What Does An 18-Month Closure Warning Look Like for Struggling Private Colleges?

What Does An 18-Month Closure Warning Look Like for Struggling Private Colleges?

In response, the Massachusetts Department of Higher Education convened a working group to study the issue. Its recommendations, which were released in a report earlier this year, centered around a new system for screening nonprofit colleges’ finances and warning students at least 18 months before a college is at risk of closing.

The group hopes the recommendations will be implemented by this fall, but details of the plan still need to be ironed out. The group did not advise which entity should actually carry out the screenings, what metrics would be used to determine which schools need closer monitoring, and how an 18-month warning would be put into practice.

College Viability Commentary: 

There is a difficult and delicate balance needed to warn students, families, faculty, staff, and communities.  While financial data is available on private colleges, it is not timely - nor easy to read and understand.  

A good first step would be to require private colleges to post their audited financial statements no more than 90 days after then end of each fiscal year.  Currently, this information is not publicly available until 12-16 months after the end of a fiscal year.   Even then, it is posted in a complex data base from the National Center for Education Statistics.

A system that relied on private initiatives to identify financially troubled colleges would serve as a better approach.  College leaders would know that their financials - and all of their competitor's financial data would be available more timely and more readable.

Sources like CollegeViability.com are available to analyze and simplify the financials.  

Source:  Metro West Daily News

The first two paragraphs above are from Brianna McKinley.