The briefing papers for the Private Colleges & Universities in Crisis consider causes of a financial crisis and approaches to dealing with such a crisis.
What is a Financial Crisis Essentially, all financial crises are cash based. Simply put, if there is no cash, there is no college. In most cases, the crisis is cumulative, and the cause or causes have depleted cash over several years until a point is reached where...
Overview: Private college leaders, especially presidents of small colleges, are tasked with maintaining the financial viability of their institution and avoiding strategic and management errors that threaten the continued financial viability of their institution....
Presidents and boards of trustees often respond to a financial crisis with a destructive contest in which a board resists the presidents for greater authority. President’s takes the lead because they believe that an effective response cannot take place unless they...
Preface Strategic planners need to pay attention to corporate and legal documents that can delimit decisions needed to support strategic change. Corporate documents refer to the charter, bylaws, and mission statement of the college, while legal documents may comprise...
Failure Has Many Causes Why are some colleges seemingly collapsing overnight? There are many causes for some private colleges surviving at the brink, but it takes a particular set of circumstances for a sudden collapse. What follows are factors that could drive a...
Introduction For the past decade, our colleagues and columnists have remorsefully muttered about friends in terminally ill colleges. Now, we know “for whom the bell tolls.” As more old colleges are thrown on the death cart, other small colleges only wait and wonder if...
Michael Townsley, Ph.D. Senior Associate Stevens Strategy Private colleges and universities are encountering unprecedented levels of financial stress that may even exceed the financial problems caused by the Great Depression in the 1930s. According to the Hechinger...
Zombie Colleges are the walking dead of private colleges. They have: no cash, cannot make payroll, pay bills or debt services, violated their debt covenants, and only a few faculty who work for nothing. [1] The Sisyphean hill for these colleges is very high and...
Michael Townsley, Ph.D. March 31, 2024 Introduction For the past decade, our colleagues and columnists have remorsefully muttered about friends in terminally ill colleges. Now, we know “for whom the bell tolls.” As more old colleges are thrown on the death cart, other...
The higher education market is shedding colleges at a record pace. Despite the large influx of federal funds in 2022 to offset the effect of the pandemic (see Chart 1), fourteen private colleges closed or disappeared in mergers during the first three months of 2024....
First Published on Stevens Strategy Blog Nearly every week news flashes a report of another private college either closing or in deep financial trouble. Here is a short but not exhaustive list of colleges that have closed this year: Alderson Broadus, Cardinal...