If you’re a rising senior, you’re probably looking forward to your upcoming college years with great anticipation. You’ve worked hard for the credentials that will qualify you for admission to the schools that fit you best. College is the prize!
But what happens to your aspirations if you enroll at a college that closes its doors when you’re a freshman? You’d be forced to transfer to another college – one that might not suit you as well. It’s possible that the new one might fail too, forcing a second transfer in pursuit of your Bachelor’s degree. You’d end up spending most of your precious college years gaining and then losing friends, mentors, coaches, jobs, and some credits too. Not to mention the loss to your peace of mind.
This is not a far-fetched scenario. Colleges fail. In fact, a surprisingly large number of them have failed or been struggling in recent years, even before Covid-19 struck. Experts predict that about 20% of colleges will close in the next few years due to a combination of the pandemic, changing demographics, state disinvestment, and unaffordable tuition. If you’re going to college in 2021, you should find out if your targeted colleges are likely to be among the 80% that will survive.
Top-tier private colleges with multi-billion dollar endowments were given millions in Federal pandemic relief (with many, but not all, returning the money). However, the most at-risk colleges were excluded from the relief legislation. This neglect, added to the problems noted above, will take a heavy toll on the ones most likely to fold, which are small, private colleges with small endowments. Some of them have been operating at break-even or a small deficit for years. Even a slight decline in enrollment can be ruinous because they don’t have large endowments to cushion the blow. The pandemic will be their death knell.
A number of small private colleges have already closed or have announced a closing date in the near future. Here are a few examples:
• MacMurray College, IL
• Urbana University, OH
• Holy Family College, WI
• Pine Manor College, MA
• Nebraska Christian College, NE
• Robert Morris University, IL
• Concordia University, OR
• School of Architecture at Taliesin, WI
• Watkins College, TN
• Marlboro College, MA
Colleges tightening their belts
Many small colleges are adopting severe austerity measures in an effort to avoid closing. Even if they succeed in surviving, you’ll want to assess the likely impact of these measures on you as a student.
Public institutions, even some large ones like Rutgers and Michigan, are also feeling the pinch. States are compelled to cut their education budgets due to the statewide expenses and loss of tax revenue wrought by the pandemic. Public colleges have never fully recovered from heavy cuts to their budgets in the wake of the Great Recession. Add the current budget crisis on top of that and it’s inevitable that some state campuses will be closed.
Even large public and private universities that are expected to survive the pandemic will need to tighten their belts. You should stay informed because your target universities may discontinue the degree programs, majors, and courses in which you’re most interested. There’ll be reductions in faculty that will change the faculty-to-student ratio and impair mentorship programs that may be important to you.
How to research a college’s financial health
You’ll encounter two problems when you search for financial information upon which to base your decisions. First, a private non-profit college is not obligated to make financial statements available to the public. Second, the financial condition of all individual public colleges will be aggregated within the entire state university system, so you won’t be able to discern the financial outlook for a particular campus. Obviously, you won’t find even a hint of the possibility of a college closing on its website. Websites are marketing tools that try to recruit you, not discourage you.
The best way to obtain the information you need to assess a college is to enter the college’s name in a web search engine. If a college is experiencing difficulties, this will be reported in the local press because colleges are important to a community’s well-being.
The Common Data Set (CDS) is another a valuable resource. CDS is an intermediary used by colleges to provide institutional data to interested parties. It’s a collaborative effort between colleges and publishers who report on them, including Peterson’s, the Thomson Corporation, U.S. News & World Report, and the College Board. The purpose of CDS is to improve the accuracy of the information that’s released to interested parties, including you. To find the CDS data set for a particular college, enter “Common Data Set “Name-of-College” into a web search engine.
COVID-19 has come and it will go, but the uncertainty plaguing students at certain colleges across the country will remain. Try not to share their predicament. Use available resources to assess the financial stability of colleges before you apply.