Inevitably, it's only a matter of time before all ‘spending junkies’ crash and burn. This translates into spending cuts for academic, sporting, and extra circular programs as institutions run out of cash and other people's money. Ultimately, aspiring minds, athletes, and mental diversity suffer from the consequences of the boat of irresponsibility being filled to capacity.
Headline: Study: One-Third Of Colleges, Universities In ‘Real Financial Trouble’
ATLANTA (CBS Atlanta) — Nearly one-third of colleges and universities are in “real financial trouble,” according to a new study. The report issued Monday by Bain & Company found that higher education institutions are facing a liquidity crisis. “Institutions have more liabilities, higher debt service and increasing expense without the revenue or the cash reserves to back them up,” the report states. The authors of the study, Jeff Denneen – a partner at Bain in Atlanta — and Tom Dretler — an executive in residence with Sterling Partners, found that universities are spending more than they can afford. The reason for the crisis, they say, is due to the equity ratio being down, the expense ratio rising and the lack of endowments for schools. The economic crisis didn’t help matters for higher education as many families have been unable to afford to send their kids to college. Student loan debt has also topped $1 trillion in the U.S.Source: atlanta.cbslocal.com
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