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 difficult to climb
because they often have lost their accreditation. Yet, they still try to recruit students. Zombies are the classic example of ‘caveat emptor’.
The simplest way to find Zombies is to look for private colleges that have reported negative unrestricted net assets (the assets that hold mostly funds for on-going operations – payrolls, payables, debt service).
Table 1 is a five-year report on Zombies with 2021 as the last year. There were nineteen
colleges reporting negative unrestricted net assets over the five-year period. Eleven of those
colleges had a negative change in enrollment for the period. There price elasticity was less than one, which means that changes in tuition discounts had little or no effect on enrollment. For
those colleges to get any increase in enrollment, they had to offer a tuition discount of 81.8%. So, if they did have increased enrollment, those colleges only received 20 cents in cash from a dollar of tuition revenue. These huge discounts explain why they were not able to escape their
doomsday collapse.
Table 1
| Zombie Colleges – Five Year Report | |||
| Negative Unrestricted Net Assets for 5 years | Elasticity for Last Year | Tuition Discount for Last Year | Negative Change in FTE for 5 Years |
| 19 | 0.41 | 81.8% | 11 |
The nineteen colleges were diving into Zombie oblivion at a time when the government dropped huge piles of pandemic largess to keep colleges alive. Well, they may not be alive, but they are
still there despite being Zombies bringing in students and providing unknown educational services for them. These colleges cannot survive long on a no cash and no accreditation
regimen. Typically, the end comes when the U.S. Department of Revenue no longer permits the college to issue federal financial aid to students. Then the Zombie colleges joint the Zombie
march to the Zombie Cemetery singing – Ha! Ha! Ho! Ho! Here we go to haunt our Lemming friends as they follow us to the Zombie Boneyard!
Reference
1 Quintana, Chris (I May 9, 2024) (Retrieved May 10, 2024);” Zombie Colleges? These universities are living another life online, and no one can say why”; USA Today; Zombie
colleges? These universities are living another life online, and no one can say why (msn.com).