To better help users understand key components of the Integrated Postsecondary Data System (IPEDS) Finance survey, the Department of Education (ED) has proposed a variety of changes. The proposals are based on technical expert recommendations and an ED-sponsored study of needed changes and would impact several categories of the 2019-20, 2020-21, and 2021-22 survey collections.
We encourage business officers to provide feedback on the proposed changes to NACUBO for inclusion in the industry comment letter or directly to ED (Docket ID number ED– 2019–ICCD–0028). ED is accepting comments through July 19.
ED’s proposed changes include:
To allow survey users to better understand endowment activity over time, a new schedule will be required that displays endowment activity. The proposed schedule is a rollforward of endowment activity that would ask for beginning endowment net asset (or net position) balance and indicate additions, net investment return, endowment spending, and other changes. The ending endowment value would be calculated based on provided information but should equal amounts on the institution’s audited financial statements.
Sources of tuition discounts (scholarship allowances)
A proposed schedule would allow users to better understand institutional aid that is provided for tuition and fees and auxiliary services (typically room and board). Institutions will be asked to complete the source of discounts that are attributable to Pell Grants, other governmental grants (federal, state, and local), contributions, endowments, and other institutional sources.
The finance survey will ask institutions to specify whether intercollegiate athletics exist and follow up with questions about the types of revenues that support athletics activities.
Financial health indicators
The survey will ask institutions to provide the numerator and denominator for the four ratios that comprise the composite financial index: net income ratio, return on net assets, viability ratio, and primary reserve ratio. Formulas will be sourced directly from the most recent edition of Strategic Financial Analysis in Higher Education. Because not all ratio inputs are publicly available and component unit information for public institutions is not collected, institutions will be asked to calculate ratio numerators and denominators.
Other post-employment benefits (OPEB)
Public institutions will be asked if they have OPEB and whether they have their own plan or are part of their state’s cost-sharing plan. Based on these screening questions, institutions will be asked to provide expense, liability, and deferred inflow and outflow of resource information.
A 2017 report sponsored by the National Center for Education Statistics (NCES) and the National Postsecondary Education Cooperative indicated that users of finance survey data wanted similar information regardless of institution type and whether standards of the Financial Accounting Standards Board (FASB) or Governmental Accounting Standards Board (GASB) were followed for financial reporting. Further, users wanted to better understand financial health, return on investment, revenue sources, endowments, financial aid, and how students pay for college.
A Technical Review Panel was convened in 2018 to address the list of topics below. Topics in bold font are the ones that have been proposed for future finance surveys.
- Equalizing differences between FASB and GASB financial reporting requirements
- The feasibility of one common finance survey for public and nonprofit institutions
- Other post-employment benefits
- Assessing the types of revenue used to support operations in a fiscal year
- Sources of revenue that support intercollegiate athletics and how to best identify related expenses
- An institution’s source of funding for institutional aid provided to students (discounts)
- Understanding how students pay for college
- The best way to calculate several key ratios and the composite financial index
- Information that would illuminate endowment use and balance changes over time
- Whether tax information should be reported in light of the 2017 Tax Cuts and Jobs Act
- Quantifying the various types of technology costs incurred by colleges and universities