Midwest Chick's Place

 To be fair, many of them were on the edge before Covid.  And actually, per the article here, government cheese Covid dollars may keep some of them afloat longer than they may have survived without those bucks anyway.

To explain a little bit:  most colleges and universities have what’s called a discount rate–it’s what students actually pay vs the advertised sticker price.  That’s why smaller colleges like international or graduate students so much–they are generally paying full sticker.

At one institution, they were really debating to change their discount rate from 33% to 34%.  A university is considered to be on the edge of solvent with a 51% rate.  I know some smaller institutions that are at 68-69% and have been for years.  They’ve been trying every game in the book to stay open.  They outsourced pre-Covid and then used Covid as an excuse to reorg–getting rid of programs and older, higher paid staff.

The federal Department of Education puts out what they call a Financial Responsibility Composite Score for all institutions.  Their latest data is from 2018-2019–it’ll be interesting to see when it updates.  I’m going to say that their algorithm needs some work.  I know of one college that had a score of 2.2 that went under (anything over 1.5 to 3.0 is supposed to be good)–they had assets that counted in the positive score but weren’t assets they could actually use or sell, so when it came down to it…  They also had a butt-ton of deferred maintenance, etc.  

For 2018-19, there are 119 private not for profit schools with a score less than 1.5–about 7.5% of the total private not for profit schools on the list.

Not looking good.