An Introduction to Comparative Metrics

It is always helpful to know how your school compares with other schools in terms of finances, staffing, enrollment factors, ratios and other metrics.  There are sources that provide a limited range of comparative metrics based on information that is in the public domain. But The 2024 New England Survey provides what is arguably the most robust source available for a major sample of similarly situated colleges and universities in a specific region of the country.  What is shown on the page that follows are comparative statistics for the full sample of 44 schools compared with sub-sets of that sample:  The 31 schools that would be "at risk" if their enrollments drop by 15% based on a present value, all other things being equal look at their cash flows, using 3 years of Staying Power as the "at risk" threshold; and the 13 schools in the Survey that would still have Staying Power greater than or equal to 3 years under those circumstances.  

Each section below refers to a specific table on the next page. 

The schools that are not deemed to be "at risk" based  solely on the  Survey criteria for breaking the sample into two groups for initial analytical purposes are clearly larger, on average than the "at risk" group, so defined.  But that could be due, at least in part, to the fact that the at risk is more than twice the size.  And the more fundamental comparisons, particularly the extent to which the two groups are dependent on tuition is identical for all practical purposes which suggests that the key difference is not size, per se, but how the schools have been managed over time to the extent that shows in the amount of cash they have on hand.  

This section looks at asset amounts and ratios to see where there are similarities and differences between the three populations. And there are two major differences - cash and endowment. Now that might support Forbes' emphasis on endowment in their College Grade report. But these are not independent variables worthy of a piece of the grade. Endowment is one of the reasons why the 13 schools not deemed to be at risk have more cash. And that may be by design, by accident, or simply because of the history and target population of the school. But all Staying Power cares about is where the school stands today in relation to tomorrow and the next day.  And the leading indicator that correlates most highly with Staying Power - by far - is, simply, cash.  

Of course it follows that if demographic averages - like enrollment and revenue - are higher for one group, their campuses will be bigger.  But what is important here is the amount spent on average for fixed asset additions funded with cash that will be capitalized and depreciated over time.  And here the cash outlay itself and that outlay as a percentage of the book value of PPE both favor the group note deemed to be at risk.  It short, it might, emphasize might, suggest that schools not deemed to be "at risk" are. or perhaps have been, more cautious or prudent when it comes to using cash for fixed asset additions.   

A sports analogy says it best:  The schools not deemed to be "at risk" outperform the "at risk" schools in just about every offensive and defensive category.  

And sticking with the sports analogy:  It is pretty obvious which teams will make it to the post-season and which will pack it in - but hopefully just for the off season.  

The 13 schools not deemed to be "at risk" based on the 15% decline, 3 Yr. Staying Power threshold are statistically: More selective, have higher matriculation rates, and graduate a significantly higher percentage of their undergraduates.  The last observation is particularly important since it reflects the lifetime revenue stream from a single cohort.  That having been said, the IPEDS data for each institution summarized here is for the 2017 cohort which, by the end of 2024, had been in attendance to one degree or another for 150% of the baseline 4 years to the degree.  That is the IPEDS reporting requirement.   While this information helps to explain how a school got to this day in terms of its cash position, it is no guarantee the 2017 cohort performance standard will remain the same.   

This is, potentially, the proverbial "harbinger of things to come".  Raw matriculation counts - simply the number of incoming first year students - is already trending down, long before the dreaded "demographic cliff" is upon us. 

While perhaps interesting, these data really just illustrate and provide context for the next table. 

As schools consider austerities - and particularly if the act to mitigate the adverse impact of potential declines in enrollment on their all-important cash positions by putting "Phased Downsizing" in place, these ratios may be helpful.

And no survey would be complete without a comparison of average faculty compensation which, in this case, suggests that schools that have a more secure cash position - for whatever reason - are able to recruit and retain a faculty with greater standing in the academic community if, in fact, compensation levels reflect that standing and not just a by-product of the fact that the schools are in better shape based on Staying Power.