RubinBrown Colleges & Universities Stat Book | NOT-FOR-PROFIT INSTITUTIONS

Scholarship Allowance One way that institutions have sought to attract more students is by increasing the scholarship allowance through providing more discounted tuition to students. Smaller institutions with less specialized degree programs generally have had to provide more scholarships in order to attract students in the current competitive environment. This is evidenced in the following chart illustrating institutions with net assets of less than $100 million generally provide on average a discount of 40% to students while larger institutions only provide a discount of between 25%-27%.

important because it is a key indicator of an institution’s ability to expand operations. Widely viewed as an industry standard, 7.0% is regarded as the upper threshold for this ratio; however, some institutions can still operate successfully while exceeding this ratio. A higher debt service burden indicates that an institution has less flexibility to manage its operating budget. Institutions with diverse revenue streams might be more comfortable with a higher debt burden ratio than institutions that are highly dependent on revenue generated by tuition. Not-for-profit institutions exhibited a wide range of debt burden ratio results in FY17 at 0.0% to 19.8% and 0.0% to 25.3% in FY18. The average debt burden ratio was 5.5% and 5.2% in FY17 and FY18, respectively. There were five institutions in 2017 and six institutions in 2018 that had no debt outstanding at their fiscal year end.

Scholarship Discount Rate Frequency by Percent of Institutions

50%

40%

32.1% 34.0% 30.2%

Debt Burden Ratio Frequency by Percent of Institutions

18.8% 28.3% 16.8% 9

30%

18.9% 13.2% 17.0%

50%

15.1% 15.1% 13.2%

20%

9.4% 11.3% 9.4%

40%

5.7% 5.7% 5.7%

10% PERCENT OF INSTITUTIONS (%)

24.5% 24.5% 30.2%

28.3% 28.3% 26.4%

30%

0%

17.0% 20.8% 19.0%

17.0% 7.5% 15.1%

20%

60%+

13.2% 11.3% 7.5%

0%–19%

50%–59%

20%–29%

30%–39%

40%–49%

FY16

FY17

FY18

7.5% 1.9% 0.0%

10% PERCENT OF INSTITUTIONS (%)

Scholarship Discount Rate by Size of Institution Net Assets > $100m Net Assets < $100m

0%

10% +

0%–2%

2%–4%

4%–6%

6%–8%

8%–10%

FY16

FY17

FY18

FY16

24.85%

39.06%

COLLEGES & UNIVERSITIES SERVICES GROUP

FY17

25.94%

40.06%

FY18

27.00%

40.71%

Corey Robinson, CPA Manager 816.859.7943 corey.robinson@rubinbrown.com Chester Moyer, CPA Partner-In-Charge 816.859.7945 chester.moyer@rubinbrown.com

Debt Burden Ratio The debt burden ratio is typically calculated by dividing debt service by total expenditures. Debt service consists of the interest and principal paid on long-term debt (excluding principal paid on refinancing transactions). A significant number of institutions rely on debt to finance operations, so the debt burden ratio is

6

Not-For-Profit Institution Scores