How financially healthy is Tulane?

northwesty
Wed, 29 Apr 2015 16:16:59 +0000

Tulane is in pretty good shape. Moody’s upgraded its bond rating in February.

TU’s operating budget is balanced; cash flow positive actually if you back out the non-cash depreciation expense. Revenue has increased year over year. The deficit comes entirely from the capital spending budget. That’s not nearly as concerning as a school that runs an annual shortfall on its annual operations.

A persistent operating budget shortfall is what can lead to the death spiral – declining tuition revenue, depleting long term endowment assets to pay current bills, declining enrollment, increasing tuition discounting to fill seats, lower rankings, lower admissions selectivity, etc. etc. Tulane has none of that.

Former Prez Cowen was definitely an aggressive “if you build it they will come” leader, made more so by the need to repair and rebound from Katrina. So I’m not surprised that the new Prez has to be focused less on empire building and more on fund raising and cost controls.