May 21, 2012

HIGHER EDUCATION BUBBLE UPDATE: Student Loan Bubble Putting Hundreds of Colleges at Risk. “207 colleges and universities—31% of the 678 institutions in the database— have, under at least some circumstances, more debts than cash and marketable investments. In the model these 207 inadequate-capital institutions have projected net financial asset balances ranging from a negative few hundred thousand dollars to nearly a negative $400,000,000. More than half of the 205 had negative projections from ($10,000,000) to ($100,000,000).”

Related: Chester College Will Close. “The economic downturn that started in 2008 has been particularly tough on very small private colleges that lack much in endowment income or national name recognition. Dana College shut down in 2010. Mississippi’s Wesley College closed that same year. Lambuth University, in Tennessee, closed last year after losing accreditation.”

All I can say is, I told you so. I also have some thoughts on what comes next.

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