<p>Wow, banks credit crunch again. "Cap on student loan guarantees inevitable, tightening of credit, collapse in price of tuition leading in colleges going out of business." Will your college survive?</p>
<p>Article:</p>
<p>Video:</p>
<p>He isn’t saying anything others haven’t said. I’m not sure why this is getting press, other than the fact that he is a popular dude with lots of money.</p>
<p>@keismom I didn’t hear that colleges would be closing their doors. How many students weigh a schools balance sheet before making an investment?</p>
<p>The closing doors part is speculation on Cuban’s part … but of course schools that are too dependent on tuition may have trouble staying open if loans are hard for students to get. That is why schools are working hard to become less dependent on tuition revenue. It’s easier said than done, but it is a goal of many schools.</p>
<p>@kelsmom On behalf of your constituents create a method to weigh this risk for those making decisions now for the near term. Touch base with your peers on this subject and share with us how to begin offset this risk. Those who made the decision to buy homes at inflated cost just before the housing bubble burst did not understand the risk. Likewise, it can be expected students who select colleges that are dependent on inflated tuition revenues and uncapped loans do not understand how to measure risk or credit crunch. </p>
<p>Also what degrees are risk tolerant? Are there some disciplines to avoid if you can’t finance a post graduate education because of a credit crunch and supply outstripping demand of available seats, It is already extremely tough for BS/MD program.</p>
<p>@Sohoist - you can check the size of a school’s endowment, particularly its endowment to student ratio. Magazines like Forbes rate colleges by their financial soundness. </p>
<p>It might take some work to wade through, but all financial information is reported by colleges and universities to the federal government annually. You can find it here: <a href=“Use the Data”>http://nces.ed.gov/ipeds/datacenter/login.aspx</a>. You can search to find the amount of tuition income and compare that to the total expenses if you want. I think there may be other ways to find tuition as a percentage of operating costs, too, that could be found through some internet searching. I don’t know that this is actually a predictor of how financially stable a school is, though. I know that it is one important factor, but I am sure there is a lot more involved. I think it would be difficult to predict which schools might close if the bubble bursts, if any will … it is a possibility, but not a foregone conclusion. History is a good teacher, and perhaps looking into schools that have closed to get an understanding of what led to their closures would be a good starting point … that understanding could be used when considering a particular school in terms of long term viability.</p>
<p>Or just look at Forbes. They have a list of schools graded by financial soundness.</p>
<p>Forbes and U.S. News were unsatisfactory. NCES was having to enter each school and data field. </p>
<p>@keismom This table is what I was looking for: </p>
<p><a href=“http://www.nacubo.org/Documents/research/2011_NCSE_Public_Tables_Endowment_Market_Values_Final_January_17_2012.pdf”>Page not Found;
@Sohoist How does one make sense of these amounts? Is there some boundary that universities/colleges should not fall below? How would I know if their endowment was relatively healthy or not?
^^^
It’s hard.
For publics, the size of the endowment will not give you an indication that a school is healthy or not…they have a state to fall back on…and state support either in direct cash or in-kind benefits.
I do wonder how so many of these rather smallish rather unknown privates will be able to continue. I guess many will rely on commuters who can cobble money together without also having to pay for room and board?
Honestly I don’t see how they would be able to survive to be honest. A lot of these schools have tuition costs in the same league as Harvard and Sarah Lawrence, but those schools have prestige and fame as well that justifies it for some families. Are there too many people who will want to commute to Obscure 4th-Tier LAC #1,548 when they can commute to a state university for 1/4th of the price, or live on campus at a state university for 1/3rd the price? There might be, but I’m not sure.
I think some of these pricey lowish-tier schools are using fake pricing. They’ve set their prices to high (near/same as top schools), but then they flatter most/all applicants with $10k+ merit awards.
We’ve seen postings here on CC. Parents/students posting that Small Largely-Unknown Private gave their 2.8 GPA/ACT 21 student a $10k+ merit award. They’re excited/flattered…and likely don’t realize that merit for academic achievement was not involved in the least.
Schools that use this marketing method know that enough people won’t figure out that these discounts are given to every student. Those awards are given for breathing. They’re not applauding a modest-stats student.
Believe me, there are people who will choose a school, even if it costs more than a better school if their flattered with merit. Some people just can’t say no to a merit award. They don’t realize that the “real price” is the net cost after merit.