NAICU - Publication of Financial Responsibility Scores Creates Unfair Fiscal Picture

Even though the 2012 NAICU Annual Meeting is history, you can continue to benefit and learn from the many presentations and speeches that were offered, and are now available on line.

New College Affordability Measures

Initiatives being launched in 2012-13 to help keep students' and families' out-of-pocket costs as low as possible. Tuition cuts and freezes, three-year degree programs, and more. Complete list.

NAICU Statement on President Obama's Higher Ed Proposals

NAICU President David Warren commends the president's commitment to student assistance, and calls for avoiding unintended consequences for students. More

Net Tuition Price Falls 4.1% at Private Colleges

Inflation-adjusted net tuition and fees at private colleges actually dropped 4.1 percent in the last five years, according to a recent College Board report. More

News Search of the Week

Here's what the media are saying about:

Higher Education Reform/Innovation

. . . or visit our full search-by-topic list to browse news and commentary on any of 80+ higher ed topics.

Banner images provided by Creighton University.

Home

News Room

Publication of Financial Responsibility Scores Creates Unfair Fiscal Picture

NAICU Washington Update

September 2, 2010

Recently, 150 non-profit, private colleges around the country found themselves the subject of unexpected, and often unfairly negative, media coverage of their financial situations when the Chronicle of Higher Education published an unofficial list from the Department of Education of colleges scoring below 1.5 on a 3 point scale meant to measure basic fiscal health.

The list of schools that fell below 1.5 had grown unusually large this year - partly because of the economic downturn, but also because of an unusual federal formula that, among other problems, counts endowment losses as if they were "actual" instead of "unrealized" losses.

NAICU president David Warren alerted members to the possible public relations implications of this story and also issued a statement to media intended to allay fears about institutions' fiscal health. Warren's comments appeared widely in regional media throughout the U.S.

In addition, since last spring NAICU has been working with the National Association of College and University Business Officers and the Association of Jesuit Colleges and Universities in encouraging the Department of Education to review and update their current assessment formula. Part of the challenge facing the Department is that the current system is based on legislation written in 1992, and hasn't been updated to reflect more recent accounting changes or practical experience with the 18-year-old methodology.

The publication of the list, combined with the ongoing economic downturn, has brought new urgency to the need for the Department to update the formula, and put forth a more transparent process for appeal. Currently, some colleges have been able to appeal faulty calculations, while others have been told by regional offices that no such recalculation is possible.

NAICU is also working with individual colleges that have contacted the association, and is analyzing members' scores from past years. Many institutions that received unacceptable scores this year had high scores the prior two years. Many others are reporting that their scores are already back into a much more favorable range, and that they will be well above the 1.5 level when the next financial snapshot is taken. Our intent is that the next snapshot will be much more carefully focused.

Contact

Maureen Budetti
maureen@naicu.edu