Risky Strategy by Many Private Colleges Leaves Them Exposed – The New York Times
Chasing after a shrinking pool of wealthy students by increasing spending, and now vulnerable to closure because of the pandemic.
Will my college go bankrupt?
It’s something many prospective college students want to know, as Nick Ducoff and Sabrina Manville learned when they founded a college advising company in 2018.
The previous decade had been especially hard for private colleges. Fewer students were enrolling in college, and some colleges responded by increasing spending to chase after the smaller group of applicants. Every year, a handful of small and relatively unknown colleges ran out of money, forcing students to search for a new academic home.
Mr. Ducoff, a former administrator at Northeastern University, and Ms. Manville, a former administrator at Southern New Hampshire University, looked for a credible list of financially vulnerable colleges and couldn’t find one. So they decided to create their own, using publicly available information about trends in colleges’ revenues, expenses, debts and cash reserves.
They assembled and were preparing to release a list of colleges that were headed toward insolvency. But when Inside Higher Ed, working on a news article to accompany the data, began to contact the colleges affected, angry emails and phone calls started pouring in.