In light of the economic challenges of the last year, people have tightened their purse strings, made sacrifices, and held on to the hope that the pandemic would be over soon. Colleges and universities in the U.S. were no different. Faced with record numbers of deferrals (when admitted freshmen “defer” a year, and pay tuition a year later) while simultaneously shifting the educational structure to online or hybrid online/in-person models, some colleges have indeed struggled to stay solvent during this difficult time. Moreover, these effects are exacerbating the preexisting trend of declining college enrollment. But which colleges are in true danger of going out of business?
Investigating a school’s financial health is an essential step that parents and students should be taking in the next month before they commit to a school. Here are a few helpful resources to use to make an informed decision about the status (and the future) of a school’s financial well-being.
1. Edmit
Created by a former Northeastern University VP and Southern New Hampshire University AVP, Edmit is a data-driven goldmine of information about a college’s financial health. When you search by school, you can read about metrics that include endowment per enrolled student and reliance on international students. Edmit’s College Financial Health Analysis page provides a longer explanation of their methodology and data sources.
Each year, Forbes evaluates the financial health of colleges and universities in the U.S., distilling this data into a handy table with grades ranging from A through D. Schools with grades of D and D- are the ones that deserve further investigation as they are the most economically precarious.
Developed by The Hechinger Report, a newspaper that originated from Columbia University’s Teachers College, this Financial Fitness Tracker is a great tool for parents and students. Simply type the names of the schools you’re considering into the search bar, and see if they flag the school as having “a warning sign in its financial stress scores.”
Somewhat controversial in the higher education world, this analysis from Scott Galloway (famous for his podcast “The Prof G Show”) nevertheless offers interesting data points to consider. You can agree or disagree with the conclusions he draws about the future of higher education in the U.S., but the gem within the article is the excel spreadsheet he provides that shows how he came to rate each university as “Thrive,” “Survive,” “Challenge,” or “Struggle.” Students and parents can use Prof G’s sheet on college financial health to get a truly fascinating deep dive into, as he puts it, value versus vulnerability.
Ultimately, paying for a four-year degree is an expensive purchase, and families should do their research the same way they would evaluate other expensive purchases like real estate or a new car. It’s better to be pragmatic and go into this process eyes wide open than to be surprised if a college goes out of business halfway through a student’s time there.