Not a bad idea to check a school’s financial health as an additional criteria when considering applying:
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Completely agree. I’m so sick of folks calculating the endowment per student and believing that says everything they need to know about a school. These are enormously complicated institutions with different missions, different sources of income and different priorities. So, it doesn’t surprise me that the T75, or so colleges that receive the most attention on this board - absent something extraordinary going on - should all receive pretty much the same grade.
I have no idea what’s behind the paywall, but I seem to recall some head-scratching two years ago when there were some surprising results; it’s both reassuring and a little puzzling how individual colleges can spring back from a B+ to an A+. I suspect it has something to do with outstanding debt/fund-raising. But it would be nice to know for sure.
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Hmmmm… it wasn’t paywalled for me. Not sure how to address that.
Oh, not the listings. The accompanying article was.
Same for me
This is really what makes this hard to use from my perspective. Somewhere there’s a random metric that impacts the financial score per Forbes, but doesn’t seem to consider what the college is doing with the money or if there’s something else going on that will help the school “financially recover” the next year. Pretty maddening ranking (like most rankings!)
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Good points. Was surprised to see Goucher, which had struggled a few years ago, listed as an A+. All these “rankings” are clickbait, but my point was that students/families should consider the financial health of a school as an additional factor when choosing where to apply or enroll.
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Credit ratings are probably a better indicator.
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Regarding ratings changes from prior years, Forbes notes a methodology revision: “For 2026, Forbes has revamped its analysis, thanks to novel data from Perspective Data Science, which zeroes in on colleges’ true liquidity.”
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Sounds like perhaps they’re separating out unrestricted endowment funds from restricted. This could make a lot of sense, but I also suspect that for colleges that are truly under financial pressure, there’s likely some push by admin to get those restricted funds to be unrestricted or at least less restricted.
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This would explain a lot of Forbes’ formulations. For example, I asked AI what were Amherst and Wesleyan’s respective endowment “liquidity” and got similar figures despite Amherst’s 2:1 endowment advantage. Amherst, according to its own annual report, has approximately $521 million in liquidity https://www.amherst.edu/system/files/Moody’s%20-%20Credit%20Opinion%20-%202024-06-27.pdf
whereas Wesleyan has $440 million in “unrestricted funds” according to its FY25 annual report. https://www.wesleyan.edu/finance/annualreporting/2024%20-%202025%20Annual%20Financial%20Statements1.pdf (p.18)
A much narrower difference in value.
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I would typically interpret financial health as being about whether an institution is doing a good job managing its expenditures so as to stay within its financial means.
I would usually think of the question of what amount of financial means the institution had in the first place, and by implication what it could sustainably spend, as being a different sort of question.
And then of course a third sort of question is whether the institution is spending a lot specifically in the ways that matter to me, which could be quite different from what mattered to someone else.
Which is why the restricted/unrestricted fund data point becomes so interesting. Without a magnifying glass, you never know just what those restricted funds are going to.
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Financial health can make a big difference when they issue debt to finance school projects.
In 2016, the University of Kansas bypassed the Kansas state legislature by using the Wisconsin-based Public Finance Authority (PFA) to issue nearly $327 million in bonds.
There are many schools who seem to be having financial difficulties. University of Oregon is projecting a $65 million budget gap.
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“One of the key metrics Perspective Data Science focuses on, especially for middling tuition dependent colleges, is called UNAEP or Unrestricted Net Assets Exclusive of Plant. It’s a measure of liquidity designed to show how much money a college actually has available each year to cover its expenses by removing illiquid items like dorms or academic buildings net of the debt associated with them. These assets are largely independent of donor funds, which ordinarily cannot be spent on operations because they are typically earmarked for specific academic programs. Forbes analysis using three years of Hendricks data, reveals that 192 private colleges are currently operating with negative UNAEPs. Many are essentially insolvent, drawing down credit or dipping into their donor restricted funds in order to make payroll and keep the lights on.”
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Yep. And in the end, this is mostly about results, right? Like, rather than try to guess from a financial report if the college is able to afford interesting upper-level Classics courses, you should look up their Classics department. Will it provide you with enough need aid? Run the NPC. And so on.
Of course it can also make sense to want to go to a generally well-resourced institution such that you can go in without knowing what exactly you will end up studying and doing, and be confident it will support a wide variety of possible paths.
But this is not a short list. Many public universities, and not in fact just at the flagship level, can fit that description. Lots of LACs. Lots of Jesuit colleges. Lots of not-the-most-famous-few-private-research-universities in general.
And I also don’t mind checking their financial health to make sure you are likely to get what you are expecting. But again, I think it is right there is a long list of colleges which currently have a sustainable plan, it isn’t just a few.
And although that is only a fraction of the overall list, that doesn’t mean you shouldn’t pay any attention! At a minimum, before applying to colleges on their list that actually got bad grades, I would do some followup to see what is actually being reported specifically about that college.
No one is suggesting that. This goes back to an old exchange we had regarding the use of the word, heuristics (I believe you gave me “brownie points” for it.) Yet, here we are again. It’s really about creating short cuts for something fairly complex and comprehensive. The financial health of a residential college.
Just to be clear, I wasn’t criticizing the idea of looking at financial health. I just think it has a very specific purpose, albeit an important one.
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