Liberty News

LU receives highest-possible score on government financial responsibility test

March 15, 2017 : Liberty University News Service

Recent data released by the U.S. Department of Education shows that Liberty University passed a financial-responsibility test for private universities for the 2014-15 academic year, earning the highest score.

The department looked at 3,374 non-profit and for-profit institutions, evaluating their debt and assets, to show their overall relative financial health. (The Higher Education Act of 1965 requires these institutions to submit audited financial statements, demonstrating adherence to the standards of financial responsibility necessary to participate in Title IV programs.) Scores are a composite of three ratios (primary reserve, equity, and net income ratio) and range from -1 to 3, with scores lower than 1.5 considered failing. Liberty received a score of 3, joining 809 schools on the test, including Harvard University, Temple University, and Princeton University. Liberty scored higher than Yale University and Boston University.

Liberty continues to receive positive reports on its financial stability. In 2016, Standard & Poor’s affirmed an ‘AA’ long-term rating on Liberty’s taxable bonds with a stable outlook. S&P stated that Liberty’s financial profile was “very strong, characterized by excellent operating performance, a growing endowment and investment portfolio with healthy resources relative to debt, significant operating flexibility, and a relatively low debt service burden.” In an earlier report, S&P said Liberty “will continue to enjoy strong student demand with a successful brand centered on an evangelical Christian identity and attractive pricing for a nonprofit private university.”

In 2015, Moody’s Investors Service affirmed the university’s Aa3 rating with a stable outlook, taking into account Liberty’s expansive growth, superior operating performance, strong liquidity, and manageable debt burden.

Liberty marked its initial public bond offering when it issued $120 million worth of tax-exempt education facilities bonds in December 2010. In January 2012, Liberty announced its second IPO, this time in the corporate bond market selling $100 million of taxable bonds.

In December 2012, Liberty became the first evangelical Christian university to surpass $1 billion in net assets. It took Harvard University 329 years to reach this same milestone in 1965.

Liberty is in the midst of a nearly billion-dollar campus rebuilding, with new academic buildings, residence halls, and athletics facilities.

View the scores in an easy-to-read format from The Chronicle of Higher Education.