Do colleges ever go broke?

You’d need to look at it like you would investing long term in company. An ivy league college with a tripple A credit rating (better than the US government) will probably be around for centuries for example. A little college that was only recently founded and that no has heard of may not be.

@Lightlyseared It just struck me as strange that big businesses have often closed because of bankrupcy and yet colleges that depend on people being able to afford the enormous tuitions have always found a way to survive. There are quite a few colleges in the US that have been around for over a hundred years. Some on the list aren’t even that well known like Harvard or Yale or Brown.

Antioch College in Yellow Springs, OH did. They are just now re-opening this fall. They were started in the middle 1800’s . . .

@Kayak8 I can see why they failed. Instead of giving grades to students they were given narrative evaluations. I sure that didn’t go over so big with future employers and many people wanted their money back for a bull crap grading system that was fine in the late 1800’s because going to college was the only reference you needed to succeed.

It also helps that some of the bigger/older schools have very sizable endowments millions/billions (MIT for example was at around $8B last year).

I can’t of the top of my head think of any colleges in my area that have gone under, plenty of budget trimming but not a hint of sinking to my recollection.

There we go, found a partial “billionaires” list.

@Pandora That’s not why they failed. My college did that too and they are highly respected. But – to answer your question, some colleges have failed. I forget the name but one college went bankrupt about 10 years ago and was bought by the Moonies. I think one reason they don’t fail often is that they can keep raising tuition and fees.

@Pandora Actually, that is NOT why they had financial difficulties. I have hired a number of Antioch graduates and they typically performed above their peers. The narrative evaluation is much more similar to the type of evaluation offered in the real work world.

New College of California in San Francisco closed three years ago mid-semester. They depended on their students getting student loans for tuition, which was also dependent on being accredited. Their bookkeeping was messed up, they lost their accreditation, and the Feds refused to give them the loan money.

Usually when colleges start to fail, they merge into or get absorbed by a stronger institution, such as when Kansas State took over Kansas Tech. 20 yeas ago.

The ones I’ve seen with my own eyes: Pillsbury College in Minnesota shut down 2 years ago, and a college for Lakotans/Native Americans (forgot the name) in South Dakota shut down about 7 years ago.

Both shut down for financial difficulties— I don’t think we hear much about them because they’re small, local, and usually aren’t influential on a large-scale, but yes, colleges do shut down. After that happens, there’s usually an uproar about whether the students’ credits are still good, their sports eligibility and their ability to maintain financial aid.

I also remember a big issue about the students who had gotten financial aid and had paid for the full semester—then when the school shut down mid-semester, they were not getting the credits and schooling they paid for, and the school didn’t not have the money to reimburse them. Arrangements had to be made but I’m not sure what happened.

Yes, colleges go out of business all the time, just like any other industry. I wouldn’t consider investing in a single college for pre-payment, but rather use a government insured pre-payment plan known as a 529 that allows withdrawal for educational purposes, with a clause to charge an interest penalty for non-educational withdrawals.

Well I guess, Colleges do get broke on some special occasions like there reputation has gone down due to some events leading for students to drop down which causes them to bankrupt and eventually close down.