Facing the Financial Downturn: Toolkit and Resources for Colleges and Universities
Colleges and universities are extraordinarily stable institutions, in part due to their mission and role in our society and in part due to how they operate and are managed. Nonetheless, the current financial downturn is impacting higher education institutions in a wide variety of ways. This page provides resources and tools, including Excel spreadsheets and various templates, to help colleges and universities reconsider what in many cases are long-held assumptions, to seek answers to questions that may not have been asked before, and to think about how these issues will shape their institutions in the months and years ahead.
- The Financial Downturn and Its Impact on Higher Education Institutions
This document addresses a wide variety of challenges and includes a series of questions that decision makers are asking themselves and colleagues as they work through the current uncertain environment.
- Understanding the Institutional Impact of the Current Economic Climate (On-Demand Webcast)
How will your institution be affected by the current economic environment? View a previously recorded webcast (aired on December 2) featuring a panel of experts from Cornell University, Commonfund, Moody's, and Prager, Sealy and Company, as they discuss key issues.
- Conversations With Financial Experts
In mid-October, NACUBO facilitated four conference calls with Research Universities Council members to provide perspective on the crisis in the financial and credit markets and invite member input and discussion.
- Cost-Saving ideas
Institutions are sharing their ideas to trim expenses in a variety of areas.
- Economic Stimulus
Leaders of many higher education associations endorsed a set of recommendations for President Obama and members of Congress.
- Institutional Liquidity
This fall, a number of forces collided almost simultaneously to produce concern on campuses throughout the country about the liquidity of their institution’s investments and in some cases led institutions to establish or increase their line of credit.
- Long-term Investments
Institutions are reviewing their asset allocation strategies, re-examining their investment manager selections, and scrutinizing their investment portfolio, all while maintaining their primary focus on the long-term success of their investment management tactics and decisions.
- Long-term Debt
In light of the credit and debt environment, many universities are actively re-assessing the current structure of their debt portfolio. Some are drafting or revisiting their formal debt policy guidelines, as well as determining appropriate strategies for capital funding, leverage and liquidity management.
- Balance Sheet Analysis
Although the full impact of the current economic turmoil is yet to be determined, liquidity and investment holding issues can impact key ratios used by the Department of Education to determine financial health, and thus eligibility to participate in the Title IV program.
- Insurance and Risk Management
The downturn offers lessons about risk governance, risk tolerance and the importance of transparency. The chief risk officer’s role is more important than ever. The timing may also be right for introducing some actuarial principles for managing risk exposures.
- Financial Reporting and Disclosures
The fall 2008 timing of market declines and liquidity restrictions can have implications for financial statement audits in process. Higher education institutions that have not yet released audited financial statements will need to evaluate the correct balance sheet classification for cash and cash equivalents, possible subsequent event note disclosures, and losses to asset market values.
- State Appropriations
At least 21 states have implemented or proposed cuts to public colleges and universities, with reductions ranging from 5 to 15 percent of previously appropriated funding.
- Fund Raising
Historically, regular annual growth in the private philanthropic support of colleges and universities has been fairly modestly tempered by periods of economic slowdown, and promptly rebounded as our economy has strengthened.
- Enrollment Levels
Colleges and universities are carefully watching spring enrollment, and applications for the incoming freshman class in the fall of 2009, for signs that the economic stress being placed on families will impact their decision to attend college, and whether there will be any market shifts towards lower cost colleges and universities.
- Student Loan Capital and Demand for Financial Aid
The financial strains that families are feeling are significant, and are expected to lead to increased demand for financial aid from federal, state and institutional sources.
- Campus Communications
Timely, thoughtful, transparent and thorough communications to staff, faculty and students can allay fears and ease the concerns of alumni - ultimately making a positive difference in how the institution is perceived.
Matt Hamill, senior vice president, advocacy & issue analysis, 202.861.2540
- ED Publishes Proposed Rules on Cash Management
- IPEDS Considers Improving Finance Survey
- Guidance Available on Title IX Coordinator Role
- 2015 CAO and CBO Collaborations
August 3-4, 2015
- 2015 Planning and Budgeting Forum
September 28-29, 2015
- 2015 Tax Forum
October 25-27, 2015
- ON-DEMAND: Lessons Learned in Communicating Financial Information Effectively
- ON-DEMAND: Corporate Sponsorships: Getting it Right
- ON-DEMAND: Analytics that Support Planning, Budgeting, and Results
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis