Many financially vulnerable colleges across the United States face growing pressure to prepare for potential closures amid ongoing fiscal challenges. Experts and officials increasingly advocate for institutions to establish funds to cover costs related to student loan discharges when schools shut down, aiming to protect students who have invested time and money in degrees at at-risk colleges.
One proposal under consideration would create a federal tuition recovery fund, requiring institutions to contribute fees proportional to the amount of federal student loan aid they receive. According to one proponent, this approach could generate as much as $9.5 billion over 12 years to cover loans potentially forgiven if colleges close. However, some critics argue that imposing such fees could deepen financial strain on already cash-strapped schools, potentially accelerating closures rather than preventing them.
Brian Weinblatt, founder and principal of Higher Ed Consolidation Solutions—a firm that assists colleges facing financial distress—notes that many colleges tend to delay engaging in restructuring or closure planning until it is nearly too late. He emphasizes that the demand for services related to school shutdowns is growing rapidly.
Reflecting these concerns, Nicholas Kent, undersecretary for higher education at the Department of Education, recently remarked that among the approximately 6,000 higher education institutions nationwide, not all will survive the coming decade. He added that it is neither realistic nor desirable for every college to continue operating and stressed the importance of adaptability for those seeking long-term viability.
Amid financial pressures, some institutions are exploring new revenue streams to stabilize budgets. Examples include Agnes Scott College in Georgia, which began renting out three of its historic homes last month, and Sweet Briar College in Virginia, which sells hydroponically grown lettuce from its greenhouses. The University of California, Davis, has developed a product line based on olives cultivated in its research orchards. Similarly, the University of Alaska generates income by issuing permits for firewood collection on forest lands it controls.
Other universities have pursued branding and licensing deals. New Mexico State University has licensed its name for coffee, whiskey, and tequila products; Mississippi State University has done so for cigars; and the University of Nevada, Reno, for beef jerky.
In parallel, efforts to preserve institutional legacies and alumni connections continue to evolve. The Nwaokolos, creators of virtual reality tours for Trinity Christian College, have developed a digital platform called Perduras—Spanish for "you endure"—to enable alumni and communities to revisit campus experiences even after closures. They emphasize that college campuses often hold significant emotional value as sites of personal growth and communal memories, and digital recreations offer a way to maintain ties when physical locations no longer exist.
Studies indicate that fewer than half of students from closed colleges continue their education elsewhere, and many lose credits earned and paid for when transferring. This reality underscores the urgency of proactive planning and protective measures for students and institutions alike as the higher education landscape continues to shift.