Thursday, February 27, 2014

A Deeper Dive on Financial Health

Federal Student Aid, a division of the Department of Education, releases its list of colleges and universities based on Financial Responsibility (sometimes called Financial Health, which I think is more accurate.)  In general, to continue to be eligible to award your students federal financial aid, you need a score of 1.5 or above (on a three-point scale.)  The scores go down to -1.

Most presentations of the data are pretty static: A table with the data, for instance.  But I think there is a bigger story here: Where are colleges in trouble located? How many are not-for-profit? How many students do they enroll? What about Pell grant recipients and students of color? Do are they more likely to enroll in colleges with failing financial health?

So I merged some 2011 IPEDS data into the mix.  Some of the results surprise me; neither Harvard nor MIT are a 3, for instance; the Franciscan School of Theology in California, however, is.  Results like this have caused some consternation among accountants, CFOs and their professional organizations, causing them to question whether there is any value at all to these rankings.

What do you think?  There are several views of the data here, including one that allows you to look at individual institutions.  For viewing, I've rolled all the scores into 1/2 point bands, and color-coded them. Enjoy.