Private College Closure Rate Rises to 11 Per Year

Private College Closure Rate Rises to 11 Per Year

This is still a relatively small number but it’s going up.

Inside Higher Ed reports:

Moody’s: Private-College Closures at 11 Per Year

Private college closures have risen to a rate of about 11 per year, and the rate at which campuses are shut down is expected to increase in the future, according to a new report published by Moody’s Investors Service Tuesday.

The report comes a few years after a notorious prediction the ratings agency made in September 2015 — that closure activity would as much as triple and mergers would double by 2017. As of the prediction, private nonprofit closures were averaging five per year, meaning as many as 15 institutions could have been ending operations annually by 2017.

Although the headline-grabbing tripling of closures has yet to come to fruition, a significant uptick has indeed taken place. And Moody’s is still projecting a future increase in closures toward the range of 15 per year.

Moody’s has consistently noted that private colleges are tenacious in the face of pressure and that while it projected increasing closure rates, it was still predicting a relatively low closure rate of less than 1 percent annually that could add up if it were to continue over multiple years. Nonetheless, the ratings agency is pointing out that continued stress from falling tuition revenue and rising expenses will drive colleges to close, merge or make drastic changes like cutting a significant amount of programs.

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