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Is Your college Financially Healthy?
Enrollment trends is one of the leading indicators that a college may be in poor financial health.
College Selection First Question:
Is this college financially Healthy?
In this era of decreasing enrollments in public and private colleges across the United States, it is important to know the enrollment trend for colleges you are considering. The 2023 Parent's College Viability app - Essentials version is a simple tool that lets you compare 4 important private college indicators.
- Benefit 1: Expend time and resources only on financially healthier private colleges.
- Benefit 2: Decrease the risk of a college you select closing.
- Benefit 3: Learn up front which colleges compare unfavorably to others.
There are too many sad college closing stories to share in this space. But the poster child for sudden and traumatic college closures is Mt. Ida College in Massachusetts. In April 2018, Mt. Ida announced it was closing in May 2018. Students, families, faculty, and staff were stunned.
Students had to scramble to find a college that would accept them, provide transfer credits and continue any scholarship tuition discounts Mt. Ida had offered. The stories posted about student caught in the middle were distressing.
Now students, families and others can have the easy-to-use comparisons right in front of them.
Colleges have continued to close at a rate of not quite 1 per month in the past 5 years.
Analyzing a Private College's
Financial Health and Viability
It's not hard. A few simple comparisons will increase
your confidence in finding financially healthier private colleges.
FTE Enrollment
The Parent's College Viability App - Essentials version tracks the past 8-years of a college's reported data to the National Center for Education Statistics. If enrollment has trended up over that period, consider that college more financially stable than one with decreasing enrollment over those 8 years.
Admissions Yield (Popularity)
This measures what percentage of accepted students to a given college actually choose that college over its competitors. A high admissions yield is often seen as an indication that a college is popular with its admitted students. A low yield suggests many accepted students have chosen other colleges.
4-Year Graduation Rate
Students and parents normally consider that only 4 years are needed to graduate with a bachelor's degree. However, users will note many, many colleges have graduation rates (for undergrad degrees) that are below even 50%. If a college cannot graduate even 50% of its students in 4 years, there is cause for concern that the college does not have the proper systems and processes in place to do so.
Endowment
The endowment is built from financial gifts from alumni, students, parents, and other friends of a college. A minimum endowment should be at least $50M. If the endowment is below that number, it suggests a college does not have the systems and processes in place to solicit the financial support needed for challenging financial times nor routine investements in the college campus and programs.
Instead of risking choosing a college that might close . . . . . .
- Save thousands of dollars in the cost of transferring to another college
- Reduce the risk of losing one or more years of lost income
- Know up front that a college is financially stronger OR weaker than its competitors
