Most Private Schools’ Financial Statuses Improving, Says Report

Angela Januzzi

July 25, 2007

In the most recent debt ratings conducted by Standard and Poor analysis and released Tuesday, only five schools did not improve during the 2006 fiscal year.

Credit analysts for the company attribute the financial improvement of the private schools to their record-setting fundraising endeavors, increased demand from students, and double-digit endowment returns. Though over the past five years many private schools and colleges have made major renovations and structural improvements to their campuses in hopes of attracting more students, the revenue gained from such changes has, according to the report, successfully compensated those debts.

Only five schools, due to major endowment spending and/or decreasing enrollment, ranked lower than previously.  

However, one area of the report which remained ambiguous was its conclusion regarding whether increased endowment spending contributes to stronger or weaker institutional finances. According to the report, many private schools are increasing their endowment spending in order to restrain tuition increases and attract more students, but other schools feel such endowment money would be more beneficial if saved for future application. 

Source: Epstein, Jennifer. “Positive Financial Assessment of Private Colleges.” www.insidehighered.com. Posted: July 25, 2007.