What Happened to Colleges at Risk of Closing?

The issue of college closures has gotten a lot of attention in recent years, as evidenced by this recent Chronicle of Higher Education piece summarizing the growing field of researchers and organizations trying to identify colleges at risk of closure. I am one of those people, as I am working on a paper on this topic that I hope to release in the spring.

In doing my research for the paper, I stumbled upon a piece that I wrote for the Chronicle back in 2015 and completely forgot about. (The joys of writing short pieces and blog posts…sometimes I forget what I wrote about several years ago!) In that piece, titled “Where 3 Accountability Measures Meet, A Hazardous Intersection,” I used a brand-new data source from the U.S. Department of Education combined with two other existing measures to identify private nonprofit and for-profit colleges that may be at high risk of closing. The metrics were the following:

(1) Whether the college was on Heightened Cash Monitoring in the first-ever public data release in April 2015.

(2) Scored in the oversight zone or failed the financial responsibility test at least once between 2010-11 and 2012-13.

(3) Had a three-year cohort default rate above 30% (subjecting the institution to extra oversight) at least once between the 2009 and 2011 cohorts.

While 1,150 private colleges that tripped at least one of the three metrics in my 2015 analysis, 26 colleges (six private nonprofit and 20 for-profit) tripped all three metrics. Now with five years’ worth of hindsight, it’s a good time for me to look at how many of these colleges are still open. I determined whether a college was open based on if it did not appear in Federal Student Aid’s database of closed schools that is updated on a weekly basis and if there was evidence of it being open based on a Google search.

The results of my investigation are the following:

College Name (* indicates nonprofit) Status as of Feb. 2020
Academy of Healing Arts, Massage & Facial Skin Care Possibly open, but website redirected
Allen University* Open
American Broadcasting School Closed June 2018
American Indian College of the Assemblies of God* Merged with another college in 2016
Antonelli College Open
eClips School of Cosmetology and Barbering Open
Everest College Closed July 2016
Fayetteville Beauty College Closed March 2019
Florida School of Traditional Midwifery* Open
Hairmasters Institute of Cosmetology Open
Helms Career Institute* Closed December 2015
Hiwassee College* Closed May 2019
Institute of Therapeutic Massage Open
Los Angeles ORT Technical Institute* Open
Mai-trix Beauty College Possibly open, but website redirected
National Institute of Massotherapy Closed June 2017
Northwest Career College Open
Oklahoma School of Photography Closed June 2017
Omega Studios’ School of Applied Recording Arts & Sciences Open
Professional Massage Training Center Closed July 2015
South Texas Vocational Technical Institute Open
Star Career Academy Closed November 2016
Stylemasters College of Hair Design Open
Taylor Business Institute Open
Technical Career Institutes Closed September 2017
Texas Vocational School Open

To summarize, 13 of the 26 colleges that triggered all three accountability metrics in 2015 were clearly open as of February 2020, with two other colleges potentially being open but having no clear Internet presence to support their existence. One college merged with another institution, while the other ten closed between July 2015 and March 2019. Of the ten colleges that closed, two closed in 2015, two closed in 2016, three closed in 2017, one closed in 2018, and two closed in 2019.

At the suggestion of Kevin McClure of UNC-Wilmington, I added an indicator for whether a college was private nonprofit (*) after I initially posted this piece. Of the six private nonprofit colleges, three remained open, two closed, and one merged. So the closure rate was about the same across both sectors.

This quick retrospective shows mixed implications for federal accountability policies. While less than half of the colleges that the federal government identified as being of the highest risk to students and taxpayers clearly closed within five years, this closure rate (especially among for-profit colleges) does suggest some predictive power of federal accountability policies. On the other hand, half or more of the colleges remained open despite all odds. This highlights the resilient (stubborn?) nature of some small private colleges that are determined to persist and improve their performance.

Again, stay tuned later this spring for a more thorough analysis of factors associated with college closures!

Author: Robert

I am an associate professor of higher education at Seton Hall University who studies higher education finance, accountability policies and practices, and student financial aid. All opinions expressed here are my own.

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