Bethany University — Part of a shakeout? Or a one-off?

Better times

This just caught my attention in light of what I heard last week.

So is the closure of Bethany College in Scotts Valley, California, an example of the prediction that Moody’s John C. Nelson made at last week’s Summer Seminar that there’s a shakeout in the higher education sector coming?

Or is it one of the handful that naturally happen each year?

Just a thought. (Bethany isn’t exactly nonselective, and the Santa Cruz/Scotts Valley area isn’t what I’d call demographically challenged, but it’s not San Francisco, either.)

From my notes of Nelson’s analysis:

4) A shakeout is coming. “I’m not saying I’m in the camp of people saying there’s a massive higher-education bubble,” Nelson said. But in the next 5-10 years, Nelson said, as many as 20 colleges a year could go under. (Up till now, only a handful go under every year.) Over a 10-year period, he said, that could account for 5-10 percent of colleges.

The most vulnerable institutions are:

  • Small nonprofit, nonselective private colleges with fewer than 1,000 full-time equivalent students — a measure that applies to 40 percent of the sector — that have little diversity in programming (and thus can’t justify their tuition), little or no endowment (and so are dependent on tuition), and which are in a competitive market but located away from major metro centers in demographically weak areas. Religious colleges, among others, fall into that category.