Forbes Names Berea as a “Standout” for Low Debt

Rising student debt continues to alarm many families. The amount of debt American colleges take on—while making fewer headlines—also is of extreme concern. Forbes, in its latest list titled “2017 College Financial Grades: How Fit Is Your School?” gives kudos to Berea College for keeping institutional debt low and scores Berea with an “A” grade.

In a newly-published article, Matt Schifrin, a Forbes staff writer, focuses on factors that indicate the financial fitness of schools: endowment assets per student; primary reserve ratio; viability ratio; return on assets; and instruction expenses per student.

Berea was noted for excelling in Viability Ratio, which measures the amount of expendable assets a college has relative to its debt load. Colleges that carry no debt received full credit as did colleges that have more than two and a half years of assets to debt coverage. Berea College was named as a standout in this category as were Smith College, Notre Dame, and Wellesley College.

Berea College President Lyle Roelofs said, “We are so pleased to be recognized along with a number of other fine colleges and universities with a grade of ‘A’ from Forbes, indicating that our commitments and practices add up to a financially viable model. Obviously, for a school that doesn’t charge tuition of any student to receive that grade is a remarkable endorsement!”

In addition to accolades for keeping debt low, Forbes included Berea College on its list of Top Colleges, Private Colleges, Liberal Arts Schools and America’s Best Value Colleges. Berea also was ranked in several other Forbes lists, including:

  • #79 in the top 100 colleges in the South; 
  • #58 in the Grateful Grads category, which ranks private not-for-profit colleges enrolling more than 1,000 students by analyzing median private donations per student over 10 years and the percentage of graduates that give back in the form of donations to their colleges each year.

Forbes notes that for the purposes of the 2017 Financial Grades, data was averaged from the two most recent fiscal years available from the Department of Education’s IPEDs database–2015 and 2014. Only private, not-for-profit colleges with at least 500 students were examined and the lowest grade given out was a D.