Applying the IRI paradigms, AAEA recently finished a study on potential bankruptcy of US colleges. This study was triggered by the fact that college tuition kept increasing over many years in the past. What the driving factors of such increases are? This certainly a big question to answer. Therefore, the study is divided into smaller research projects. The first objective is to see how many colleges are underwater as measured by their Debt to Equity Ratio (DER). We found that about 8.20% (519 institutions) of total all type colleges in the US are underwater. The severity of the financial shortfall is different from one institution to the others. But, we did not attempt to classify them further. Rather, we let the readers to make that call. We then calculate the total liabilities and total net assets for the entire population of these financially and potentially troubled institutions. The research shows that the total liabilities are higher than the total net assets by $137 billion. Approximately 20% of the size 2008 bank bailed out money under the TARP (Troubled Asset Relief Program) program which was sign by President. George W. Bush on October 3, 2008. Please click on Research Results tab to find out more.

Let us not undermine the need of improving US Colleges operational efficiency and the power of Institutional Research Intelligence (IRI) paradigms, the new mindsets upon which US colleges need to be operated from. AAEA has identified Lambuth University falls under the RED group (DER greater than one and negative student enrollment growth). We found out later the following fact about the institution from the University of Memphis website on March 24, 2013.

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In July 1991 the historic liberal arts “college” became a university. During the school’s 168-year lifetime, it earned an outstanding academic reputation and was recognized as one of the nation’s top colleges by U.S. News and World Report and The Washington Post.

As a small institution, Lambuth fell victim to dwindling fiscal resources, and as a result, it was forced to cease independent operation in May 2011. However, recognizing the important role the school had played in higher education in West Tennessee, civic leaders and government officials worked to maintain the Lambuth campus as a part of the University of Memphis, a public four-year research university that is part of the Tennessee Board of Regents system. In August 2011 the University began offering classes at the Lambuth campus in Jackson.

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