Measuring the Viability of Colleges: Who Is Really in Distress?

A longitudinal file was developed containing statistics on almost all colleges and universities in the country and was used to compute 61 indicators of institutional viability. Particular colleges were identified as being in distress based on a combination of objective measures: closure, default on a federal loan, extreme enrollment declines, extreme reduction in faculty salaries, and extreme declines in current fund revenues and balances. These colleges were used to validate the indicators as being related to distress, separately by type of college. The validated indicators for each type of college were then used to construct a summary index of viability, which was found to classify accurately colleges that are viable or in distress. Distributions of the summary measure are displayed for various kinds of colleges (e.g., traditionally black colleges, women’s colleges, 2-year vocational colleges). Twelve kinds of colleges were found to frequently receive low scores on the summary measure.