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College and University Discussion
Reply to "Good school with weak financials? "
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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]One of the possibilities for my kid scores a D on this list - https://www.forbes.com/sites/emmawhitford/2022/06/09/the-strongest-and-weakest-colleges-in-america---behind-forbes-2022-financial-grades/ I am worried. Would you be? [/quote] Yes many good schools are struggling and will face tougher conditions in 2026 when the 18 yr old population starts declining. Covid was also expensive for them. I filtered out schools with a C or lower. Def check the bond rating. I think of it as an investment and want the place to be around in 10 years. I also noticed a lot of schools that give large merit to attract enrollment have lower Financial grades. It is not sustainable.[/quote] I agree that good schools are struggling. But I wouldn't trust Forbes' methodology. For instance, because Forbes focuses so much on change, a school that is well-endowed can go down quickly on their grades. Do you really think University of Richmond should be on the list of "Dunces" because its grade went down among the most on their metrics ? That school has a 3.2BILLION endowment for only 4350 students. That is crazy rich for a small school. But they must have recently done something that Forbes thinks is a sign of financial weakness. I don't really trust Forbes' ranking as a reliable source for this. Moody's actual bond rating, sure.[/quote] Yeah, I don't know that Forbes is the most reliable. Another source is from the US Government -- financial responsibility scores at Studentaid.gov. You can download a big list https://studentaid.gov/data-center/school/composite-scores "One of many standards, which the Department utilizes to gauge the financial responsibility of an institution, is a composite of three ratios derived from an institution's audited financial statements. The three ratios are a primary reserve ratio, an equity ratio, and a net income ratio. These ratios gauge the fundamental elements of the financial health of an institution, not the educational quality of an institution. The composite score reflects the overall relative financial health of institutions along a scale from negative 1.0 to positive 3.0. A score greater than or equal to 1.5 indicates the institution is considered financially responsible."[/quote]
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