Threats of more closings have colleges and students worrying about how to save themselves

Glass doors lead to the light-filled lobby of a redbrick and limestone chapel at one end of a grassy quad, where lectures and receptions were held and students testified about their faith.

Original artwork hangs on the walls on the way to the music department, chaplain's office and recital hall, along with brass "leaves" listing the names of past financial boosters formed into the shape of a tree.

This visit to Trinity Christian College, in Palos Heights, Illinois, isn't real. It's virtual, captured just before the college closed in May so students and alumni could remember the campus, which is being sold off to repay more than $26 million worth of debt and other liabilities.

"Instead of being wiped off the map, this is a way to honor the legacy" of the college, said Shalom Nwaokolo, who, with his wife, Ashley, is creating the permanent digital preservation of it.

Memorializing colleges and universities in virtual reality is among the more sentimental responses to the accelerating pace at which they're closing and projected to close.

So pronounced has this trend become, however, that it's also resulting in more consequential steps that speak to the intensifying threat of plummeting enrollments, rising debt and other problems.

The federal government is promising to streamline the process through which struggling colleges are taken over by healthier competitors, for instance. States are ramping up protections for consumers when campuses close anyway, and there is a proposal to do the same thing at the federal level. Lawsuits are multiplying, brought by students and employees against schools that closed. And institutions are trying to identify new sources of revenue.

Twenty-two states now make private higher education institutions pay into "tuition recovery" funds, typically requiring that a percentage of tuition collected be put aside in state accounts from which students could be compensated if the colleges close. While many of these funds were started to protect students at for-profit schools, nearly half have been extended to nonprofit degree-granting colleges.

Related: Interested in innovations in higher education? Subscribe to our free biweekly higher education newsletter.

"This is an opportunity for states to protect students in the event of these closures, because we're probably going to see more of them," said Preston Cooper, a senior fellow at the right-leaning American Enterprise Institute who has called for the federal government to do the same thing.

In Massachusetts, where 26 colleges have shut down since 2014 and a 27th has announced that it will close at the end of this year, a state law now requires private colleges and universities to provide financial reports to anyone who wants to see them. Regulators have begun conducting annual reviews to determine and publicly disclose whether institutions are at imminent likelihood of failing.

To save some schools from that fate, officials at the U.S. Department of Education are pledging to speed up the process that can lead to mergers between healthier and troubled institutions, which officials say now take so long that one or the other party often gives up.

Meanwhile, legal firms have started filing lawsuits on behalf of students, faculty and staff of colleges that have already closed, generally accusing them of fraud and breach of contract. Three class-action federal lawsuits have been brought against the University of the Arts in Philadelphia alone, which shut down abruptly in 2024.

More than 440 of the nation's 1,700 private, nonprofit four-year colleges and universities, or about a quarter of the total, are at risk of closing or having to merge within the next 10 years, according to an estimate by the Huron Consulting Group; of those, more than 120 are at the highest risk, based on their enrollment, assets, debt, cash on hand and other characteristics.

Related: More than a quarter of private colleges are at risk of closing, new projection shows

So much attention has begun to be focused on college closures that the Education Department has produced instructions for students about what to do if it happens to them. "Try not to panic," it advises.

That might be hard, considering that fewer than half of students at colleges that close continue their educations, according to the most comprehensive study of this, by the State Higher Education Executive Officers Association. Many of those who do continue lose credits they've already earned and paid for, and fewer than half ultimately earn degrees. The 442 colleges Huron projects to be endangered have a collective enrollment of 670,000 students.

Consumers whose colleges close can at least apply to get their federal loans forgiven through two existing routes: the Borrower Defense to Repayment and the Closed School Discharge programs. But that shifts the debt onto taxpayers, who have already had to cover billions of dollars in loans that will never be repaid.

There are growing calls for institutions to put aside money for these costs.

"We do need to think about how students are protected, so when they have invested time and money in their degrees, they can get refunds and discharges of their college loans, and so those costs can be paid for by colleges rather than taxpayers," Cooper said.

Related: Faster, thinner: Colleges are swiftly trimming a B.A. degree to three years

In his proposed federal version of state tuition recovery funds, schools' contributions would be based on how much federal student loan money they receive. Institutions at higher risk would pay a larger fee. Cooper calculates that this would raise $9.5 billion over 12 years to cover the cost of loans that might be forgiven if the colleges close; critics counter that such a fee would only further squeeze already cash-strapped colleges.

Despite mounting pressure to prepare for the worst, many vulnerable colleges remain slow to take action themselves, said Brian Weinblatt, founder and principal of Higher Ed Consolidation Solutions, one of a growing number of firms that help imperiled schools fix their financial problems, merge or close.

"Almost every institution waits until it's too late to engage in this process," said Weinblatt, who said working with colleges that have finally decided to shut down is the fastest-growing proportion of his business.

The company has developed its own "merger runway index," a calculation of how much time a university or college has left before it has to merge or close, he said.

"They wait until it's too late, so they're no longer attractive to potential merger partners because their enrollment has dwindled too much, they have too much deferred maintenance, there's too much debt. People have been burying their heads in the sand, both administrators and trustees."

Even if they do decide to merge with a healthier competitor, federal government red tape makes the process so time-consuming that they run out of runway. "The school that's in the better financial position says, ‘If it takes another year, we can't keep subsidizing this other school that's struggling,' " Weinblatt said.

The Department of Education is working to fix that, Nicholas Kent, under secretary for higher education, told a conference at George Mason University.

"Depending on how you count them, we have 6,000 institutions of higher education in this country, and not all of them are going to make it out of the next decade," Kent said. "And quite honestly, not all of them need to make it out of the next decade, or should. And the ones that do are going to be the ones that adapt in a variety of ways."

Related: Behind ideological attacks on higher ed, surprising bipartisan reforms are happening

Some are taking at least small steps to balance the books, finding new sources of badly needed revenue.

Agnes Scott College in Georgia started in June to rent out three historic homes it owns. Sweet Briar College in Virginia sells hydroponic lettuce grown in its greenhouses. The University of California, Davis, has launched a line of products from the olives it cultivates for research. The University of Alaska sells permits to harvest firewood from forests it owns. New Mexico State University has licensed its brand for coffee, whiskey and tequila; Mississippi State University for cigars; and the University of Nevada, Reno, for beef jerky.

The Nwaokolos, who are producing the virtual-reality tours of Trinity Christian, see potential for a business doing that more widely as colleges continue to close. "It's possible that other people will want this as well," Ashley Nwaokolo said.

They've already built a platform for it, called Perduras - Spanish for "you endure."

"There's so much life that happens at college," she said. "It's a crossroads of maturity. You have a community around you going through similar experiences. That creates, most of the time, good memories and attachments to that college."

With digital re-creations, Ashley Nwaokolo said, "people can have some history to go back to."

After all, she said, "What do you do for a homecoming when there's no place to come home to?"

Contact writer Jon Marcus at 212-678-7556, jmarcus@hechingerreport.org or jpm.82 on Signal.

This story about college closures was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter. Listen to our higher education podcast.

The post Threats of more closings have colleges and students worrying about how to save themselves appeared first on The Hechinger Report.

The Hechinger Report

This story was originally published July 4, 2026 at 10:00 PM.