A recent article in Deep Thoughts on Higher Education listed thirty colleges and universities that closed in 2024. We applied our Vulnerability Gauge Model to the list to assess their financial risk. Only nineteen of the private four-year colleges were used in the analysis because data was missing for eleven colleges, one was a community college, one was a public university branch, and one was a branch of a very large private university.
Chart: Comparison of Private Colleges with a High Risk of Closing in 2022 Compared to the Actual Number that closed in 2024
The preceding chart shows that for the nineteen private colleges tested using the data ending in 2022, four or 21.2% of the colleges were identified as having a low or moderate risk of closing and fifteen or 78.9% of the colleges had a high risk of closing within three years.
Because closings skyrocketed between 2022 and 2024, the analysis suggests that presidents and boards of trustees should quickly arrange an estimate of their college’s financial risk of closing. This step should also be taken annually.
The Vulnerability Gauge Model is an inexpensive and quick measure of financial risk. To purchase, click: https://buy.stripe.com/8wMaFHcgofhT1DaeUV.
If the model predicts that your college has a high risk of financial failure, you should take immediate steps to lower risk! We’re here if you need our help.