The Financial Strategy & Operations Door holds briefing papers dealing with forecast models, business policies and processes, auditing, budgets, communications, financial equilibrium, and other topics.
This simple budget equation captures the major factors that drive the on-going financial condition at most private colleges and universities. The conundrum for the president, chief financial officers, and other chief administrators is the degree to which they do or do...
by Michael Townsley and Jack Corby College’s chief financial officers may be facing the greatest budget uncertainty in their lives: shrinking student markets due to the looming demographic cliff, potential deep cuts in federal and state student aid, and major changes...
Trump’s ‘Big Beautiful Bill’ includes a provision that the federal government will not provide federal aid for bachelor degree programs that fail to produce incomes for graduates that do not exceed the income of a high school graduate. When students in an academic...
During a period of deep financial distress, a president has many options to reduce the gap between revenue and expenses, while increasing cash reserves. The problem is that revenue options take too long to take effect to help the college. The quickest way to slow the...
Colleges chief financial officers may be facing the greatest budget uncertainty in their lives. Here is a partial list of these uncertainties are: Demographic Cliff – student markets will start to shrink dramatically in 2026; Pell Grants – could see a potential loss...
A recent article in Deep Thoughts on Higher Education listed thirty colleges and universities that closed in 2024. We applied our Vulnerability Gauge Model to the list to assess their financial risk. Only nineteen of the private four-year colleges were used in the...
Colleges sometimes miss the ‘tells’ that indicate an increasing risk of a major financial crisis. Our experience has found that they are six critical ‘tells’ that a college should carefully monitor. You can find more information about this subject in TIPS on College...
Introduction For the past decade, our colleagues and columnists have remorsefully muttered about friends in terminally ill colleges. Now, we know “for whom the bell tolls.” As more old colleges are thrown on the death cart, other small colleges only wait and wonder if...
Michael Townsley, Ph.D. Senior Associate Stevens Strategy Private colleges and universities are encountering unprecedented levels of financial stress that may even exceed the financial problems caused by the Great Depression in the 1930s. According to the Hechinger...
Pricing Power and Private Colleges and Universities As of the first week of May 2024, Chart 1 shows that twenty private colleges have closed with a simple factorial estimating that sixty will close. The sharp exponential growth for 2024 does not bode well for many...
Michael Townsley, Ph.D. March 31, 2024 Introduction For the past decade, our colleagues and columnists have remorsefully muttered about friends in terminally ill colleges. Now, we know “for whom the bell tolls.” As more old colleges are thrown on the death cart, other...
U.S. Department of Education (DOE), credit rating agencies, banks, regional accrediting commissions, and boards of trustees want assurance of financial viability from colleges and universities. Different organizations have devised and adopted metrics[1] that they...
Chief financial officers (CFO) are gatekeepers for the financial resources that fund the mission of the institution. CFOs are more than a necessary evil to keep the money straight. They have a keystone role in the institution because their education, experience, and...
Every college president faces the same challenge of figuring out what to do with the limited resources that they have available. Usually, scarce resources are defined in terms of money…
Private commuter colleges are a rare breed in higher education. They operate like a community college but offer undergraduate and graduate degrees. These colleges typically operate with multiple sites, tuition prices, and academic periods. They are fast-paced and...
A CFO’s contribution to the mission of an institution – building and sustaining its financial viability - depends upon the relationships that she/he has with salient positions within the institution. Positions are salient when they are directly involved in budgetary...
It is not uncommon in higher education that an institution should establish a balanced annual budget as its main strategic financial goal. There are several significant reasons why the “single year net income goal” is both…
In 1986, more than 900 independent colleges derived at least 75 percent of their revenue from students, according to a 1989 study by Minter and Associates. This figure has probably changed little in the past eight years. Too often, enrollment-dependent independent...