Five Great Questions to Ask About a Private College’s Financial Viability

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10. Five Great Questions to Ask About
    a Private College’s Financial Viability 
    
    
    
    
    
    
    Note: There is no harm if your college representative is unable to answer these questions. Many private colleges are financially strong and can demonstrate that directly or indirectly. These questions provide you with a basis with which to make a more informed decision
    about the financial viability of a college.
    
    
    
    
    Questions are offered in the top section.  Discussion on each question is in the bottom section
    
    
    Questions To Ask
    
    
    Question 1:  We are aware that private colleges are facing financial challenges.  On a scale of 1 to 10, (with 10 being a really high risk - and 0 being no risk), how likely is it that your college will be financially viable for a student starting in 2019 and finishing 4 years later? 
     
    Question 2: Was your tuition discount rate above 50% for the last class you admitted? 
      
     
    Question 3: How do you communicate financial concerns to your students, faculty, staff, community, and others? 
    
     
    Question 4: For the last two years, has your revenue been greater than your expenses? 
    
     
    Question 5: How long has your chief financial officer been at the college? 
    Question 6:  What is your college’s long-term debt?  How does your leadership plan on paying that down?
    
    
    
    
    Discussion of Questions
    Question 1:  We are aware that private colleges are facing financial challenges.  On a scale of 1 to 10, (with 10 being a really high risk - and 0 being no risk), how likely is it that your college will be financially viable for a student starting in 2019 and finishing 4 years later? 
    
    
    Discussion:  This is an easy way to let a college representative know that you are interested in their finances – just like they are interested in your finances.
     
    
    
    Question 2: Was your tuition discount rate above 50% for the last class you admitted? 
    
    Discussion:  Generally-accepted higher education standards acknowledge that any tuition discount above 50% substantially can negatively impacts a college’s financial viability.  It is important to balance the benefit of the discount (known as an unfunded scholarship) offered to your student against the impact of similar discounts to other students.  These tuition discounts make it more difficult for a college to generate the revenue needed to remain viable.
    
     
    Question 3: How do you communicate financial concerns to your students, faculty, staff, community, and others? 
    Discussion:  It is a difficult scenario for private colleges leaders to convey serious financial challenges to their students, faculty, and staff.  Such bad information can perpetuate itself to more quickly lead to the financial downfall of a college.
    
     
    Question 4: For the last two years, has your revenue been greater than your expenses? 
    Discussion:  A simple question.  It may require your college representative to follow up with you.  Access to this financial information is available through CollegeViability.com
    
     
    Question 5: How long has your chief financial officer been at the college? 
     Discussion:  A warning sign of financial challenges can be turnover of a chief financial officer.  They can be the single resource in a private college that recognizes that an institution may not be financially viable.
    
    
    
    
    Question 6:  What is your college’s long-term debt?  How does your leadership plan on paying that down?
    Discussion:  A simple question.  It may require your college representative to follow up with you.  Access to this financial information is available through CollegeViability.com
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