Private Colleges Face Enrollment Drop and Operating Losses

Forbes published its annual financial grades for 928 private colleges with at least 500 students. More than 25 percent received a D grade, the highest share since the publication began the assessment in 2013. Nearly half received a C or lower. The analysis links the results to a projected 13 percent drop in high school graduates that began this year.

The decline stems from lower birth rates during the 2008 recession. Middle-income families are also shifting toward lower-cost public colleges or opting out of higher education. New limits on federal Parent-Plus loans and a nearly 20 percent drop in international enrollment add further pressure.

Tuition at some private colleges reaches $75,000 per year.

Hendricks examined the University of Tulsa after the school cut its retirement contributions and eliminated 43 positions in 2016. The institution had an endowment exceeding $1 billion at the time but reported a $26 million operating deficit. Hendricks compared Tulsa’s finances with peer institutions and presented his findings on campus.

The school’s new president announced a plan in 2019 to cut more than 80 academic programs. Faculty and the provost later issued a no-confidence vote, and the president resigned in January 2020. Hampshire College in Massachusetts received a D grade. The college reported a negative $9 million balance in unrestricted net assets exclusive of plant assets in 2024 and announced it will close at the end of 2026.

Forbes used data from Perspective Data Science, a firm founded by Hendricks, to calculate unrestricted net assets exclusive of plant for each school. One hundred ninety-two private colleges showed negative balances on this measure. One hundred eleven schools, including Pomona College, Harvard, MIT, and St. Olaf College, received the top grade of A+.