You are here

Articles: Financial Services

Whether it’s purchasing textbooks every semester or meeting daily needs such as meals, snacks or health and beauty aids, students who find the right dining and retail stores on campus have a better college experience.

Many higher ed institutions are adding shops and brand-name eateries, as well as renovating bookstores to keep up with current technology trends.

At a time when the gulf between liberals and conservatives seems to be wider than ever, there is one topic about which they agree: the reasons for the rising cost of a college education. Why do colleges and universities keep raising tuition, asks Timothy Noah in The New Republic? Because they can. And Allysia Finley writes in the Wall Street Journal that colleges keep raising tuition because the government continues to increase subsidies to match the rising tuition.

For the first time, students are paying, on average, half or more of their tuition’s cost. (Click to enlarge graphic)

Subsidies for public higher ed institutions are the lowest in a decade—and for the first time, students are paying, on average, half or more of their tuition’s cost. Those are a few of the financial trends substantiated by a recent American Institutes for Research (AIR) study.

Credit Rating Rankings: Long-term ratings used for higher ed institutions. (Click to enlarge)

The U.S. economy has been through major changes in the last several years, and the effects are being felt on campus. In many cases, this turmoil shows up publicly in the form of a credit-rating downgrade. On some campuses, a change in the credit rating has no effect on the day-to-day operations; on others, it can be devastating.

College sports should be recognized as a business, a federal judge has ruled.

Quick, what business makes more money than the NFL yet pays most of its workers next to nothing? The answer is college sports, which generate $10.5 billion in revenue, the bulk of it coming from football and basketball. Less than 30 percent of that money goes toward scholarships and financial aid for players.

The remodel of a dining hall at The University of North Carolina at Greensboro was going to displace more than 5,000 student mailboxes. While thousands of those mailboxes were used infrequently—having been abandoned in the age of email and social media—they couldn’t be discarded entirely because there were still care packages from mom and dad and the occasional Amazon order to deliver.

Driving college loan defaults down

The coming change in how student loan default rates are calculated may mean bad news for some colleges and universities.

With the new calculations, the rate at which a group of students later defaults on loan payments will increase for most institutions, and schools with a particular default rate for three consecutive years will lose the ability to give Pell Grants. That’s why many are seeing this as the ideal time to look at how default prevention services are managed.

“We include in our emails a link to a brief video that explains that we are counselors, not collectors, working on behalf of the college the borrower attended, and that we work with borrowers and their loan servicers to resolve their loan payment issues. The video invites the borrower to call us.”

—Craig P. Anderson, senior vice president, business development, USA Funds

Tough economic times are forcing campus CFOs to expand their roles.

Rising operating costs, unstable revenue streams and continued tough economic times are forcing the campus CFO’s role to grow, say higher ed presidents surveyed by executive search firm Witt/Kieffer.

In the report, 14 presidents from a mix of public and private institutions of all sizes commented on today’s financial pressures.

Shirley Mullen is president of Houghton College (N.Y.).

Higher education is in the dock in 2014. The questions are flying:

Why does it cost so much? Why does it cost more each year?

Why do so many students not finish? Why can’t they get good jobs? Why is it not equally accessible to all?

Why is it not doing a better job training teachers for K12?

What do we have to show for the trillion dollars in student loan debt? Who will repay it?

There’s value in treating noncredit courses as more than just an add-on to degree programs.

Georgetown University officials had a bit of an epiphany recently about the impact of their noncredit courses. While the offerings had been around since the 1990s, administrators hadn’t realized the big benefits they could bring to the institution.

A transcript highlighting the full student experience at Elon University—including study abroad, research and service learning participation—is offered. When an e-transcript request is made, both the traditional one and the Elon Experiences Transcript can be combined into a single PDF file.

Rather than dealing with the intensive labor involved in sending and receiving paper transcripts—and frustration from students and graduates accustomed to automation—most colleges and universities have implemented electronic transcript capabilities.

Colleges and universities that have not yet implemented electronic transcripts may be selling their students short.

Not only do e-transcripts require less staff time and ensure better results through trackability and online security, but they also can be delivered almost instantly.

Cougar Corporate Partners, a new University of Houston giving program, lets companies invest directly in programs that will have an immediate impact on students who make up the future workforce.

Half of each donation is funneled into scholarships, the first $5,000 of which are being awarded in August. The other half of the donation is split between the M.D. Anderson Library and the University Career Services Center.

William M. Courson is president of Lancaster Pollard Investment Advisory Group.

Monetary policy in the United States took a dramatic turn with the introduction of quantitative easing after the financial crisis of 2008.

Although it achieved its primary objective by forcing down long-term interest rates, it also increased the supply of money in the economy, which has contributed to inflationary pressures in the past.

While we are fortunate to have witnessed a lengthy and very low inflationary environment, as money supply increases, the probability of higher inflation also increases.