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This year continues to be a busy one relating to enrollments & finances, the ongoing FAFSA fiasco, and public earnings calls. Let’s look at some updates on previous posts.
One of the Headwinds
A week and a half ago I published a new view showing the combination of forces impacting higher education institutions, particularly around enrollments and finances. One of the headwinds mentioned was “inflation and interest rates” and that one has hit the news recently.
We have covered in more detail how the end of free money (i.e., return to more normal non-zero interest rates) has changed investor priorities and the availability of funding. But the other side of that equation also matters. In particular, higher education institutions have to contend with much higher internal costs due to inflation. Two stories show the impact in more concrete terms.
Facing a “steep” cash shortfall, California-based University of Saint Katherine is closing and will file for bankruptcy, President Frank Papatheofanis said in a letter to campus posted on social media last week by one of the institution’s sports teams.
Behind the private nonprofit’s crunch in operating cash is “extraordinary inflation,” including salary increases, as well as high institutional financial aid, the president added. He did not immediately respond to a request for comment.