‘Real Financial Trouble’: One-Third of Colleges & Universities Going Broke
Almost one-third of colleges and universities in the U.S. are in “real financial trouble,” according to a new study from Bain & Company.
“Institutions have more liabilities, higher debt service and increasing expense without the revenue or the cash reserves to back them up,” the report states.
Simply put, several colleges and universities are facing “liquidity crises” because they spend far more than they bring in, according to the study’s authors
Jeff Denneen, a partner at Bain, and
Tom Dretler, an executive with Sterling Partners.
“The reason for the crisis, they say, is due to the equity ratio being down, the expense ratio rising and the lack of endowments for schools,” CBS Atlanta reports. “The economic crisis didn’t help matters for higher education as many families have been unable to afford to send their kids to college. Student loan debt has also topped $1 trillion in the U.S.”
“Regardless of whether or not families are willing to pay, they are no longer able to foot the ever-increasing bill, and state and federal sources can no longer make up the difference,” the Bain & Company report notes.
What needs to happen if these colleges want to be on financially stable footing again?
“Universities simply cannot afford to increase costs in nonstrategic areas and take on more debt, if they want to survive. It is imperative that universities become much more focused on creating value from their core,” the report states.
Translation: Run your business like a business.
“That will require having a clear strategy, streamlined operations, a strong financial foundation, trust and accountability, and a willingness to invest only in innovations that truly create value for the institution,” the report adds.
Front page photo source: The Associated Press.
- Why Were DHS Agents Seemingly Monitoring Multiple Tea Party IRS Protests Across the Country on Tuesday? 440 Comments
- Confusion Erupts in IRS Hearing After Lois Lerner Tries to Plead the 5th — Watch It All Unfold 421 Comments
- Shock Video Surfaces: Meat Cleaver-Wielding Man Shouts ‘You People Will Never Be Safe!’ Moments After Gruesome London Attack 387 Comments
- CNN’s Wolf Blitzer Has Awkward Moment With Okla. Tornado Survivor After Asking If She ‘Thanked the Lord’ 320 Comments
- More Than $1 Million Raised Through Mercury One for Oklahoma Tornado Relief 266 Comments
- ‘Unbelievable’: Apparent Thief Leaves $140 & Apology Note on Family’s Doorstep — Find Out Why Read More
- Anti-Gay Bias or Fair Punishment? New Details Emerge About High School Student’s Lesbian Relationship With a Minor 151 Comments
- Comedian’s New Anti-Muhammad Video Excoriates Islamic Prophet, Juxtaposes Him with Jesus: ‘Very Wrong and Twisted’ 132 Comments
- Teacher Admits She ‘Prayed Out Loud’ During Violent Tornado: ‘I Did the Teacher Thing that We’re Probably Not Supposed to Do’ 124 Comments
- Farrakhan Talks of ‘Satanic Jews’ and ‘Synagogue of Satan’ at Detroit Church Speech — but Wait Until You Hear Who Was in Attendance 239 Comments
- Here are the 7 Most Explosive & Informative Moments from Today’s IRS Hearing Read More
- Foreign Banks Operating on U.S. Soil Have Just Set a Record Read More
- The Tense Exchange Between Rep. Trey Gowdy and the Former IRS Head You’ve Been Waiting for…and It Doesn’t Disappoint 250 Comments
- Report: No IRS Workers Have Been Disciplined & Union Says It Hasn’t Been Contacted on Personnel Read More
- Ex-Cincinnati IRS Manager: This Was Not the Work of ‘Low-Level’ Employees Read More
- The Incredible Role Facebook Played in the Aftermath of Devastating Okla. Tornado Read More
- Tech Company Demonstrates Remote Disabling of a ‘Smart Gun’ 115 Comments
- Meet the Blind Man Nicknamed ‘Midnight Gunslinger’ Who Has 80% Shot Accuracy Read More
- How a $4.5 Million Network of 181 Sirens Helped Save Lives in Oklahoma Twister Read More
- See the Record-Setting Python a Man Caught With His Bare Hands (and Guess How Much It Weighed) Read More
- AP Source: Coach K returning to US men's team
- Jury deciding Arias' sentence adjourns for day
- FBI: Arrest made in Wash. ricin letter scare
- Family Ties: Jarrett, Petty enter NASCAR hall
- Top AEG lawyer referred to Jackson as 'freak'
- In Arias trial, TV cameras never far behind
- Float driver says train seemed still before crash
- WW II photo-documentarian Wayne Miller dies at 94