{"id":40677,"date":"2026-01-07T16:05:14","date_gmt":"2026-01-07T16:05:14","guid":{"rendered":"https:\/\/naijaglobalnews.org\/?p=40677"},"modified":"2026-01-07T16:05:14","modified_gmt":"2026-01-07T16:05:14","slug":"college-and-university-closing-indicators","status":"publish","type":"post","link":"https:\/\/naijaglobalnews.org\/?p=40677","title":{"rendered":"College and University Closing Indicators"},"content":{"rendered":"<p>\n<\/p>\n<p>The sectorwide concern about the future of many colleges and universities stays top of mind in 2026. The struggle to keep institutions open sometimes plays out publicly through rallies to alumni for contributions (Limestone University), pleas to government entities for a bailout (Birmingham Southern College), negotiations over mergers and closures (Pennsylvania State System), or the sale of an art collection (Randolph College). Other times, the signs stay hidden to most and closure comes as a swift, shockingly coldcock to the face for constituents (University of the Arts). \u00a0All instances raise the question \u201cHow does one know if a shutdown or merger is imminent?\u201d<\/p>\n<p>The following checklist with 11 categories and 58 signs represents possible warnings that closure may be on the horizon. Words of caution: It really isn\u2019t one or even several things from this list that predict a closure. It is the number, gravity and severity of the issues, along with whether the measures save enough money and whether revenue-generation measures have been enacted simultaneously. For example, are costs cut or assets liquidated to pay monthly operational costs, or are funds used to invest in revenue generation? Are actions ethical, legal and standard best practices, or do they cross the line? Do actions lead to reputational loss or lack of constituent (internal and external) and government and lender\/investor confidence?<\/p>\n<h2>\u2018They Aren\u2019t Buying What You\u2019re Selling\u2019 (Revenue Generation)<\/h2>\n<p><strong>Indicators:<\/strong> Can\u2019t attract and keep students. Apathetic alumni. Donor disinterest. Auxiliary revenue generators are failing.<\/p>\n<ul>\n<li>Enrollment decline (demographic cliff)<\/li>\n<li>Lack of investment in new programs<\/li>\n<li>Hiring consultants<\/li>\n<li>Lack of branding and marketing<\/li>\n<li>Declining (or poor) persistence\/retention\/graduation rates<\/li>\n<\/ul>\n<ul>\n<li>Increased discount rate (above peer and national averages)<\/li>\n<li>Increased cost to attend (above CPI and peer averages)<\/li>\n<li>Decrease in alumni giving<\/li>\n<li>Decrease in the annual fund<\/li>\n<li>Auxiliary efforts not achieving financial goals (housing, ticket sales, etc.)<\/li>\n<\/ul>\n<h2>\u2018The Reorg\u2019 (Institutional Structure)<\/h2>\n<p><strong>Indicator:<\/strong> Employing numerous cost-saving measures.<\/p>\n<ul>\n<li>Positions combined or eliminated<\/li>\n<li>Departments or divisions consolidated<\/li>\n<li>Programs eliminated or put on hiatus<\/li>\n<\/ul>\n<h2>\u2018Past-Due Notices\u2019 (Services)<\/h2>\n<p><strong>Indicator:<\/strong> Trying to hold off creditors.<\/p>\n<ul>\n<li>Not paying invoices within 30 days<\/li>\n<li>Spending freezes<\/li>\n<\/ul>\n<h2>\u2018Throwing Out the Baby with the Bathwater\u2019 (Personnel: Part 1)<\/h2>\n<p><strong>Indicator:<\/strong> Trying hard not to let people go. <\/p>\n<ul>\n<li>Hiring freezes<\/li>\n<li>Furloughs<\/li>\n<li>Lack of annual raises<\/li>\n<li>Lack of retirement plans<\/li>\n<li>Increased costs to employees for health care<\/li>\n<li>Not filling open positions<\/li>\n<li>Elimination of tenure<\/li>\n<\/ul>\n<h2>\u2018Not With a 10-Foot Pole\u2019 (Personnel: Part 2)<\/h2>\n<p><strong>Indicator:<\/strong> Numerous employees with behind-the-scenes knowledge leave the institution because they see the writing on the wall. The institution can\u2019t find or adequately compensate qualified employees.<\/p>\n<ul>\n<li>Increased administrative turnover<\/li>\n<li>Increased internal promotions for unqualified staff<\/li>\n<li>Six to 12 months or more to fill a position<\/li>\n<\/ul>\n<h2>\u2018The Fire Sale\u2019 (Assets)<\/h2>\n<p><strong>Indicator:<\/strong> Liquidating or trying to monetize noncash assets. Selling donated or purchased personal property (art, rare books, vehicles, equipment); real property (buildings, land); intellectual property (copyrights to music, books, art and patents); and debt.<\/p>\n<ul>\n<li>Auctioning off art collection (whole or part)<\/li>\n<li>Selling real estate<\/li>\n<li>Making deals with land developers<\/li>\n<li>Selling debt to debt collectors<\/li>\n<\/ul>\n<h2>\u2018Desperate Times Call for Desperate Measures\u2019 (Endowment Management)<\/h2>\n<p><strong>Indicators:<\/strong> Changing policies, endowment value decreases significantly, hiring estate\/trust attorneys to find loopholes in agreements, opaque actions with endowment funds, asking donors or the state attorney general\u2019s office to change or negate gift agreements, and dissolving individual endowments.<\/p>\n<ul>\n<li>Significant decreased fair-market value<\/li>\n<li>Increasing percentage spent from investment earnings (above 5\u00a0percent best practice)<\/li>\n<li>Spending corpus<\/li>\n<li>Releasing funds from quasi-endowment<\/li>\n<li>Sweeping or reallocating available earnings at end of fiscal year<\/li>\n<li>Using restricted funds for unrestricted purposes<\/li>\n<\/ul>\n<h2>\u2018The Neighborhood Went to Hell\u2019 (Deferred Maintenance)<\/h2>\n<p><strong>Indicator:<\/strong> Unable to maintain or improve physical plant.<\/p>\n<ul>\n<li>Not budgeting for deferred maintenance<\/li>\n<li>Unclean buildings<\/li>\n<li>Broken equipment or fixtures<\/li>\n<li>Waiting \u201cuntil next fiscal year\u201d to fix equipment<\/li>\n<li>Taking buildings off-line<\/li>\n<li>Long periods between trash removal, mowing, panting, pruning, etc.<\/li>\n<\/ul>\n<h2>\u2018The Moral Compass Doesn\u2019t Point North\u2019 (External Audits and Legal Action)<\/h2>\n<p><strong>Indicators:<\/strong> Questions arise about financial controls, noncompliance with accounting practices and other actionable legal issues.<\/p>\n<ul>\n<li>Audit findings<\/li>\n<li>Lawsuits increase<\/li>\n<\/ul>\n<h2>\u2018Bad Financial Risk\u2019 (Financial Ratings and Rankings)<\/h2>\n<p><strong>Indicators:<\/strong> External monitoring agencies (such as accreditors, professional and affiliate organizations, lenders, credit rating agencies, Department of Education) raise red flags. National rankings decline.<\/p>\n<ul>\n<li>Accreditation warning, probation or loss<\/li>\n<li>High debt ratios<\/li>\n<li>Deficit budgets over multiple years<\/li>\n<li>Can\u2019t secure loans<\/li>\n<li>Loans called by creditors<\/li>\n<li>Less than 60 days\u2019 cash on hand<\/li>\n<li>No cash reserves<\/li>\n<li>National rankings falling<\/li>\n<\/ul>\n<h2>\u2018The Smell of Fear\u2019 (Board of Trustees\u2019 Behaviors)<\/h2>\n<p><strong>Indicators:<\/strong> Major changes in board behavior signaling dissatisfaction, alarm and crossing the lines between governance and management of the institution.<\/p>\n<ul>\n<li>Board giving declines<\/li>\n<li>Board members making major contributions to other institutions<\/li>\n<li>Board members serving as president or senior administrators<\/li>\n<li>Increased conflicts of interest<\/li>\n<li>Making management decisions<\/li>\n<li>Board member resignations<\/li>\n<li>Board members making decisions based on political affiliations<\/li>\n<\/ul>\n<p>This list offers a broad brushstroke on the matter of closures, and some categories and indicators are more telling and serious than others. Ultimately, and perhaps somewhat obviously, whether a closure happens boils down to several basic questions to be answered:<\/p>\n<ul>\n<li>Is there enough revenue to meet expenses? Is revenue growing to meet increases in the cost to do business? Are forecast models accurate?<\/li>\n<li>Is there enough cash on hand to address emergencies, revenue shortfalls and\/or times of the year when revenue lags expenses?<\/li>\n<li>Is the institution managing finances, funds and resources ethically, legally and according to national standards?<\/li>\n<li>Are there action-oriented, realistic plans to stay relevant in the future? Are administrative decisions reactive or proactive?<\/li>\n<\/ul>\n<p><em>Kathy Johnson Bowles is the founder and CEO of Gordian Knot Consulting.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The sectorwide concern about the future of many colleges and universities stays top of mind in 2026. The struggle to keep institutions open sometimes plays out publicly through rallies to alumni for contributions (Limestone University), pleas to government entities for a bailout (Birmingham Southern College), negotiations over mergers and closures (Pennsylvania State System), or the<\/p>\n","protected":false},"author":1,"featured_media":40678,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[2717,535,21831,781],"class_list":{"0":"post-40677","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"tag-closing","9":"tag-college","10":"tag-indicators","11":"tag-university"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/40677","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40677"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/40677\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/40678"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40677"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40677"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40677"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}