Assessing a College’s Financial Health After Covid‑19

Feb 25, 2021 / By Lynn O’Shaughnessy
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After a year-long pandemic, clients planning to send their kids to college may worry about whether certain schools could be in financial trouble. Colleges will not be transparent about their financial viability, but these resources can help assess the situation.

Especially during the pandemic, parents and students are understandably worried about whether schools that interest them could be in financial trouble. What they need is transparency from colleges about their financial viability, but they aren’t getting that.

So how do parents get a handle on whether a school is in good financial shape or not?

In the past, I have shared one resource—Forbes Financial Health Grades. Today I am sharing some new resources that attempt to divine how financially secure a higher-ed institution is. Here are the resources that you should consider checking out for your clients.

1. Hechinger Report Financial Fitness Tracker

Hechinger Report, a higher-ed nonprofit news operation, recently released its Financial Fitness Tracker. The tracker shares the results of its financial stability analysis of 2,662 private and public four-year and two-year colleges and universities by examining key metrics including enrollment, tuition revenue, public funding and endowment health.

Among the information you will get for each school is a chart (see Figure 1 below) that breaks down an institution’s trends for enrollment, retention, average tuition and ratio of endowment and expenses.

Figure 1: Sample Chart From Hechinger Report Financial Fitness Tracker

Source: Hechinger Report

2. Edmit College Financial Health Center

College Financial Health Center from Edmit, an admissions resource for families, is another tool to check the financial viability of 937 private colleges and universities. It shares a school’s endowment and its endowment per student as well as its Forbes Financial Health Grade and its financial responsibility score from the U.S. Department of Education. Edmit is also a handy tool for researching important statistics about individual schools including:

  • Average merit scholarships
  • Percentage receiving merit scholarships
  • Average net price
  • Average percentage of need met
  • Percent receiving aid

3. Scott Galloway’s value vs. vulnerability spreadsheet

Scott Galloway, a serial entrepreneur and a larger-than-life marketing professor at New York University, has been a thorn in the side of the higher-ed industry for years. Undeterred by conventional wisdom and sacred cows, Galloway doesn’t hold back with his opinions of the higher-ed industry. And it is an industry.

Galloway says a reckoning is coming with overpriced schools, bloated administrations and hidebound ways. Galloway received considerable press when he suggested in his recent higher-ed analysis that roughly 90 colleges could perish due to the pandemic.

Here is the link to his value vs. vulnerability spreadsheet on 442 undergraduate institutions. He gave each school two scores. The value-to-cost ratio seeks to quantify each school’s value relative to its tuition cost and the vulnerability score seeks to quantify a school’s vulnerability to Covid-19.

In his analysis, which you can find on his website, he places schools in four categories:

  • Thrive. Elite schools and those that offer strong value have an opportunity to emerge stronger as they consolidate the market, double down on exclusivity, and/or embrace big and small tech to increase the value via a decrease in cost per student.
  • Survive: Schools that will see demand destruction and lower revenue, but will be fine, as they have the brand equity, credential-to-cost ratio, and/or endowments to weather the storm.
  • Struggle: Tier-2 schools with one or more comorbidities, such as high admit rates (anemic waiting lists), high tuition or scant endowments.
  • Challenged: This last category Galloway had originally named “perish.” There was such a strong blowback to predicting that schools in this lowest category could disappear or merge that he changed the description to “Challenged.” He said this group has high admittance rates, high tuition, low endowments, dependence on international students and a weak brand equity.

In the following chart, you will see some of the schools that Galloway placed in each of the four categories:

Figure 2: Thrive, Survive, Struggle or Challenged?

Source: Scott Galloway

Sharing these tools with clients can help them develop a strategic picture of the options for their students. And there are alternate options as well, particularly in these uncertain times.

A Google alternative to a four-year degree

This fall Google announced it was launching career certificates that could substitute for a four-year college degree.

These certificates could represent a path for some college-age individuals—or adults who aren’t satisfied with their careers. I’ve been wondering if, especially during the pandemic, students who are interested in taking a gap year before attending a four-year college, might consider earning one of these certificates that take roughly six months to complete.

The Google courses, which are being offered online through Coursera, cost just $49 a month. The fee also provides access to resources that can help students with their job search and preparation for job interviews.

Grants and scholarships will be available for those who need it.

Kent Walker, Google’s SVP of Global Affairs, says the certificates will hold the same weight as a four-year degree in a related field. “In our own hiring,” Walker said, “we will now treat these new career certificates as the equivalent of a four-year degree for related roles.”

While Google says it will treat its certificates as the equivalent of a college degree, it makes sense to wonder how other employers would treat the certificate. Google, however, says it is committed to helping Google certificate holders get hired and can send information directly to employers.

IT Support Specialist was Google’s first certificate program. Sixty-one percent of enrollees have not had a four-year degree.

Google says that 80% of students in this certificate program in the U.S. reported a career impact within six months such as finding a new job, getting a raise, or starting a new business.

The median annual salary for IT support specialists is $54,760.

Google IT Automation With Python is the second certificate program now available.

Here are the ones that will be released soon:

  • Data analytics. Median annual wage: $66,000
  • User experience (UX) design. Median annual wage: $75,000
  • Project management. Median annual salary: $93,000

Lynn O’Shaughnessy is a nationally recognized college expert, higher education journalist, consultant, and speaker. She is also the leader of Horsesmouth’s Savvy College Planning program.


Mr. Galloways rankings are fatally flawed in 2 respects. First, he calculates a school's education score based only on money. What about the number of students that go on to PHD programs? What about adjusting for the mission of the school? My alma mater, Duke University, is great at training students for Law, Business, or Medical School (and is rated 2.92/3.00 ), but that's not the goal of Bard or Kenyon (1.23/3.00). Second, the Vulnerability score is the sum of only 2 factors: Endowment per Full Time Student (percentile) and Percentage of International Students (percentile). Why having more international students is considered a vulnerability is not explained. The fact is that many international students are attending classes remotely from their home country just fine.

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