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Glossary: College Finance & Operations

Auxiliary Services: Dining plans, dorms, convenience stores and other amenities that are increasingly important sources of revenue for universities and colleges. 

Bond Rating: A measure indicating a college’s ability to pay back the money it has borrowed from those to whom it has sold bonds, typically tracked by Moody’s and Standard & Poor’s. Ratings range from the top ranking of AAA to the lowest, CCC-.

Common Data Set: A survey of colleges created by the College Board, Peterson’s and U.S. News & World Report, asking for information about such things as enrollment, persistence, selectivity and financial aid, which institutions who want to get rated by the organizations voluntarily fill out. Many post their CDS online. Websites such as Collegedata.com also post much of this information for free. 

Discount Rate: The amount students actually pay for college, after discounts and financial aid are factored in. These often mean that few (and at a growing number of institutions, no) students pay the advertised or “list” price. 

Effective Spending Rate: The payout from endowments for financial aid and other operating costs; at universities, it averages 4.4 percent per year, which is less than is required to be paid out by endowments that support nonprofit organizations in the arts, human services, health care and religion.

Form 990: A form the Internal Revenue Service (IRS) requires private, nonprofit higher education institutions to complete each year to retain their tax-exempt status, and which must be publicly disclosed.

Heightened Cash Monitoring: A measure triggered by concerns about a university or college’s cash management process, wherein the U.S. Department of Education’s Federal Student Aid division begins to more closely monitor whether the institution is operating within federal regulations and is financially secure. 

Net Price: The price students actually pay, after discounts and financial aid. 

Persistence: The proportion of students who continue at an institution, generally measured as the percentage who come back for a second year.

Selectivity: The proportion of applicants accepted. Falling selectivity can be a signal of financial distress.

Updated May 2021