A gift to the data-obsessed

[Anonymous]

Bain recently released a report on the decaying finances of colleges and universities, a slow-moving train wreck I've been watching with great interest for a number of years. With the crashing of endowments, over $1 trillion of total student loans outstanding, and a reluctance of schools to re-engineer themselves, it will be fascinating to see how this evolves over the next few years.

Here's a link to the report.

http://www.bain.com/Images/BAIN_BRIEF_The_financially_sustainable_university.pdf

and

http://www.thesustainableuniversity.com/

The latter lets you look up your favorite school to check on endowment per student and recent trends on expense growth.

[Anonymous]

So I looked up DC's college on the sustainableuniversity.com. DC's college shows an increase in expense ratio of 1% and a decrease in equity ratio of -1%. The endowment per FTE is roughly $250,000.

I understand the endowment per FTE but don't know what the expense and equity stuff means. Could you explain it?

And, are you the "thanks for the entertainment" guy perchance?

[Anonymous]

Anonymous wrote:So I looked up DC's college on the sustainableuniversity.com. DC's college shows an increase in expense ratio of 1% and a decrease in equity ratio of -1%. The endowment per FTE is roughly $250,000.

I understand the endowment per FTE but don't know what the expense and equity stuff means. Could you explain it?

And, are you the "thanks for the entertainment" guy perchance?

equity ratio is a comparison of an institution's asset to liabilities. some colleges are heavy users of debt financing, both private debt and accessing municipal bonds for a lower rate.

expense ratio looks at annual costs v revenue (not just tuition, particularly for research institutions)

yes i am

[Anonymous]

Thank you.