Want to know if your school is at risk financially? The Hechinger Report offers a college Financial Fitness Tracker, a searchable database of colleges showing their overall financial health based on a series of metrics. Their analysis shows that even before the pandemic hit, hundreds of colleges were experiencing financial distress. They cited several factors behind this:
- A smaller population of enrolled students. In 2008, total college enrollment was over 18 million. By 2018, that number had dropped to 16.6 million.
- Declines in state funding. Nationwide state funding in 2018 was 13% lower than in 2008, prior to the Great Recession.
- Endowments decreasing relative to cost. Endowments are a key piece of funding for many schools, not just the Ivy Leagues. Unfortunately, many schools with smaller endowments have recently found themselves needing to dip into principal to fund operations.
- Declines in tuition revenue compared with a decade ago. Nearly 30% of four-year schools bring in less revenue per student today than they did in 2008.
When a college folds, its students bear the brunt of the consequences, with many ultimately not completing their degrees due to credits not transferring or loss of financial aid. So add the Financial Fitness Tracker to your college evaluation toolkit!