College Counterpoints

Gary (00:01)
It's March 1st and it's another edition of College Counterpoints. My name is Gary Stocker.

Joseph Pellerito Jr. (00:08)
My name's Joseph Pellerito Jr. It's great to be here, Gary.

Gary (00:13)
So Joseph, last night the news broke, not surprising anybody who follows higher education, that Notre Dame College announced its closure. It will close at the end of business this spring or summer sometime. It's been expected for a long time, but Joseph, as do most colleges that close, almost all, Notre Dame College sought out a last minute business marriage partner, and I think they danced with one of the colleges, the name escapes me. But in the end, no consummation, no consolidation was made.

It happens all the time, Joseph, how correct am I that this college closing pattern will continue?

Joseph Pellerito Jr. (00:51)
Well, first of all, I think it's no doubt Gary that smaller privates, nonprofits, et cetera, are going to be closing over the next year, couple of years. We know that there's been some predictions that we could see as many as 20 close over the next 12 months, but we'll see. I can't really speak to Notre Dame's, Notre Dame colleges preparation.

in terms of their closure. I don't know what kind of communication they provided to their students. I'm hoping that they follow best practices, but I'm guessing perhaps they didn't. But I can speak to the other side of the equation is, you know, what are other colleges doing when these kinds of announcements are made? And that's where I'm really interested.

Gary (01:46)
So, you know, I'm a data guy. I think you have taunted me mercilessly about that fact. And when this broke last night, I got home late last night and I jumped on the 2024 Private College Viability app. And I went out and looked at Notre Dame's numbers. I'd looked at those before. I thought, you know what? I bet I can find other colleges with similar kind of bad financial and enrollment and outcome data as Notre Dame College. And sure enough, I did. And you know what that tells me, Joseph? That...

While Notre Dame is a small, like you said, small, private, nonprofit religious college, the others were not religious. They were private nonprofit. There are still way, way, way too many of these colleges in the same type of dire financial strait that ended up in Notre Dame's closure announcement yesterday. Even from the six or seven I looked at yesterday, you can't differentiate one from the other, even though Notre Dame was one of them.

I don't know if they were all closed and probably not. But the data suggests this isn't going to go away. And I know you want to focus on what happens to the students. And that's important. But it's almost like colleges need to form their own division to take care of students from closed colleges.

Joseph Pellerito Jr. (03:02)
Yeah. Yeah. Well, it's funny. You mentioned the college viability app. I did the same thing here. I opened it up as well and started looking at the data for Notre Dame and I started looking at other colleges in the region because I'm, uh, you know, we're talking about Ohio right now with, with Notre Dame college, but I'm interested in the Midwest as well. And are there regional differences? But I saw the same thing that there are data that could be sort of a foretelling.

of things to come. And yeah, I have to say I'm interested in best practices in terms of how schools are managing their downward enrollments and when they get into trouble, what are they doing in terms of best practices to not only sort of look for partnerships as you alluded to, but also what are they doing as worst case scenario to prepare their students and the students' families.

for this inevitability. What I've seen happen too often, and I know you have as well, is that students are often last to know about what's happening until it's too late. And then trying to transfer into other programs, that's a pretty daunting proposition. And it's not really fair to the students or the faculty for that matter.

Gary (04:27)
And then, you know, I've discussed off the microphone before that there are, you mentioned good practices and the worst practice was five or six years ago, Mount Ida announced in March or April, they were closing in May. They're the worst case study, but there have been colleges that do it well. McMurray here in Illinois closed a few years ago, let the students know, got them placed. Are you aware of other colleges doing something similar to plan for?

students when their colleges closes or undergoing financial trauma.

Joseph Pellerito Jr. (05:04)
I don't know of any schools that we could hold up at this moment as sort of best practices. I know that from the sort of the other side of it, I know that University of Mount Union and Alliance Ohio is doing a great job in terms of acting quickly, creating policies that say, you know what, we're going to bend the rules, widen the pathway for students that are.

finding themselves in these unfortunate situations like the students at Notre Dame college. And we're going to have a robust transfer policy. We're also going to identify, you know, money to help these students with the transfer process and so forth. So, you know, I think...

I think that Mount has done a great job with communicating to students at Notre Dame College. Hey, you know what? You're welcome here and we will make this work. Now, is there a perfect fit one -to -one for every student that might want to take advantage of that? Of course not. And that's the other, the other challenge, right? But at least Mount is, is sort of doing what

they can in terms of helping those students make that transition.

Gary (06:27)
So I think consolidation will be a topic you and I jump on regularly in the coming weeks and months and even years, because it's going to continue. It's going to continue. But I'm going to change to a kind of a different one. And you know, I can be a mean, mean person. I'm even mean to you on occasion, I think. My apologies, by the way. It was a book out a few years ago called The Everything Store. And it was written by Brad, his last name escapes me. And it was a fascinating look at Amazon. And...

Joseph Pellerito Jr. (06:42)
Yes.

Yeah.

Gary (06:57)
One of the things that Amazon did back in the day when they were growing to what they are now was they would identify a business and they would say, we want to get in that business. And one of those was Zappos, which was in the book, Z -A -P -P -O -S, the shoe company. And Zappos had formed on its own. They had done a fabulous job of selling shoes online. And believe it or not, Joseph, I just bought my first pair of tennis shoes online a couple of weeks ago. So it's even hit me. And Amazon made this decision. They wanted to get in the shoe business.

And so they found a way to make Zappos financially come to its knees. And I won't bore you with the details until Zappos essentially said, tell you what Amazon, you can buy us. And Amazon and Zappos negotiated some kind of a purchase price. And Zappos became one of the many, many Amazon brands in not that long of a time period, a couple of years at the outset. So I pondered this and me and Gary comes up and says, what happens if Joseph Pellerito University,

has some programs that I want. And Gary Stocker College says, I'm going to go and make Joseph Pellerito University fall to its financial knees with a series of tuition discounts and focused marketing and that kind of stuff so that I can have access to the good stuff that you have kind of on a, what's it called Joseph, when one company takes over another, unfriendly, unfriendly merger, unfriendly consolidation, unfriendly acquisition. Does that?

kind of model, of course I'm teasing about being mean, I'm a fine person, does that kind of model have a place in higher education?

Joseph Pellerito Jr. (08:32)
Well, you know, I hope not. Um, what you're describing is capitalism in higher ed, which, you know, I'm all for capitalism. Uh, you know, I believe in it, uh, when it's regulated and applied thoughtfully and with some level of compassion, I think that higher education, um, is a different animal though. I think that diversity is good. Uh, having more schools is better.

I don't want a big box experience for my daughter, for example, only having big box or for that matter, online options. I want her to be able to decide, you know what? I might want to go to a smaller private nonprofit as opposed to a bigger public. Diversity is better, but will there be more overt competition moving forward as enrollment?

sort of dwindles and dries up. Absolutely. And schools are going to have to get very creative in how they are going to compete in this new market. I'd rather see innovation drive that, uh, that marketing rather than sort of, you know, some of these more, I don't want to call them underhanded, but you know, uh, business related approaches that, uh, that may or may not result in.

Gary (09:55)
Hey, hey, hey!

Joseph Pellerito Jr. (10:02)
the end of the day, a more diverse menu for students. I want students and families to have options.

Gary (10:09)
So let me ask a rhetorical question, Joseph.

When the good folks in the upper echelons of Amazon get together, how much compassion do you think there is in the room at Amazon when they're looking at business opportunities? A lot, a little bit, none.

Joseph Pellerito Jr. (10:25)
Yeah. Well, there's no compassion and you're making my point. You know, I want mom and pops to thrive again. Now that's Pollyannaish perhaps, but when small business open, especially bricks and mortar businesses, I try personally and professionally to support them. Um, I do all I can not to use Amazon, frankly. Um,

I know Amazon is convenient. I know that it's, you know, it's, uh, you know, you can jump on, you can get anything you want and it's delivered right to your door, but you know, we're losing, we're losing something in that equation. We're losing that human interaction and there's some services and some products that still require, you know, human expertise. And I think higher ed is one of them. So as we're eliminating.

people from the equation were eliminating choice, were eliminating options, I think quality is ultimately going to go down. I don't want the Amazonification of higher ed, I just don't.

Gary (11:29)
And Joseph, you're wrong. You're wrong. I'm not making your point. The point is that higher education, just like Amazon, has to drive net cash.

There are certainly subjective components associated with higher education that are much different than Amazon. But if you have to drive net cash, there has to be an element of, I need to drive Joseph Pellerito University into my arms in whatever form or fashion that takes because that is how business is done. And I know there are countless faculty and higher education leaders that say college is not a business. They're wrong too, just like you. It is a business.

and the folks at Notre Dame College didn't treat it like a business and what's happening to them, you know, they're locking their doors and turning their lights out in a couple months.

Joseph Pellerito Jr. (12:14)
Yeah. Couldn't, couldn't agree more than it is a business. You have to really start with how are we going to keep the lights on. And I understand that there's economics at play here, but what I'm suggesting is that we can, we can use innovation and collaboration and models that can promote consolidation, but to a certain degree. I like the idea of smaller schools combining forces.

and having sort of an economy of scale. But when we talk about sort of the evaporation of choice, where schools kind of disappear and we end up with these only large big box offerings, I think, you know, the consumer, students, families ultimately will suffer.

Gary (13:06)
Well, again, a fascinating discussion going back and forth. I know you have a word from one of our sponsors. I'll let you take that to word.

Joseph Pellerito Jr. (13:11)
Yes.

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Gary (14:12)
So the FAFSA delays have been written about, talked about, discussed a lot. And while this was happening and FAFSA announced their delay a month or so ago, Mark Salisbury from tuitionfit .org made a prediction that colleges, Joseph, would find a way to work around this delay from FAFSA. And of course, nobody was surprised that the feds had to delay something. And it's happening.

Joseph Pellerito Jr. (14:35)
Yes.

Gary (14:40)
But it's not happening very much. Most colleges are simply saying, hey, we'll give you another month, another six weeks, whatever, to make your decision whether to commit to our college or not. But there are some colleges that are trying, are working and have announced workarounds that essentially replace the FAFSA. And St. Louis University, again here in St. Louis, is one of those that has really stepped up and essentially creating their own FAFSA for their students. They do require the actual FAFSA to be completed at some point.

But what do you think of a college being that innovative and saying, hey, we'll do our own BAFSA.

Joseph Pellerito Jr. (15:16)
Yeah. Well, I think you and I are going to agree on this, Gary. I think believe it or not, uh, you know, there's no reason for the delay. It's, it's really unforgivable and it's causing a lot of stress for everyone involved, right? From students that are looking to map out their pathways, uh, you know, into higher education from high school to family members who are caring about.

Gary (15:19)
No way. No way.

Joseph Pellerito Jr. (15:46)
those, uh, those young students, as well as, you know, others who aren't going into school from high school. There's a lot of other folks too, that are, that are impacted by this. And I think the, you know, I love old sayings, right? Because they, they, they have value and you know, necessity is the mother of invention. And I, I salute St. Louis university for saying, you know what? We're going to get creative and we're going to do an end around.

And so, yeah, I, I'm hoping that we'll see this happen across the board. And, um, I'm not suggesting we privatize the process, but the workarounds are a good idea as far as I'm concerned.

Gary (16:27)
One of the interesting things that came out of this, and this again, about a month ago, Salisbury posted on, I think it was LinkedIn, that he predicted colleges would find a way to offer financial aid without FAFSA. And Joseph, the man took a lot of serious heat from, I'm going to put finger air quotes here, financial aid professionals saying he was nuts. I'm paraphrasing. And to me, that's not good because...

Mark Salisbury, sharp man, his tuition fit product is fabulous. Let students compare offers from different colleges has been created for many, many years now. And the established financial aid pros didn't even, I'm not sure they even read his whole post. And they took issue that how dare he, paraphrasing again, how dare he say there's another mechanism in place besides what we have always done. What do you think about that?

Joseph Pellerito Jr. (16:58)
Yes.

I can tell you from the inside, from my own experience at many different institutions, one of the biggest problems with higher education are the bean counters, are the accountants, are the folks that are controlling the money. It's often done in isolation. It's rare that faculty and staff are included in those processes. Students certainly have no say in it. And so...

The communication that often comes from the so -called financial aid pros is often convoluted. It's misunderstood. And so the processes, because they aren't done in isolation, are often confounded. And so I would say we need an overall revamping of the financial aid system in higher ed, but that's another conversation, I'm sure.

Gary (18:14)
Yeah. And the one point that I have not seen anybody make in regards to St. Louis, there have been a couple of others doing the same thing, is what would happen if all 3000 plus public and private colleges in the United States created their own FAFSA? Well, that would be an intolerable mess and it's not going to happen. But sometimes if you look at extending an idea to ridiculous nature, you can make the case where we all can't have our FAFSA. But if you've got a handful or two or three colleges saying, hey,

We're going to steal more than our fair share of the 2024 students by getting that FAFSA out earlier. God bless them. Go get them.

Joseph Pellerito Jr. (18:47)
Yeah. Agreed.

Gary (18:49)
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You know, Joseph, that I follow all the colleges, public and private, good news, bad news, all that kind of stuff. And I want to go to Upper Iowa University. It's kind of been between me and St. Louis and you and Michigan a little bit. And they have had financial trauma in the news in the last year or so. And it was last week, I think, I talked about this in the February 15th episode of This Week in College Viability. They came out with a promo, and I'm going to describe it to you, that from now through March 15th, so two more weeks,

Students who want to go to Upper Iowa can make their enrollment deposit, get your checkbook out Joseph, for one dollar. And then as the announcement reads, one dollar become officially become a part of the Peacock, I presume that's their mascot, the Peacock family. And they gave a process to make the deposit and those kinds of things. And all right, a couple of things. And I'm interested in your comments on this.

I will give Upper Iowa some minimal credit for being innovative. If you look at the video on this, I'm holding my fingers not very far apart, but I'm not going to give any points, no credit to families who seize on this offer without looking at the dire financial straits Upper Iowa is in. The 2024 private college viability offer students and families is available. Spend 30 bucks.

Joseph Pellerito Jr. (20:45)
Yes.

Gary (20:51)
to compare all the private colleges are considering, because ladies and gentlemen, upper Iowa, they may or may not close. And I'm never gonna predict a college closures, but I can tell you.

Joseph Pellerito Jr. (20:58)
Listen, Gary, I don't want to, I don't want to cut you up, but I've got to jump in because I couldn't disagree with you more. Um, and this is a, maybe a first, I'm not sure, but I don't give them any credit whatsoever. Um, it's another almost, uh, you know, I hate to use the term, but it's almost bait and switch again. Listen.

Gary (21:10)
I don't know.

Joseph Pellerito Jr. (21:21)
universities, colleges need to take a page out of the auto industry playbook back in the seventies when people began to realize, you know what, we don't want to go into a dealership and, um, and have the bait and switch occur. We don't want to buy a product that's defective. And I'm from Detroit, so I can say this. We want, we want to know what we're buying. We want to know what the price is.

And so what happened was the Japanese manufacturers said, listen, we're going to give a one stop shopping experience. Here's the price. There's no dickering. Right. And you're going to get a product that's going to last the Detroit auto industry learned from that and improved because of it. And I'm going to suggest that colleges, universities need to do the same thing. Here's the problem, Gary. You go on any website in the U S just about.

at any school and I challenge you to try to find a simple answer in terms of what am I going to be paying for a specific pathway, a specific degree? How much is it? The problem is tuition is not clear. It's not easily found. There are fees, you know, and I could name schools, but I won't that have all sorts of hidden fees that are just.

It's ridiculous, frankly. And then there's room and board on top of that. And then there's the ancillary costs, but it's very hard for a young person to go on any website in the U S and to say, okay, this is what I'm going to be paying for. And the other problem Gary is, is that pathway leading to a career or is it leading to a job at Starbucks? Not that there's anything wrong with that. Unless you're paying, you know, six figures for a, for a.

Gary (23:10)
Yeah.

Joseph Pellerito Jr. (23:14)
a degree that should lead to a career. That's the problem with these kinds of schemes. They're just, they're a day late and a dollar short and they've got to do better.

Gary (23:24)
Hey Joseph, we've used up our time for this episode of College Counterpoints and we're at the point now where I released the score for today. And Joseph, I wasn't on my game today. I think I missed some opportunities. I have me with three good points. And Joseph, with that last soliloquy on colleges you took at lead, you've got six. So I think you're on a two week in a row.

Joseph Pellerito Jr. (23:46)
I think from now on I'm going to overwhelm you like I did on that last point. It worked. I mean, if I just keep talking and overwhelm you with my passionate points, maybe I'll win from now on. That's good.

Gary (24:02)
Well, before I wrap this up, I'll always remind you that I am the one keeping score. Hey, for Joseph Palarito, my name is Gary Stocker. We'll call it a day for this episode of College Counterpoints. We'll get together next week. And as always, we appreciate you making time to listen to our podcast. And please, we encourage you to share the link with others. We'll talk next week.