educators and parents.

In other news



Aligned adds policy director to Missouri team

We are excited to announce that Jim Malle has joined our team as Director of Policy to oversee legislative and advocacy initiatives in Missouri. Jim joined Aligned this week and will lead the implementation of a comprehensive advocacy strategy, build and maintain stakeholder relations, and analyze proposed policies and regulations to assess impact. 


"We are thrilled to have Jim in this pivotal role to shape and advocate for policies that further our mission to amplify the business voice to improve student outcomes and workforce readiness in Missouri," said Torree Pederson, President and CEO of Aligned. "Jim brings a high level of skill in leading partnerships, public policy, and government affairs and will be a dynamic leader on various strategic state-level policy initiatives." 


Jim has extensive expertise in public policy, economic development, and technology startup investments. Before Aligned, Jim held government affairs and policy roles at Blue Cross Blue Shield of Kansas City, Thrive Homes, LLC, and Ygrene Energy Fund. Jim has been a Commissioner of important and influential Incremental Financing Committees for several local municipalities.

Our team enjoyed some nice summer getaways with family and friends, but the long shadows of summer are approaching, which means it's back to school for the kiddos and more time to focus on getting ready for legislative sessions in 2025. We have so many exciting plans in the works.


Stay tuned!

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Torree Pederson

President

Aligned

Torree@WeAreAligned.org

(913) 484-4202

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Linda Rallo

Vice President

Aligned

Linda@WeAreAligned.org

(314) 330-8442

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