Doing Your Homework
We have all heard the predictions – that many small liberal arts colleges (often in the Northeast, where there are so many more of them, and the student population is declining) will go under financially, especially in the wake of the pandemic.
This means it’s crucial for parents to do their due diligence on the schools a student is applying to.
The easiest way to do this research is simply to look up the Common Data Set, which each college is required (by law) to fill out each year. You can find a school’s forms by googling Common Data Set and the name of the college. There are also on-line trackers you can consult, such as the Hechinger Report (especially their Financial Fitness Tracker) and Moody’s Bond Ratings.
Using the Common Data Set, assess the college’s numbers over time, looking for four- or five-year trends. Consider the following:
· Institutional enrollment (Section B1): Is the school growing, declining or stable?
· Retention rate (Section B22): Do freshmen want to stick around for sophomore year? Anything below 70% is a real red flag!
· Acceptance rate (Section C1): Add men and women who were accepted and divide by men and women who applied
· Yield Rate (Section C1): Add men and women who enrolled and divide by the number of men and women accepted. Anything under 25 percent might be a problem.
· Graduation rate (After section A) No one wants their child to spend six years getting a four-year degree. But the federal government asks for six-year graduation rates. A high acceptance rate and low graduation rate may be cause for concern.
The data may be a lot to calculate and consider, and for well-known and well-endowed colleges (such as Princeton, Williams or Rice) it will be a waste of time. But smaller, less well-known schools – even those suggested by an independent educational consultant – are worth a look.
Taken together, this information can tell parents if a college is growing, maintaining popularity, and graduating its students. Otherwise, the school might be heading into trouble. There will always be risk, but families should know what they’re taking on!