Could Your College Close? 5 Warning Signs Every Family Should Watch For

Hampshire College and Anna Maria College have both announced plans to wind down, joining a a list of other colleges that have announced closures this year. Families committing tuition dollars now have a real interest in spotting financial trouble before it surfaces in a closure announcement.

More than 30 New England colleges have closed or merged over the past decade, per the Boston Fed. Huron Consulting Group projects over a quarter of private, four-year schools could close or merge in the next ten years. Forbes’ new College Financial Grades report shows clear balance sheet stress at hundreds of institutions.

With these sobering stats in mind, how can you be sure your college will last? Here’s what to watch out for.

Five Warning Signs To Watch When Selecting A College

1. Low enrollment paired with a thin endowment. Higher education consultants flag schools with fewer than 1,000 students and under $100 million in their endowment as high risk. Hampshire enrolled roughly 750 students last fall with a $21.9 million endowment. Anna Maria’s endowment sat near $1.6 million.

2. Shrinking unrestricted net assets. Pull up the school’s IRS Form 990 on ProPublica’s Nonprofit Explorer. If unrestricted net assets are sliding year over year, the school is burning through cash. Fundraising patches the hole short-term but doesn’t close the gap between tuition revenue and operating costs.

3. Program cuts, layoffs, and odd new bets. Mass layoffs and program closures are clear distress signals. So is sudden expansion into sports or niche programs to chase tuition revenue. Anna Maria cut its music programs in 2022 — three years before announcing closure.

4. Selling off land or buildings. When a school starts liquidating real estate to cover operating costs, that’s a balance sheet under pressure. Buildings sitting empty on campus tours are another tell: a campus built for 2,000 with 1,000 students enrolled looks the part.

5. Unusually generous merit aid. Heavy tuition discounting is often a sign a school is struggling to fill seats. Schools generally need around $30,000 per student to cover costs. When discount rates climb and enrollment doesn’t, the math stops working.

What To Do If You Think Your School Is At Risk

Check the data yourself. Enrollment trends are public through IPEDS. Financial filings are public through ProPublica. Look at the last five years, not just the most recent.

Know your Closed School Discharge rights. Federal student loans may be eligible for full discharge if your school closes while you’re enrolled or within 120-180 days of your withdrawal — but accepting a teach-out transfer typically forfeits that discharge. Weigh the trade-off carefully.

Save transcripts now. Request and store official transcripts every semester. If a school closes suddenly, getting records can be a fight.

Ask hard questions about teach-out partners. If your school announces a partnership with another institution, confirm credit articulation at the program level — specialized credits in nursing, education, or fine arts don’t always transfer cleanly.

Be skeptical of aggressive transfer recruiting. Some schools courting transfers from closing colleges are themselves financially stressed. Run the same checks on any new option.

Bottom Line

The College Investor tracks colleges closing in 2026 and the closed school discharge process for affected borrowers. The Department of Education has discharged roughly $1.9 billion in federal loans from closed schools, averaging about $23,000 per borrower, but only when borrowers don’t transfer credits elsewhere.

Closures rarely come out of nowhere. Enrollment trends, financial filings, and on-campus signals tend to point the way months or years before an official announcement. Families paying tuition should look at the numbers the same way the consultants do.

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