By Michael McDonald, Bloomberg Business Week
Soaring student debt, competition from online programs, and poor job prospects for graduates are shrinking schools’ applicant pools. The number of private four-year colleges that closed or were acquired doubled to about 10 annually in the four years through 2011, from about five a year before 2008, according to a Vanderbilt University study. All of the schools that failed in recent years had fewer than 1,000 students, and most had endowments of about $1 million. Harvard Business School professor Clayton Christensen has predicted that as many as half of the more than 4,000 universities and colleges in the U.S. may fail in the next 15 years, driven out of business in large part by the growing acceptance of online learning. “I’m not sure a lot of these institutions have the cushion to experiment with how to stay afloat,” says Michelle Weise, a senior research fellow at the Clayton Christensen Institute for Disruptive Innovation, a think tank the Harvard professor helped establish in San Mateo, Calif.
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