Dive Brief:
- St. Catharine College announced its closure plans this week, saying the U.S. Department of Education’s erroneous withholding of financial aid dollars doomed its chances by causing a drop in enrollment.
- WDRB reports the small school in Kentucky would need an infusion of $5 million to stay open while it sorts out its debt obligations and works with the Department of Education, which agreed to pay back a portion of the money it withheld following a lawsuit.
- The college has teach-out agreements with a number of other institutions, ensuring students who have not finished their degree programs will have somewhere to continue their studies next fall.
Dive Insight:
In addition to the closure announcement from St. Catharine, Burlington College in Vermont announced this month that the weight of its debt would force it to shut down. Burlington did not have the long history of the nearly 200-year-old St. Catharine, having been founded in 1972, but it is another story of a small college that did not have the enrollment strength to cover its own debt obligations. Sweet Briar College announced in March of 2015 that it would close because of financial strain and dwindling enrollment, and while alumni pressure has kept it open, Moody’s Investors Services expects a growing number of colleges to either merge or close because of market conditions in the higher education sector.