Predicting College Failure
Take Action Sooner Not Later
Inside Higher Education in a December article reported on sixteen nonprofit colleges that had closed in 2024. We were interested in what our financial risk model had predicted for these colleges. We have data for the time frame 2017 to 2022 on nine of the sixteen colleges. The financial risk model predicted that seven of the colleges were at great risk of near-term failure. Two of the colleges that closed in 2024 were at the high end of the moderate risk band, showing how quickly even moderate risk can turn into failure.
The question is: If the board knew the enormous risk of closure of these colleges in 2017 could they have developed a strategy to save them?
The Financial Risk Predictive Model provided early evidence that these eight colleges were in deep financial trouble and could fail soon. We recommend that college presidents and boards of trustees utilize Stevens Strategy’s extremely inexpensive predictive model to determine the level of financial risk for their college. If our model does show risk, we can help them in time to avert disaster.