Forbes’ 2025 financial grades reveal that research-focused and selective colleges are weathering economic challenges best. Here’s what the data shows—and which schools may be at risk.
In a time of political and economic flux, financial stability is increasingly critical for higher education institutions. Forbes’ annual financial grades examines how well colleges are positioned. Their 2025 rankings paint a stark picture of the financial state of American colleges and universities.
As we analyze the most recent data, a striking pattern emerges: the strongest institutions often have one thing in common: a strong research backbone.
Top Financially Stable Colleges Are Research-Focused
Colleges that dominate in financial stability tend to fall into a few specific categories:
- R1 research universities
- Institutions awarding PhDs with substantial research spending
- Liberal arts colleges with strong arts and sciences programs
This is evident in the data. Among the top financially graded institutions, the majority fall under the Carnegie “Doctoral: Very High Research Activity” classification. These schools benefit from larger endowments, substantial federal research grants, industry partnerships, and the reputational strength that comes with producing impactful research. Liberal arts colleges also fare well, especially those with strong foundations in arts and sciences.
College Selectivity Predicts Financial Stability
Contrary to what one might expect, selectivity—not size—is a stronger predictor of financial stability. Elite institutions with low acceptance rates often show higher financial grades, regardless of their overall enrollment. This suggests that prestige, demand, and the ability to attract top students and donors play a more significant role than school size or even classification.
