Will my college go bankrupt?
It’s something many prospective college students want to know, as Nick Ducoff and Sabrina Manville learned when they founded a college advising company in 2018.
The previous decade had been especially hard for private colleges. Fewer students were enrolling in college, and some colleges responded by increasing spending to chase after the smaller group of applicants. Every year, a handful of small and relatively unknown colleges ran out of money, forcing students to search for a new academic home.
Mr. Ducoff, a former administrator at Northeastern University, and Ms. Manville, a former administrator at Southern New Hampshire University, looked for a credible list of financially vulnerable colleges and couldn’t find one. So they decided to create their own, using publicly available information about trends in colleges’ revenues, expenses, debts and cash reserves.
They assembled and were preparing to release a list of colleges that were headed toward insolvency. But when Inside Higher Ed, working on a news article to accompany the data, began to contact the colleges affected, angry emails and phone calls started pouring in.
Making such information public would be “grossly irresponsible and would cause great harm to the college,” one lawyer wrote, demanding that Mr. Ducoff’s and Ms. Manville’s small start-up firm, called Edmit, “refrain from publication.” Edmit didn’t have the money to fend off multiple lawsuits. It put the list in a drawer.
That was in November 2019, shortly before the first recorded coronavirus victim began showing symptoms in China.
The higher education landscape is now in chaos. Last year, 419 colleges were still accepting applications for the freshman class after the traditional May 1 deadline. This year, the number is 754, suggesting an enormous drop in demand. If campuses can’t open this fall, or students don’t return, the private higher education sector faces a financial asteroid strike. Edmit updated its projections accordingly and published a less specific version of them this month. The numbers suggest many colleges are now at risk.