The Financial Resilience of Independent Colleges and Universities

Cic TIAA Institute Report

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Each time a liberal arts college closes its doors, commentators predict the imminent demise of small private institutions. But does the data back up this belief?

Summary

The challenges faced by independent colleges and universities are well-documented. From rising operating costs to increased market competition to demographic shifts, numerous societal and economic factors have led to questions about the viability of small liberal arts institutions. Key gauges of their financial health, however, tell a different story.

Key Insights

The large majority of small and midsized private colleges appear financially secure.
Key financial indicators at independent institutions have been on an upward trajectory since the 2008-2009 recession.
CIC sees strong leadership combined with multiple institutional factors as key to financial stability.

An analysis of data spanning 14 years (2000–2014) shows that a large majority (88 percent) of small and mid-sized private colleges and universities have maintained or improved their financial standing, no small feat through the 2007–2009 recession.

Methodology

The researchers analyzed 14 years (2001–2014) of financial data from 559 private independent colleges and universities, including ratios pertaining to resource sufficiency, operating results, financial assets and debt management. They also utilized the overall Composite Financial Index to measure financial health in different contexts.