Future of Private Colleges

Archive Report

Money Crunch on Nation's Campuses

Cautious Optimism That the Worst Has Passed

In times of national economic stress, private colleges and universities are particularly vulnerable to financial difficulty. When the stock market declines, so does endowment value. Grants and donations fall off, and private schools must compete with public institutions that offer similar services at lower cost.

When the prosperous 1960s ended and a period of economic decline set in, many observers predicted the end of private colleges and universities. However, a report last fall by the Association of American Colleges indicated that the health of private higher education was not as bad as had been imagined. Later evidence compiled by the association suggests that this premise continues to hold true today. The report, directed by economist ...

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