Last week, Inside Higher Ed reported on scuttled plans to publish a list that projected closure dates for private colleges and universities based on a new forecasting tool developed by Edmit, a college admissions advising company. The matter deserves your attention, whether you are at a public or private college or university.
I have long been a supporter of the increased use of data in the business of higher education. But, as the Association for Institutional Research, EDUCAUSE, and NACUBO assert in our recent joint statement, “responsible use of data is a non-negotiable priority.” I am deeply concerned by Edmit’s attempt to project the demise of institutions.
You know that scrutiny of higher education is intense. In a world with easy access to data, we must all be prepared for third parties to use public information about our institutions to justify opinions, advance their businesses, or market their products and services. Sadly, we must be prepared for this use of data even when it is not responsible.
I firmly believe measures of financial health can be helpful planning tools for business officers, institutional leaders, and fiduciaries, but non-current data in the public domain do not reflect work in progress or prospective plans from leaders and managers.
As you consider the current dust-up, I thought it would be helpful to share several premises that guide our work in this area and remind you to focus on readiness:
- Many colleges perform financial stress tests, but they are not one-size-fits-all. Choose assessments that work for your institution and arm your stakeholders with actionable information.
- Financial ratios and similar indicators are valuable internal examination tools but don’t portray the full picture of institutional health to an external audience. Be aware of where you stand and be well prepared to explain your situation.
- IPEDS data is historical information, not a snapshot of the current situation. Historical markers and databases may include information that can distort predictions. Planning and leadership actions are not reflected in the data. Stand ready to defend the context of your data and to provide updated information.
- Private colleges and universities are already held to standards to help ensure they are not at risk of precipitous closure—and they must comply with new disclosure and financial responsibility rules. Begin to focus on process and reporting enhancements not only to comply with regulations but to tell your story.
As always, NACUBO staff are ready to answer your questions and provide support as you consider your response to requests for financial information. Call 202.861.2500 to speak with us. For comprehensive support, consider NACUBO Consulting, which will officially launch in January 2020.