It looks like Earlham’s endowment is $438 million with 900 students. Impressive. Should keep the doors open for awhile.
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It appears as though Lincoln College will be closing, reportedly due to the 1-2 punch of Covid and a ransomware attack.
Circling back around to Bloomfield College, it will stay open, at least for now, as reported back in March (though I missed it then): N.J. university steps in to save Bloomfield College from shutting down - nj.com
Lots of weirdness with this one—it’s a private college (Bloomfield) being rescued with a loan from a public one (Montclair State), and the loan is state-guaranteed so that (if I read correctly) Montclair State won’t suffer a financial loss if it can’t be paid back.
Bloomfield and Montclair State are located just seven miles apart, and are reported to be working on some sort of permanent alignment/partnership, but I’ve found no details on what that might look like.
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The Forbes 2022 college financial grades are out. 905 schools were graded. Of those, 60% (539 schools) had a C or below. 226 had a score of D, so about 25% of private colleges scored by Forbes.
Some of the colleges mentioned recently in this thread, with their 2022 financial grade, are:
- Earlham: 2.59, B-
- Guilford: 1.18, D
- Bloomfield: 1.00, D
- Saint Leo: 1.21, D
- Bard: 3.77, A- (was an “Achiever” going from a C+ to an A-)
- Marymount: 1.39D
Some schools that haven’t been listed on this thread lately, but whose scores were in the D range include: (Note, Forbes gave no grade lower than a D, even though some of these “grades” would be lower than a D in just about all school systems I’m aware of.)
- Lenoir-Rhyne: 1.04
- Wingate 1.16
- Shenandoah 1.18
- Huntingdon 1.27
- Spring Hill 1.28
- Presbyterian 1.29
- Belmont Abbey 1.35
- Samford 1.4
- Rensselaer Polytechnic (RPI) 1.4
- Sarah Lawrence 1.46
- Saint Michael’s 1.46
- Wentworth Institute of Technology 1.46
- Clarkson 1.41
- Merrimack 1.33
- Hood 1.21
- U. of New Haven 1.18
- Manhattanville 1.14
- Pace 1.10
- Azusa Pacific 0.98
- Roger Williams 0.85
- Rider 0.84
- Drew 0.66
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A lot of these small schools need to merge up or at least share resources. There is too much overhead needed to provide student services for a small school to survive. They need to consolidate overhead to have a chance.
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(Sorry for the double post. Something happened while I was typing and the ‘edit’ button didn’t show up).
Some of the schools aren’t near other schools, so teaming isn’t very practicable. Also, some aren’t all that small; St. Leo’s, U of New Haven are pretty big.
I don’t think the Forbes ratings work all that well for the small catholic schools. They may own their buildings or rent then from a religious order that’s pretty well off. The top administrative people may make a salary in line with other similarly sized schools, but that salary is donated back to the school or the order. On the books they are paying the president $500k but that money doesn’t really leave the school.
Presbyterian is a very small LAC, but the school of pharmacy is close by and I think does pretty well. Not sure how that reflects on the Forbes scale.
I have faith that these schools aren’t all failing.
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I don’t think the implication is that all of these schools are failing. It’s that one unanticipated event (another pandemic type event, pullback in the market thus reducing the size of the endowment, rise in interest rates, inflationary environment, increase in health insurance costs) can trigger a cascade… which could then cause a spiral.
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The schools don’t need to be next to each other to merge. All the back office functions like financial aid and administration can be consolidated. If there are three 1200 student colleges, there don’t need to be three college presidents. Marketing spend can be consolidated. If the schools are relatively close, departments can be swapped so each school doesn’t need to have its own math or English department.
I want these schools to succeed, but the small private schools are on the wrong side of history, and they need to adapt or they are going to die.
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I have heard two rumors about the future of Wentworth. For some time now the idea has been floated that Wentworth would merge with UMass Boston and eventually relocate to the UMass campus. UMass Boston does not currently have an engineering school. Adjacent Northeastern University would likely acquire their campus. This possibility is fading as some UMass Boston faculty have complained that there is an anti-STEM mindset among UMass Boston administrators.
The second possibility is that Wentworth would merge with Northeastern. Wentworth essentially only offers engineering and architecture. This would dovetail with Northeastern’s mission.
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Including admissions? There’s; no reason this couldn’t be handled by a contract company, like payroll is. Why not Central Admissions that does admissions for ten or a hundred schools? It’s the logical extension of the Common App.
I can hear the howls on CC now.
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Very surprising. A bunch of the schools you listed are pretty popular in my area, including RPI and St. Lawrence.
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It was Sarah Lawrence, not St. Lawrence. But yes, some surprises on here, particularly since some of these are popular and I’ve recommended them to others to look into!
Taking Wentworth under it’s wing sounds like a no brainer for Northeastern…
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Not sure what was their methodology but at the other end of the spectrum they downgraded some schools with massive endowments that skyrocketed during the pandemic. On the other hand they upgraded to A+ some schools that did good in that regard but still have a much, much lower endowment/student than say Pomona College. It really makes no difference at the high end whether they go from A+ to A- on a list like this but makes me suspicious of their at risk of going down school assessments… Rankings like this can do real damage to institutions and whole communities if they are inaccurate.
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Does anyone see a link to the raw data? It would be interesting to see how each school performs on the various metrics that are included in Forbes’ methodology.
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No, I didn’t find a link to the raw data. I think last year they ended up posting a link to download the data, but that’s not available, at least not yet. Perhaps once the rankings are no longer new news the data will be posted.
I agree @notigering about the importance of having reliable data. There were some schools that I recorded their 2021 scores so I was able to compare 2021 to 2022. For schools that have significant variation, I think it can cause questions, but for schools that are consistently scoring in a similar range, I think it helps to see patterns on an issue that frequently isn’t on the radar of families. But it’s also one of the reasons why I posted here…there are many knowledgeable posters here who can also shed light on any gaps or weaknesses in the data, or provide additional context.
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The additional context I can provide is that the last two years were hell on colleges that are tuition dependent. (less of a problem for schools with a robust endowment, have huge, multi-year research grants and contracts, lots of Intellectual Property and patents that throw off cash).
Every kid that decided to take a semester off, or postpone enrollment due to Covid- is lost revenue that never gets recovered. Every piece of plexiglass installed in the dining hall to keep people from coughing on the lettuce, extra custodial staff hired to wipe surfaces, longer hours for the nurses in the health center to keep up with the demand… these were unbudgeted costs that needed to be covered.
Not easy managing an institution these days…
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“1. Endowment Assets Per FTE (15%): This measures schools’ endowment assets at year end per full-time equivalent student. Stanford, MIT, Harvard and Yale each have more than $1.5 million per student, and Princeton has more than double that. Private colleges generally needed more than $335,000 per student to receive full credit in this category.”
They basically weigh endowment assets per FTE at 15% which sounds low to begin with. Then they give the full 15% to any college that has more than $335,000. Some schools that were downgraded have over five times that endowment. Williams got a B+ which makes little sense as it is a much, much wealthier school than most of its B+ peers.
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This is exactly why having the raw data would be helpful, we could see how dependent on tuition each college is.
Each of the inputs are interesting. #8 is especially interesting (% of freshmen getting grant aid), because it (understandably) rewards schools with a low percentage in that measurement (meaning it rewards schools with a large proportion of full pay students). Some potential applicants who need FA might be concerned about how they would fit in at a school with a large proportion of full pays. For those wondering whether this affects the vibe at a school like Wake Forest, with 66% full pay students, well…spoiler alert, yup.
Here is the Forbes methodology:
Methodology:
Forbes College Financial Grades are designed to assess a private not-for-profit college’s balance sheet health and operational soundness using the following nine measures. Our data is derived from the Department of Education’s National Center For Educational Statistics. Only schools with more than 500 full-time students were included and public colleges were not graded.
1. Endowment Assets Per FTE (15%): This measures schools’ endowment assets at year end per full-time equivalent student. Stanford, MIT, Harvard and Yale each have more than $1.5 million per student, and Princeton has more than double that. Private colleges generally needed more than $335,000 per student to receive full credit in this category.
2. Primary Reserve Ratio (15%): This ratio broadly measures a college’s liquidity, grading how well its expendable assets could meet its annual expenses without straining its normal operations. Expendable assets are defined as total unrestricted net assets, plus temporarily restricted net assets, plus debt related to property, plant and equipment, minus property, plant and equipment net of accumulated depreciation, divided by total annual expenses. Pennsylvania’s liberal arts and science bastion Swarthmore College, which scored and A+ grade and a primary reserve ratio of 11, could cover 11 years of expenses with its existing assets. By contrast, Georgetown University, which scored a B- minus, has a ratio of 0.64 based on most recent government data. Any college with a ratio of at least 2.4 received full credit.
3. Viability Ratio (10%): This metric analyzes a college’s expendable assets divided by its debt load, similar to the primary reserve ratio’s measurement relative to annual expenses. Schools with no debt received full credit, as did any college with a ratio of at least 2.6. Because of more than $425 million in debt related to its facilities, venerable Williams College (B+) has a viability ratio of only 0.25 versus 6.04 for nearby rival Amherst College (A+).
4. Core Operating Margin (10%): This measures whether tuition, donations and investment revenues cover a college’s educational expenses by subtracting its core expenses from its core revenues and dividing the difference by its core revenues. Little known National University of San Diego, with its adult learner focus, had an operating margin of 59% versus Duke University which had negative margins for fiscal 2020.
5. Tuition As A Percentage of Core Revenues (15%): Diversified revenue streams make any organization more financially secure, and colleges are no different. Schools that get the lion’s share of their revenue from tuition are more vulnerable to enrollment declines and price competition. Tuition accounts for less than 10% of revenues at only 9 colleges, including Yale, Caltech, MIT, Hillsdale College and Brigham Young University.
6. Return On Assets (10%): This metric divides a college’s change in net assets during the year by its assets at the beginning of the year. Full credit went to only 25 colleges with at least a 23% return, including Bard College, National University and Nashville’s historically Black Fisk University.
7. Admissions Yield (10%): Any college would rather be an applicant’s first choice than their safety school. Admissions yield measures the percentage of accepted students who choose to attend, and a higher number is a sign of a healthy enrollment. While top ivy league colleges tend to have yields in the 70% range, tuition-free College of the Ozarks, which Forbes dubbed “Bible Belt Ivy” and has a “work for tuition” requirement, had an admissions yield of 87%. Any school with a yield of at least 52% received full credit.
8. Percent Of Freshmen Getting Grant Aid (7.5%): Colleges that hand out scholarships and grants to a large chunk of their incoming freshmen may be wealthy and generous, but an unusually high percentage in this category is often more indicative of desperation to entice students to enroll. Every school needs well-heeled families paying the full sticker price to boost their coffers. Any college where this is less than 40%, like Wake Forest (34%) receives full credit, but colleges like Ohio’s Oberlin College or Denison University, where 85% and 99% of incoming freshmen receive aid, are penalized.
9. Instruction Expenses Per FTE (7.5%): This measures how much schools actually spend on educating each student. A higher amount reflects a college able to invest in its core purpose. This year, Washington University in St. Louis wins top honors with $140,000 spent per student, with Stanford coming in second at $115,000 per student. Meanwhile the largest Ivy League in terms of students, Cornell University, is spending $31,000 per student on instruction annually.
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