University of the Arts in Philadelphia just shut down as institutions take on debt to lure new students
Debt-or-Die
Smaller US colleges facing rising costs are opting to merge or shut down entirely while university debt sales are rising as schools vie for an increasingly tinier pool of students.
Last week, University of the Arts in Philadelphia abruptly announced that it would close on June 7. The school has around $50 million of outstanding municipal bond debt, whose rating was slashed four notches to C by Fitch this week.
That’s the latest in a string of college casualties, a consequence of universities across the country contending with shrinking demand partly due to demographics — birth rates began falling in the aftermath of the financial crisis, and students born then are now approaching their college years.
Bloomberg Newsletter
By Aashna Shah
June 8, 2024