{"id":2392,"date":"2026-06-09T03:12:48","date_gmt":"2026-06-09T03:12:48","guid":{"rendered":"https:\/\/knowacademia.com\/?p=2392"},"modified":"2026-06-09T03:12:49","modified_gmt":"2026-06-09T03:12:49","slug":"colleges-in-distress-need-breathing-room","status":"publish","type":"post","link":"https:\/\/knowacademia.com\/?p=2392","title":{"rendered":"Colleges in Distress Need Breathing Room"},"content":{"rendered":"\n\n

What is breathing room? It is simply the amount of cash needed to survive for one year, in particular enough cash to make it through the summer months. How does breathing room disappear here are the baker\u2019s dozen ways:<\/p>\n

    \n
  1. Borrowing to the point that all the property and buildings are 100% collateralized leaving no capacity to borrow money in an emergency.<\/li>\n
  2. Waiting too later to cut expenses when expenses grossly exceed net revenue<\/li>\n
  3. Raising tuition discounts (unfunded financial aid) to the point where the college receives only pennies on the dollar from tuition revenue.<\/li>\n
  4. Losing the opportunity to add new revenue generating programs because there is insufficient cash to pay for the start-up.<\/li>\n
  5. Delaying faculty buyouts, in particular tenured faculty, until there is not enough cash to pay for the buyouts.<\/li>\n
  6. Continuing to enroll students in programs that do not produce enough revenue to cover the cost of the program or overhead.<\/li>\n
  7. Postpoing negotiations with a lenders until the college has lost any leverage with lenders to either restructure debt or permit the college to delay interest payments several years.<\/li>\n
  8. Over invest in private equity, which do not have an active market because they are not easily sold to generate cash. Some private equity positions, if closed early, could result in losses of more than 50% of the original cost.<\/li>\n
  9. Carrying administrators who do not have the skills to do their work. This is particularly devastating when the borderline competent administrators are chief financial officers or the chief marketing officer.<\/li>\n
  10. Failing to monitor average class sizes with the result that small classes do not cover the cost of the faculty.<\/li>\n
  11. Deferring until too late the termination of academic programs tin which the revenue generated does not cover their direct costs or make any contribution toward administrative expenses.<\/li>\n
  12. Keeping buildings open, in which they have large amounts of unused space or in the case of residence halls, they are short the number of residents needed to cover operating expenses and debt service.<\/li>\n
  13. Keeping recruiters and gift officers, whose efforts fail to cover their pay.<\/li>\n<\/ol>","protected":false},"excerpt":{"rendered":"

    What is breathing room? It is simply the amount of cash needed to survive for one year, in particular enough cash to make it through the summer months. How does breathing room disappear here are the baker\u2019s dozen ways: Borrowing to the point that all the property and buildings are 100% collateralized leaving no capacity […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[29],"tags":[],"coauthors":[24],"_links":{"self":[{"href":"https:\/\/knowacademia.com\/index.php?rest_route=\/wp\/v2\/posts\/2392"}],"collection":[{"href":"https:\/\/knowacademia.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/knowacademia.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/knowacademia.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/knowacademia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2392"}],"version-history":[{"count":2,"href":"https:\/\/knowacademia.com\/index.php?rest_route=\/wp\/v2\/posts\/2392\/revisions"}],"predecessor-version":[{"id":2394,"href":"https:\/\/knowacademia.com\/index.php?rest_route=\/wp\/v2\/posts\/2392\/revisions\/2394"}],"wp:attachment":[{"href":"https:\/\/knowacademia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/knowacademia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/knowacademia.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2392"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/knowacademia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcoauthors&post=2392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}