Borrowing for College: A Comparison of Long‐Term Debt Financing between Public and Private, Nonprofit Institutions of Higher Education

Denison, Dwight V.; Fowles, Jacob; Moody, Michael J.

doi:10.1111/pbaf.12034

Cited by 16 publications

(9 citation statements)

References 40 publications

(57 reference statements)

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“…Unrestricted equity as a ratio of total assets (UETA), this study's variation of the Bowman (2011) long-term capacity indicator, also appears in four years, and is similarly indicative of a direct relationship between financial condition and the proportion of total institutional assets that have been funded through capital sources that are neither debt nor restricted by donors. This interpretation aligns with the analyses of Calabrese (2011Calabrese ( , 2013, Denison, Fowles and Moody (2014), and Jegers and Verschueren (2006).…”

Section: Resultssupporting

confidence: 87%

Dimensions and indicators of non-profit financial condition: Evidence from South African public universities

Bunting¹

2020

South African Journal of Economic and management Sciences

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This article offers a contribution to a broader discourse in non-profit financial analysis by recognising, and taking action in response to, the potential threat to research validity arising from the generally unchallenged presumption that accounting numbers provide a complete, unbiased and error-free representation of an entity's underlying economic reality. Setting: The 23 South African public universities in continuous existence for the 10 financial years from 01 January 2007 to 31 December 2016.Methods: From the non-profit financial analysis literature, three foundational models are identified, and 24 associated ratios are specified as candidate indicators of financial condition. These are calculated for each university from accounting numbers which have been adjusted in mitigation of inadequacies of the financial reporting rules. Principal component analysis is applied to evaluate the indicators, and eliminate those which lack significant association with the emergent dimensionality of financial condition. Results:The financial condition of South African public universities is positively associated with liquid discretionary financial assets, which are interpreted as representative of financial resilience and defensive capacity in the presence of economic shock. Unrestricted equity has incremental relevance, suggesting that the universities derive financial benefits from a capital structure in which assets are funded through sources that are burdened with neither debt obligations nor donor restrictions. Conclusion:This research appears to be among the first to propose a dimensionality for non-profit financial condition that is developed on a foundation of responding to the need for mitigation of inadequacies in the financial reporting system.

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Section: Resultssupporting

confidence: 87%

Dimensions and indicators of non-profit financial condition: Evidence from South African public universities

Bunting¹

2020

South African Journal of Economic and management Sciences

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“…Campuses collaborate with their bookstore management firm and the publisher to roll the cost of the reduced, negotiated textbook price into tuition or add it as a course fee, which ensures that each student has their required course materials on or before the first day of class (Follett, 2015c;Hurley, 2020;IncludED, 2016;Lorgan, n.d.;Pace-Scrivener, 2014). This new course fee can be covered by a student's financial aid (Anaya & Yankelewitz, 2020;United States Department of Education, 2009;, reducing out-of-pocket expenses and potential student long-term debt (Cannon & Brick, 2015;Denison et al, 2014).…”

Section: Emerging Modelsmentioning

confidence: 99%

Inclusive Access Course Materials: The Impact on Student Outcomes

Moore¹

2022

Preprint

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The rising cost of course materials over the last 20 years has had a negative impact on student finances, higher education choices, and grades. Two recent models have emerged to help increase student access to course materials while driving down acquisition costs – third party open educational resources and publisher content driven inclusive access programs. The potential impact of open educational resources on student outcomes has been widely studied. However, the potential impact of inclusive access programs on student outcomes has been studied less so. The intent of this quantitative correlational research study was to examine the relationship of student outcomes for students who had their required course materials provided on or before the first day of class, as part of an inclusive access program, compared to students who had the responsibility of sourcing their own required course materials. Study population size was 2,550 (N=2550). Data analysis techniques used in this study include chi-square test of independence and independent t-tests with a standard p-value of .05. Results of the data analysis revealed varying improvement in the increase in the number and percentages of students who passed a class with a letter grade ‘C’ or better when their required course materials were provided as part of an inclusive access program, compared to students who had the responsibility of sourcing their own required course materials. Furthermore, the results of chi-square and t-tests, provided insight into any statistically significant relationships between student populations who were enrolled in courses using an inclusive access program and student populations who had the responsibility to source their own required course materials.

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“…Finally, a last group of studies analyzed the relationship between the revenue structure and the use of debt by NPOs (Bowman ; Calabrese ; Calabrese and Ely ; Denison ; Denison, Fowles, and Moody ; Smith ; Yan et al ). They incorporated some variables related to the revenue structure, such as the proportion of the different revenues sources (public funding and donations, among others) or an index of revenue diversification, finding significant effects on leverage.…”

Section: Capital Structure and Nposmentioning

confidence: 99%

“…Leverage is usually measured as the ratio of total debt to total assets, although some authors (Denison et al ; Wedig et al ; Yan et al ) have isolated the study of long‐term debt because of its different features, following some researchers of the for‐profit field (Demirguc‐Kunt and Maksimovic ; De Jong, Kabir and Nguyen ). Other researchers have introduced supplementary measures of leverage: Calabrese (), Jegers (), Jegers and Verschueren (), and Yan et al () included the ratio of financial debt to total assets; Denison () analyzed mortgages and tax‐exempt bonds separately; Calabrese and Ely () studied in depth the use of tax‐exempt bonds; and Smith () analyzed four different ratios (total liabilities, financial debt, outside debt, and taxable debt, all with regard to total assets).…”

Section: Capital Structure and Nposmentioning

confidence: 99%

Capital Structure of Nongovernmental Development Organizations

García-Rodríguez

Jegers

2017

Nonprofit Mgmnt & Ldrshp

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In the first international study of this kind, we analyze the capital structure of 364 nongovernmental development organizations ( NGDOs ) from three different countries: Belgium, Spain, and the United Kingdom. We observe lower debt ratio values in the United Kingdom, and significant differences between countries were found by testing an econometric model with the five classical determinants of leverage, considering total debt and both long-and short-term debt. We find support for the pecking order theory, and we broadly discuss some possible reasons for the obtained differences.CAPITAL STRUCTURE REFLECTS THE MAIN fi nancing decision of organizations: choosing between equity and debt. In the nonprofi t sector, research has mainly followed previous research from the for-profi t sector, starting some decades later than in the corporate fi eld. Some limitations must be dealt with, such as the absence of international databases and, in general, the problematic access to the necessary information.This study focuses on a particular subsector of the nonprofit field, analyzing nongovernmental development organizations (NGDOs). In Europe, these are the organizations that work in the nonprofit subsector of the international cooperation and development, trying to improve the living conditions of developing countries. NGDOs receive a portion of the Official Development Assistance (ODA) from national governments, as well as significant donations from individuals. However, the recent economic and financial crisis had a huge impact on these nonprofit organizations (NPOs): some countries reduced their ODA; household income problems threatened private donations; and credit restrictions limited the available financing alternatives of organizations. All these problems have meant a critical financial scenario for these NPOs, so their leverage decisions become more relevant and their study more important. Furthermore, the literature on financial vulnerability of NPOs has emphasized the importance of the ratio of debt to total assets, as the more in debt, the more vulnerable (Andres-Alonso, Garcia-Rodriguez, and Romero-Merino 2016 ;Trussel 2002 ). In fact, higher debt ratio values had a negative impact during the financial crisis (Lin and Wang 2016 ).

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Borrowing for College: A Comparison of Long‐Term Debt Financing between Public and Private, Nonprofit Institutions of Higher Education

Cited by 16 publications

References 40 publications

Dimensions and indicators of non-profit financial condition: Evidence from South African public universities

Dimensions and indicators of non-profit financial condition: Evidence from South African public universities

Inclusive Access Course Materials: The Impact on Student Outcomes

Capital Structure of Nongovernmental Development Organizations

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