July 27, 2013: Do Our Assets Look Too Big?  Good!

Forbes released this week a report on the financial stability of 925 private not-for-profit colleges, assigning each a letter grade, much like a college course.  Its cover story talks about the desperate ways many institutions do business, strategies that lead to financial instability.  Its explanation of the financial grading rubric is a little over my head, and I'm sure only a night's worth of alcohol could dumb me down enough to buy the logic of "instruction expenses per FTE," an implication that the more money spent in this area means more stability.

I am interested in the roll call, the list of the schools from A to D-, which you can find in two separate tables:

Those who earned an A or B (presumption being that these schools are financially sound

Those who earned a C or D (presumption being that these schools are financially weak)

Seeing I have spent my entire professional career in Michigan, and thus know a lot about the institutions, I am interested in how Michigan private colleges fare.

"A" grade schools include Kalamazoo College.  Yes, that is it. Just Kalamazoo College, city that is home also of the Kalamazoo promise, where some anonymous benefactor left money to ensure every Kalamazoo city high school student could be scholarshipped to go to college.  You have to wonder if there is a relationship. 

(By the way, if I were to do this also with Indiana schools, some of which I know well, Notre Dame is in here, so no surprise.  7th financially stable. I don't think we have to question why it is stable, by God.)

"B" grade schools  include Alma College, Albion College, Hope College, Northwood University, College for Creative Studies, and Madonna University (the last two are in the Detroit area; the city may be bankrupt, but at least some of the local colleges aren't).

"C" grade schools include Andrews University, Kettering University, Calvin College, Siena Heights University, Davenport University, Lawrence Technical University, Aquinas College, Cornerstone University, University of Detroit Mercy, Cleary University, Olivet College.  

(Notre Dame may be financially stable, but many of these are other faith-based schools, so they might need to hound their faithful more at collection plate time . . .  or start a football program and pray it grows to be larger than life).

"D" grade schools include Spring Arbor University, Adrian College, Concordia University.  

So, that's 7 schools doing well; 14 schools suffering in mediocrity, at least according to Forbes.  For the record, and as a reminder, this is a ranking only of private schools.  I have not withheld a grade for Southwestern Michigan College, which as a community college, wouldn't have qualified for the list (I suspect Forbes struggles with how to account for appropriations; Lord knows, all of us in the public sector do).

This is all rather eye-opening. I am shocked by the showing of Grand Rapids schools, a city that prides itself on being the hub of Michigan academia (it also houses branches of several of the state schools and one of the biggest community colleges in the state). Is all of the competition ultimately hurting?  Is there not enough money, surprising given that the surrounding area is reasonably well off, especially by Michigan standards, that can come in via foundations and scholarships? 

My other observation is that Northwood University is the only relatively "new" school (founded anytime after World War II) that is doing well.  One would like to say longetivity matters, but tell that to Spring Arbor University, 140 years young.  

I suppose all of the schools in the C and D range don't need to fret too much.  How many people still read Forbes? Heck, this story is two weeks old and I just found it, so it's not like the local media have picked it up, ran with it, and asked crucial questions.  But, why would you do that when you can devote crucial space to LeBron James picking an Eminem song for NBA 2K14?  That's the real shame, Shady!