By The Associated Press Tue, Nov. 18 2008 05:37 PM EST For 15 years, Cascade College in Portland, Ore., struggled to find the fuels that any college needs: students to pay tuition, and donors to help build an endowment. Then came the global economic meltdown, and suddenly that struggle became an impossibility. Late last month, the small Christian college with just 280 students and $4 million in debt announced it would have to shut down at the end of the current academic year.
In addition to Cascade, another Christian institution, Taylor University, announced last month it would close the undergraduate program at a branch campus in Fort Wayne, Ind.,
Pillsbury Baptist Bible College in Owatonna, Minn. announced plans to close.
Four colleges closed this year, while others merged to survive.
The financial crisis is "clearly very serious," said Paul Corts, president of the Council for Christian Colleges & Universities. "I think people are sensing that this is not short-term. It's something that's going to take a couple of years to play out."
The collapse of Wall Street firms is contributing to the problem. Simmons College in Boston was placed on a watch list for a ratings downgrade because of an estimated $10 million exposure in a complex interest rate swap deal with now-bankrupt Lehman Brothers. While 76 institutions had endowments over $1 billion last year, according to NACUBO figures, about one-third had less than $50 million - even before the downturn.
But others are more fragile, especially those with low graduation rates. Banks are tightening up credit standards, and increasingly denying students at schools where students are too likely to drop out. The Journal of Blacks in Higher Education has reported that there are 23 historically black colleges where more than two-thirds of entering black students fail to earn a diploma.
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