Out of Pocket

It is not exactly news that higher education has big money troubles. The pleading letters to alumni, as well as a number of studies, have proclaimed that many of the nation's universities and colleges have deep financial problems. But the magnitude of the crisis has been difficult to assess owing to the limited number of institutions surveyed. Now, the most comprehensive national study to date has been made by the New Jersey Commission on Financing Post-Secondary Education for the September issue of Change magazine.

The report is both impressive in its scope and alarming in its findings. Nearly 75% of all American colleges and universities, 2,163 institutions, were surveyed and evaluated according to 16 financial indicators.* Each was given one of five ratings: healthy, relatively healthy, average, relatively unhealthy and unhealthy. On this scale, only 25% of the colleges and universities were found to be healthy, and nearly half (49.2%) were judged either unhealthy or relatively unhealthy.

Other major findings of the study:

> Private institutions are in the worst shape. Fully 86.6% of them are in the bottom two categories, while only 13.5% of publicly controlled institutions are so placed.

> The smaller the school, the more likely it is to be in financial trouble. Less than a quarter of the institutions with fewer than 1,000 students are rated in the two healthy categories. Nearly 80% of the big universities--those with more than 10,000 students--fall in the top pair of ratings.

> Public community colleges are in the best condition (almost 70% in the healthy categories), followed by major research universities (47.1%) and four-year liberal arts colleges (only 11.7%).

> Single-sex colleges are in bad financial trouble. Nine out of ten studied are in below-average health, while 44.8% of all coed institutions are so situated.

> Church-related colleges, most of which are small, are worse off than secular institutions. Only 1.6% of Catholic colleges and 4.2% of Protestant colleges are in the top two groups, compared to 56.8% of secular schools.

> Of the predominantly black colleges studied, one-third are in the two top categories, as opposed to 44.2% of the other institutions.

To enable the schools in the study to better pinpoint their specific problem areas and to compare their ratings with similar institutions, Change, with the help of a grant from the Alfred P. Sloan Foundation, is sending them their scores for each of 16 indicators as well as their overall rating.

* Among them: complex ratios involving revenues, expenditures, enrollment trends, student-aid revenues and plant assets.

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