(from Inside Higher Ed) About 11 private colleges are closing each year, a rate expected to near 15 in the years ahead, according to a new report from Moody's Investors Service. Continued financial pressures, combined with demographic changes in the Northeast and Midwest in particular, are widening the gap between revenue and expenses. The ratings agency found the biggest struggles among about 750 small private colleges with less than $100 million in total expenses. The median net revenue per student for this group covered just 53 percent of the median expense per student in 2016, down from 65 percent in 2012.
While colleges have other sources of revenue, like gifts and endowment income, “for a few each year, these other sources will not be enough to make up for lost student charge revenue, leading to deep stress and existential questions,” the ratings agency wrote.
Listen to the latest episode of the Net Assets podcast.
