Others have been breaching the financial terms of their bond contracts. Bethune-Cookman University, a historically-black college in Florida, is negotiating with bondholders to avoid having to repay $16 million of debt early because of troubles tied to a costly dormitory project.

Such technical defaults can be remedied. Azusa Pacific University, a Christian college in California that has seen its credit rating slashed into junk, in 2018 reported that the difference between its revenue and its debt payments narrowed to a level below what it had agreed when it issued bonds. But Ross Allen, chief financial officer for the 10,000 student school, said it has instituted monthly budgeting practices and is using more conservative assumptions to constrain costs.

“This organization has turned around so quickly,” Allen said.

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The trouble has come slowly over the past decade. Between 2010 and 2017, not-for-profit private colleges saw enrollment grow by about 164,000 students, compared with a 440,000 increase during the previous decade, according to U.S. Department of Education statistics. At the same time, the steady increase in student debt has driven a push by Democratic presidential contenders Elizabeth Warren and Bernie Sanders to make public colleges free, a step that would drastically reduce the draw of many private schools.

For those that can’t compete, mergers may be the only option short of shutting down. Yet they can be difficult to execute. After Mount Ida College in Massachusetts agreed to sell itself to Lasell College, for example, the deal was abandoned after bondholders reportedly balked at the initial terms It closed instead.

Marlboro College in Vermont may have better luck. Last month, it agreed to be sold to Emerson College in Boston, which will take over Marlboro’s $30 million endowment and real estate worth more than $10 million after the current school year. President Kevin Quigley said it was easier to negotiate a merger because it has an endowment that’s much larger than the $2 million loan it has with the U.S. Department of Agriculture.

“We just realized that we couldn’t make it on our own,” Quigley said.

It’s a lesson that shouldn’t be lost on others. Some colleges aren’t developing plans for attracting new students until it’s too late, said D’Angelo, the restructuring expert. “It should be obvious that you need to make some changes, and yet people are paralyzed,” he said.

This article was provided by Bloomberg News.

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