The university that runs the school of disabled children that I spoke about last week is collapsing.
Their $400 million expansion left them with $185 million in debt that they don't know how to pay. The university said they have 25 days of funding available. They are doing layoffs a day or two days after announcing they are in the middle of a financial crisis. They are asking the state for $10 million dollars in emergency aid. Their structural budget deficit is $60 million.
Total surprise. The president of the university who resigned at the same time she announced the crisis seems to have ran the place into the ground. She went from $100 million surplus to a $60 million deficit in a decade. The new buildings and satellite campus they built was financed by debt and didn't make the return they expected before the American university system collapsed. Enrollment is down and the university worked hard to keep tuition low over the prevailing decade. Bad bad bad.
The American university system is collapsing by the way. Enrollment is down year after year. Very different than what happened when the Great Recession took place. College enrollment actually spiked in '08. If a medium sized college just outside of NYC can collapse because of enrollment decline....there must be many more that are going to crash soon.
"The decline in college enrollment is worsening. According to a just released report by the National Student Clearinghouse Research Center (NSCRC), total postsecondary enrollment, including both undergraduate and graduate students, decreased by 4.1% - equal to about 685,000 students - in spring 2022 compared to spring 2021. Overall postsecondary enrollment now stands at about 16.2 million students.
Added to the 3.5% drop that was seen in spring 2021, the overall two-year decline in college enrollment has reached 7.4%, or nearly 1.3 million students since spring 2020. The deepening slide dashed hopes that the worst of the pandemic-era erosion of enrollment was over and, instead, raised concerns that other factors - such as growing skepticism over the value of college - may be keeping students away."
Expanding access to higher education through a federal loan scheme seems to have had a lot of bad effects and I wonder if we need to rethink all of it. Too many universities were reliant on student loan debt and then spent the money liberally. They expanded in expectation that there would always be more students willing to take on the debt. For the students, we saddled a lot of people with massive debt. Bad bad bad